New York City has long grappled with being overly reliant on Wall Street for the strength of its economy — and its tax base.
This was not always the case; in the post-World War II-era of the 1950s and ’60s, New York remained the nation’s major port city and was a major manufacturing hub, especially for small-to-midsize manufacturers in a variety of industries.
But corruption at the port and the rise of container ships shifted shipping to other parts of the country, and the long-term cost and tax trends shifted manufacturing out of the city, if not out of the country.
Being reliant on the financial sector for jobs has several risks: First, the high cost of living in New York City has led financial firms to move many back-office jobs to cities with a lower cost of living. Those kind of jobs also are increasingly being automated. There also is the possibility that the Wall Street financial sector would constitute a smaller percentage of our economy in the years to come, for example, in an Elizabeth Warren presidential administration.
A Jan. 5 New York Times article describes how New York City may avoid the fate described above by sheer mass of talent. “Tech companies are choosing New York to tap into its deep and skilled talent pool and to attract employees who prefer the city’s diverse economy over technology-dominated hubs on the West Coast,” said the article by reporter Matthew Haag.
Facebook, Amazon, Google and Apple are expected to have more than 20,000 workers there by 2022, the majority software engineers of some sort.
The article continued: “Cities across the United States and around the world have long vied to establish themselves as worthy rivals to Silicon Valley. New York City is certainly not anywhere close to overtaking the Bay Area as the nation’s tech leader, but it is increasingly competing for tech companies and talent.”
What are the lessons for Minnesota?
On the positive side, we are not overly reliant on any single sector of the economy and have a good balance across the board.
But efforts to “play above our weight class” in the software world continue to be a challenge. The need remains for additional graduate programs in advanced software (a positive example being the new Minnesota State University, Mankato masters in data science).
What else can we do to avoid being “flyover country” for advanced software? We’ll discuss in future columns.
Isaac Cheifetz is an executive recruiter and strategic résumé consultant based in the Twin Cities. His website is catalytic1.com.