Mayor Bloomberg Launches Innovation Index to Measure New York City's Economic Transformation
Mayor Michael R. Bloomberg today launched New York City’s Innovation Index, the first composite indicator that tracks overall innovation activity in New York City over time. The Index, developed and administered by the New York City Economic Development Corporation, provides a detailed analysis of the drivers of innovation in the City and how they are faring. The data will be updated every year and will be used to measure the scale and pace of the City’s economic transformation, as well as inform policies and shape a regulatory environment that promotes innovation in New York City. Overall, innovation-related activity increased by 12 percent between 2003 and 2009, a trend that preliminary data suggest reached 14 percent by the end of 2010
“One of our Administration’s most important economic development goals is to promote entrepreneurship and innovation and grow New York City’s high-tech sector, and we want to track its drivers,” said Mayor Bloomberg. “Innovation is a tough thing to measure, but when taken together through the Innovation Index, factors like job growth, research and development funding, and venture capital, provide a gauge of the City’s success in generating new ideas, new companies and new jobs. Accelerating the trend of innovation in New York is critical to the City’s economic growth and diversification, particularly given the challenges of competing in the global economy.”
By analyzing the City’s innovation inputs – research and development (R&D) spending, finance, and human capital – and innovation outputs, or the growth of intellectual property, production in high-tech sectors, and entrepreneurship, the Innovation Index uncovered key trends in the City’s innovation economy:
- The high-tech sectors’ share of the Gross City Product (GCP) increased by almost 25% between 2003 and 2009. In 2009, GCP per worker in the City’s high-tech sectors was more than $200,000, among the highest level of any sector.
- Venture capital funding in the New York metro area totaled $1.9 billion in 2010, with firms in the City accounting for 64 percent of this activity. Both the number and value of VC deals increased at a significantly higher rate than in the rest of the nation between 2003 and 2010.
- New York City’s small businesses received a total of $30 million in federal grant dollars for innovation and research in 2009. The value of grants to the City’s firms more than doubled between 2003 and 2009.
- The City’s universities invested $1.8 billion in R&D in 2009. R&D spending at these institutions increased 13 percent since 2003 and accounted for approximately 3.5 percent of all academic R&D spending nationally.
- In 2009, the City’s universities were home to nearly 27,000 graduate and post-doctorate students in the science and engineering disciplines. This represented a 3.9 percent share of all such students in the U.S. and is up from 3.5 percent in 2003, demonstrating the City’s learning and research institutions’ growing influence in these fields.
- With nearly 179,000 people employed in science and engineering occupations in 2009, the City’s workforce is becoming more concentrated in these jobs. The number of workers increased by 9 percent between 2003 and 2009, while their share of total private employment grew by 4 percent.
- There were approximately 1,100 patents awarded to New York City inventors in 2009, an increase of 23 percent from 2003.
“The Bloomberg Administration is taking concrete steps to further New York City’s position as the 21st Century City of innovation,’ and the Innovation Index will be a useful tool as we move forward,” said Deputy Mayor for Economic Development Robert K. Steel.
“Because we believe that innovation is the key to future economic growth, measuring the level of innovation occurring in New York City serves as a critical barometer of economic opportunity,” said New York City Economic Development Corporation President Seth W. Pinsky. “Understanding this data will help us develop more effective policies that will accelerate the trends and strengthen our position in an increasingly competitive world.”
Overall, the Index documents that barriers to business creation for high-tech and innovative firms are lower today than they were a few years ago, and they continue to decrease as more entrepreneurs are attracted to the City. The results of the Index show that, within the broader City economy, entrepreneurs are establishing new businesses, and more startups are securing venture capital and federal funding. This development is facilitated by the concentration of highly skilled talent across numerous industries, providing an ideal environment to exchange ideas. The City’s universities continue to be the engine driving research and knowledge creation, helping to develop a highly-skilled workforce. Meanwhile, more patents are awarded to the City’s inventors each year.
While inputs like R&D and venture capital funding have increased sharply since 2003, these investments in innovation have uncertain returns that do not necessarily or immediately translate into innovation outputs. Several years may be needed for ideas to be patented or commercialized. But with inputs continuing to rise, there is reason to be optimistic about the City’s future performance.
To access the full report and its findings, visit www.nycedc.com/innovation.
The Innovation Index is part of the Bloomberg Administration’s efforts to encourage entrepreneurship within a variety of economic sectors. With a network of eight incubators around the City, the Administration is providing low-cost office space, as well as training and networking opportunities, to hundreds of start-ups and small businesses. In addition, in 2010, the City launched the New York City Entrepreneurial Fund, the first City-sponsored seed and early-stage investment fund located outside of Silicon Valley. In partnership with FirstMark Capital, the fund will make up to $22 million available to New York City-based technology startups. This month, the Mayor announced the winners of the second annual NYC BigApps competition and a strategic partnership with BMW, which is launching a $100 million venture capital fund in New York City as well as a small business incubator. And as part of larger efforts to grow the technology sector in the City, the Administration recently received 18 responses to a Request for Expressions of Interest that it issued to institutions seeking to build or expand an applied sciences research facility within the five boroughs.
New York City Economic Development Corporation is the City's primary vehicle for promoting economic growth in each of the five boroughs. NYCEDC's mission is to stimulate growth through expansion and redevelopment programs that encourage investment, generate prosperity and strengthen the City's competitive position. NYCEDC serves as an advocate to the business community by building relationships with companies that allow them to take advantage of New York City's many opportunities. Find us on Facebook or follow us on Twitter, or visit our blog to learn more about NYCEDC projects and initiatives.