New York has recaptured most of the jobs lost there during the recession. Mayor Michael Bloomberg has done a great job at attracting technology tenants to the Big Apple. For example, Google has a million square foot facility in the Chelsea area of New York. That space trumps its 100,000 square foot facility in the Venice area of Los Angeles. The music sharing service Spotify, and Livestream, the market leader for live event coverage, are also located in New York. There is a website, called Made in NY Digital Map, that points out digital and tech tenants located throughout the city.
Not only is New York attracting tech and digital tenants, but they are also starting to court a substantial piece of L.A.’s film post-production business with a recent tax credit. New York Governor Andrew Cuomo recently enacted this law, which increases the previous 10% credit to a whopping 30% on post-production costs. If a company wants to earn a slightly larger credit, they can venture to upstate New York and get a 35% credit. New York is aggressively going after L.A.’s post production business, which has a heavy concentration on the Westside of Los Angeles. This is the first type of post-production credit the industry has seen. Time will tell if companies will move to the East Coast to take advantage of it.
New York has been having an astounding year in TV production, mainly because of its film tax credit program. They are setting aside more than $400 million a year in order to attract film and TV productions. Compared to the $100 million that California spends, one has to wonder why they aren’t putting up much of a fight against New York.
The Los Angeles Times goes more in-depth about this subject in their recent article.
We might be so bold as to say that Los Angeles surpassing Silicon Valley in the startup race is not going to happen. However, this recent article in Forbes does not actually discuss the placement of Los Angeles or Silicon Valley in the startup race. Instead, it speaks of the resistance one marketing tech worker had in moving to Los Angeles from San Francisco. Despite the misconceptions that some Silicon Valley residents may have about the tech and startup scene in Southern California, this article points out that there is a lot of promise in Los Angeles. A good argument that is made in the article is if L.A. wants to gain a traction on a higher spot in the tech startup race, there needs to be more tech talent that is interested in entrepreneurship.
All differences aside, we have a lot of tech in Los Angeles. If aerospace technology were to be included, we may blow away Silicon Valley. During the dotcom boom, Los Angeles had the number four spot in venture capital funding behind Silicon Valley, Boston, and New York according to the National Venture Capital Association. Guess What? We still have the number four spot. As the technology industry comes back as a whole, Los Angeles tech is coming back as well. We are rebuilding the infrastructure we had during the dotcom boom. Although some valuations may appear bubbly–venture funding does not even come close to rivaling the dot com boom. Venture funding reached $99 billion in 2000 versus $28 billion in 2011.
Los Angeles will not catch up to the Bay area anytime soon in technology and startups, and conversely, the Bay Area will not catch up to Los Angeles in the movie and media realm. Both have too much history, infrastructure, institutions, and alumni in each of their respective areas of domination. Los Angeles can excel in the niche tech areas of content convergence, such as Hulu and Demand Media. LA can also do extremely well in advertising and marketing tech (Adly), and ecommerce (Shopzilla, Fandango).