NYS Office of the Comptroller DiNapoli: NYC’S Tech Sector Boom Partially Offset City's Pandemic Job Losses

 

Number of Tech Jobs Grew By Over 30% in the Last Five Years, Despite Overall Decline in Private Sector Employment City’s Tech Sector Second to Silicon Valley for Venture Capital Investment Jobs in New York City’s technology sector grew over the course of the COVID-19 pandemic, while most other economic sectors suffered job losses, according to a report released today by State Comptroller Thomas P. DiNapoli. The report found that tech sector employment in New York City increased by 33.6% (43,430 jobs) from 2016 to 2021 to reach a record high of 172,570 jobs. The city’s private sector lost 3.3% of jobs during this same period. “My latest report provides further evidence that New York City’s tech sector boom helped prop up the city and state’s economies during the COVID-19 pandemic,” said DiNapoli. “Despite the pandemic’s impact on the overall economy, the sector grew, and the number of companies and jobs has soared. For the tech sector’s continued success, the city and state should focus on increasing workforce diversity and creating educational pathways into the sector.” New York state’s tech sector employment totaled 321,280 jobs in 2021. Growth in the state that year was fueled by New York City, where 43,430 tech jobs were added. In the rest of the state, the sector lost 3,210 jobs. This loss is mainly attributable to the composition of sector jobs outside of New York City, which are primarily in manufacturing and telecommunications, subsectors which have been declining over the past decade. Not only did tech sector jobs in New York City see substantial growth between 2016 and 2021, but the number of businesses also grew. Tech sector businesses accounted for over 20% of the city’s total private firms added during these years. Over the past five years, the number of tech businesses in the city increased by 34.4% (2,650 firms), reaching 10,340 firms in 2021. Most of these firms consisted of fewer than 10 employees and contributed to the citywide growth in microbusinesses during the pandemic.  How the Pandemic Boosted the Tech Sector While other industries struggled, New York City’s tech sector expanded during the COVID pandemic as people became more reliant on technology during the lockdowns and the shift to working from home. As total private sector employment declined by 12.6% (494,810 jobs) in 2020, the tech sector grew by 9.4% (14,340 jobs), the largest growth since 2012. Amid the pandemic, tech jobs also grew in other “nontech” businesses (such as in retail trade) that employ tech workers like software developers or computer programmers. When combined with the jobs in nontech sectors, the city had a total of 281,100 tech jobs in 2021, 58% higher than in 2011. About the Tech Sector Where Are the Jobs: Nearly 90% (150,400) of the tech sector jobs in the city were located in Manhattan, followed by 7.6% (13,160 jobs) in Brooklyn, where the borough saw tech employment increase by 42.6% from 2016 to 2021. Tech industry jobs increased slightly in Queens and declined in the Bronx and Staten Island. Subsectors: Computer systems design is the largest subsector of tech in New York City, accounting for almost 40% of tech sector employment in 2021. The fastest growing tech subsector in the past five years was software publishers, including app developers, whose employment more than quadrupled. Who Works in the Sector: With an average age of 38, New York City’s tech sector has one of the youngest workforces when compared to the average of 41 years in the rest of the private sector. Workers in the tech sector are also overwhelmingly college educated. However, the sector is less diverse than the rest of the city’s private sector workforce. In 2020, over half (54%) of tech workers identified as White or Caucasian, much higher than the share of 40% among all other workers. Less than 29% of tech workers were women, a much lower share than the rest of the overall workforce share of 47%. High Pay: In 2021, the average salary in tech reached $228,620, almost double the average ($117,810) of the total private sector in New York City. The average salary in tech had the second largest growth in the past five years out of all sectors with over 2,000 employees. Impact on Real Estate: By 2020, technology, advertising, media and information business firms accounted for one-quarter of total real estate leasing in the city, a rate that more than doubled since 1990. Fears of an economic recession have slowed tech leasing in the first eight months of 2022. Tech startups in New York City have benefited from close proximity and relatively easy access to the city’s large pool of investors and venture capital firms. Start-up companies in the New York metropolitan area garnered more than 16% of the nation’s total venture capital investment in 2021, the largest share behind the San Francisco Bay Area. DiNapoli, as the trustee of the state’s pension fund, administers the In-State Private Equity Investment Program, which invested more than $296 million in 170 tech-related New York City companies between 2016 and 2021. While the pandemic provided a significant boost to the tech sector, rapid growth experienced in 2020 began to slow nationwide and locally in 2021, a trend that has continued in 2022. As firms navigate challenges amid a looming recession, the city must continue to monitor trends in tech employment to understand the future direction of the sector and its occupations. This approach should continue to inform the city’s investments in providing the institutional infrastructure and educational opportunities necessary to retain and grow the sector in the future. Report The Technology Sector in New York City