We all know that Silicon Valley (in Northern California) is home to many of the world’s largest technology corporations as well as thousands of small startups. But a new area with a concentration of internet and new media companies has been born in Manhattan. Silicon Alley originally referred to the cluster of companies extending from the Flatiron District down to SoHo and along TriBeCa, along Broadway. But with the expansion of the industry in New York, Silicon Alley is not a reference to the dot-come industry in New York City as a whole.
Although the dot-com boom of Silicon Alley can be traced back to the mid-1990s, we only have recently begun to see this industry’s effect on the real estate market.Union Square has been the central hub of Silicon Alley, although Brooklyn has its own tech hub in its naval yards. Lower Manhattan is now getting involved in the digital arena, boasting approximately 600 tech firms south of Canal Street where the financial sector has historically dominated. The Association for a Better New York and a member of the Downtown Alliance has stated that “It used to be … like 60% FIRE — finance, insurance, real estate — and everything else. Now, it’s the other way around.” The traditional corporate demographic of downtown Manhattan has clearly changed as a result of this technological revolution in New York.
Mayor Bloomberg’s office has also gotten involved by instituting the Made in New York program. The mayor’s office has created a website, which lists a plethora of companies on an interactive digital map, allowing users to find local startups that are currently hiring for more than 3,000 jobs.Bloomberg said:
Growing our local tech industry is an important part of our economic development strategy to bring new businesses to our city and more jobs opportunities to New Yorkers. The city offers the ideal location for talented people with ground-breaking ideas to start their companies, and the ‘We Are Made in NY’ initiative is the latest step we’re taking to help them grow here.
To show its appreciation for this up-and-coming industry in New York City, the city has been incentivizing digital and creative companies migrate by providing four companies $250,000 each to move into lower Manhattan as part of Help + Expand in Lower Manhattan competition.
It remains to be seen whether this expansion will continue and for how long. Interestingly, we shall see in the future whether this expansion grows northward above Union Square or maybe even to other boroughs such as Queens.