New York City’s growing tech scene was poised to receive a once-in-a-lifetime boost: tens of thousands of high-paying jobs.
Now, with Amazon having announced its cancellation of plans to build a sizable office in the Long Island City neighborhood of Queens, the city’s tech community — which has enjoyed years of growth and remains optimistic — is left to wonder what might have been.
"The cost of this rejection will be felt more in 10 years than tomorrow," wrote Fred Wilson, a partner at New York-based VC firm Union Square Ventures and among the city’s most influential tech investors, in an email, "and it is the next generations of New Yorkers who are the biggest losers today."
The issues raised by local activists and politicians about Amazon’s development mirror a growing national discussion about the impact of big tech companies on issues including inequality, gentrification and housing — raising some fears that New York City could miss out on jobs and economic development from big tech companies.
“While we will continue to see this really good and important and incremental growth, I worry we’ll see fewer of the big bets,” said Julie Samuels, executive director of Tech:NYC, a nonprofit that advocates for the city’s tech industry.
Amazon’s office would have been the crowning achievement for a city that experienced a renaissance during the banking-fueled upswing of the 1980s but had also developed a bit of an inferiority complex that the rise of West Coast tech giants meant New York would never realize its future as “Silicon Alley,” a term first used in the 1990s. How to build New York’s tech and startup scene was the topic of no shortage of blog posts and debates, as well as city-based initiatives.
Those efforts have been rewarded in recent years with both an increase in venture capital funding for startups, as well as investments from tech companies that have opened offices in the city, including Google, Facebook, Spotify. The NYC Economic Development Corporation found in 2018 that the city was home to more than 7,000 startups with an economic value of $71 billion.
Data from CB Insights, a research firm that tracks venture capital investment, and PricewaterhouseCoopers found that VC funding for New York startups had more than tripled in the past six years to hit $13 billion in 2018.
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And while the city’s startup scene has generated a growing handful of successful companies that have gone public or been acquired, Amazon’s departure is still disheartening.
"Squarespace has always been proud to call New York City home, and that history will forever be a part of our DNA,” said Anthony Casalena, founder and chief executive of Squarespace, a company that offers web services and is among the city’s most successful tech companies. “While our thriving technology community with diverse talent is only continuing to grow and will remain very strong, Amazon’s decision is a missed opportunity for our great city."
But there is some feeling among tech critics that the lack of a native tech giant has meant the city dodged a bullet.
Tech’s growth in New York and other major U.S. cities — most notably San Francisco, Seattle, Austin and Los Angeles — has been met with growing concern about the impact of tech on society and the impact these companies have on the cities they inhabit.
The concentration of wealth that has accompanied the success of tech companies has helped put societal issues that are present in New York, such as homelessness, gentrification and inequality, at the forefront of liberal politics. Critics say tech companies have turned a blind eye to their impact on these issues, with those concerns central to Amazon’s ill-fated New York City affair.
Kshama Sawant, a councilmember from Seattle, where Amazon is based, commended New York for fending off the company.
“Huge congrats to working people's movement in NYC for showing that building grassroots fightback can win!” Sawant tweeted. “Shame on Seattle's politicians for repealing the small Amazon tax to fund affordable housing. NYC's victory reminds us, we need to keep fighting here!”
Those critiques have resonated with some influential voices in the New York tech community who have expressed disappointment with Amazon’s exit but want to figure out a way forward to maintain the city’s upward trajectory in tech.
Anil Dash, a 20-year veteran of New York City’s tech scene and CEO of Glitch, a collaborative coding website, said that Amazon had fundamentally misunderstood the city’s tech culture, which he described as connected to its community in ways that tech giants on the West Coast are not.
He said those connections have been keys to the city’s tech success.
Amazon touting “jobs” (has anyone fact-checked where this 25k number even came from? How many were promised to be local hires?)
...but they refused to even consider hiring union when we insisted labor be part of the conversation.
“I think it’s happened because most of us that are lucky enough to get to found these companies, run these companies, engage with the community,” Dash said.
Dash said Google was an example of a big tech company that had assimilated into the city. The search giant announced in December a $1 billion investment in New York City.
He also noted that Rep. Alexandria Ocasio-Cortez, D-N.Y., one of the most notable critics of the Amazon deal, had tweeted that Google came to New York City “just fine,” indicating that the rejection of Amazon was not about a problem with tech companies.
“For her to be affirmatively talking about Google is not the narrative that people are trying to construct around this conversation,” Dash said.
Lawrence White, a professor of economics at New York University, cautioned against seeing Amazon’s departure as a sign of things to come. He compared the Amazon situation to New York’s rejection of another retail giant — Walmart.
While activists helped push the city to reject the retailer, that sentiment did not spill over into a rejection of similar stores such as Home Depot and Target. It also does not mean Amazon will be entirely absent from the city. It currently has 5,000 employees in the greater New York City area.
“The activists stopped Walmart from coming in,” White said. “It was a symbolic event, but it did not stop the advancement of other big box operations.”
Jason Abbruzzese is the senior editor for technology news at NBC News Digital.