New York was hit hard by the 2008 economic crisis. Yet, when the Wall Street investment bank Lehman Brothers failed and other major financial institutions teetered on the brink of collapse, the mayoral administration of Michael R. Bloomberg had no plan. The billionaire mayor, one of the richest people in the world, had made his fortune from an electronic device, the Bloomberg terminal, that brought financial data in real time to stock traders’ desks. But, until the financial crisis, he had championed the big banks, advocating for less government regulation. The Bloomberg administration did support New York’s media industry, especially TV and film production, but showed no special rapport with either the tech industry or its discourse of “Innovation and Entrepreneurship” until the Great Recession. The mayor then decided that the financial industry that had long dominated New York’s economy had to step aside; new industries, from green manufacturing to software development, must rise (Zukin 2020; also see Indergaard 2019).
To confront the crisis, the New York City Economic Development Corporation (NYCEDC), the nonprofit public corporation that is, in effect, the city’s economic development agency, created a Center for Economic Transformation and charged it with shaping the city’s first-ever strategic plan. NYCEDC recruited a former management consultant who had worked at McKinsey and the World Economic Forum to run the center. He organized a months-long series of high-level discussions in industry sectors other than finance and hired outside consultants to analyze their needs. According to the emerging consensus, the city’s “legacy” industries—chiefly media, fashion, and education—needed to develop their use of digital technology. New York should also expand its supply of computer engineers. The city’s private and public universities must become more entrepreneurial in commercializing the ideas—the intellectual property—of their faculty and students; the startups that would emerge from their collaborations with corporations would create jobs. Although successful New York-based startups in e-commerce (like Etsy), media (Buzzfeed, Vice), and social media (Foursquare) garnered attention, the city in fact offered multiple markets for potential B2B (business-to-business) tech firms.
The New York city government did not officially designate any innovation districts. Yet, by 2010, four types of innovation districts had emerged de facto if not de jure. The first type, that I like to call a naturally occurring innovation district, had been seeded during the dot-com boom of the 1990s; it included Silicon Alley, running down Broadway along Manhattan’s commercial spine, and DUMBO, a dilapidated, partly abandoned industrial area on the north Brooklyn waterfront. Some Internet-based businesses in both areas managed to survive the one-two punch of the dot-com bust in 2000 and the economic recession that followed 9/11, the date when terrorists attacked the World Trade Center, in 2001. In the aftermath of these events, tech workers and founders in Silicon Alley generated a new “community,” as they call it, from informal meetups and networks. At the same time, a small number of venture capitalists who had also lived through the dot-com bust gradually began to raise new funds to invest in a new generation of tech startups. New York still had massive wealth; VCs and the city government began to channel it, in different ways, into tech production.
Some of the capital investment funded new workspaces for tech startups, and some of those startups clustered in Silicon Alley and DUMBO. As both signs of life after 9/11 and rent-paying commercial tenants, they were welcomed by building owners, real estate developers, and the local public-private business associations called business improvement districts, in which real estate interests are well represented. The two tech clusters also benefited from their continued association with the “creative class,” for their old brick and cast iron buildings embodied an industrial chic aesthetic, they had new green space in nearby public parks, and they offered relatively cheap commercial rents. It helped New York that Google opened a large office in West Chelsea, near the northern end of Silicon Alley, in 2006, and gradually expanded by buying five buildings there. As the New York Times (Bagli 2018) reports, “Google became a siren for other, smaller tech firms to move to the neighborhood, which was beginning to shrug off its industrial roots.” At the same time, computer-savvy artists, writers, and app developers moved to Brooklyn and set up media offices, digital branding agencies, graphic design firms, and workshops near where they lived. This helped to grow the tech and media cluster that had first appeared in DUMBO in the 1990s. By 2015, this cluster extended for ten miles along the East River waterfront from Astoria, in Queens, to Brooklyn’s Sunset Park.
The second type of de facto innovation district, a greenfield development, is represented by a single site: the newly built campus of Cornell Tech on Roosevelt Island, in the middle of the East River between Manhattan and Queens. When the post-2008 crisis discussions among business elites pointed to a need for more computer engineers, the Bloomberg administration decided to establish a postgraduate engineering school that would produce them. Following Stanford’s example, the school would both connect students and faculty to local companies and encourage them to set up their own startups. NYCEDC organized a worldwide competition for a university to develop and manage the engineering school; after a year of suspense, they awarded the contract to a partnership of Cornell University and the Israel Institute of Technology-Technion. Because Cornell’s main campus was located upstate, the university already had New York State accreditation that would enable the new school to open quickly. Cornell also maintained a highly rated medical school and hospital on Manhattan’s Upper East Side, suggesting that the university could quickly create synergy with startups in healthtech and biotech. For its part, Technion had an enviable track record for generating startups in its home city, Tel Aviv.
New York City promised to contribute $300 million in city-owned land and infrastructure and give Cornell Tech $100 million in cash. Through his private philanthropy, Mayor Bloomberg donated another $100 million, enough to fund and name a building. Moreover, the school received a $350 million donation from a Cornell graduate who had become wealthy from his ownership of duty-free shops. Within a year or two, Cornell Tech also received a $133 million donation from the chairman of Qualcomm, a big semiconductor and wireless technology company based in San Diego, and his wife, both Cornell graduates. “We are delighted to partner with Cornell and the Technion on this unique educational initiative,” the couple’s announcement said, using the right buzzwords. “We believe strongly in the mission of this international collaboration to drive innovation and to foster economic development” (Kaminer 2013).
The third type of de facto innovation district prioritizes modern industrial development through computer-aided manufacturing, and is mainly based in three large, city-owned, industrial complexes on the East River in Brooklyn: the Brooklyn Navy Yard, Brooklyn Army Terminal, and Bush Terminal. This type of innovation district maintains the city government’s social commitment to manufacturing by supporting relatively low rent for factory and workshop tenants, encouraging them to adopt computer-aided production processes, and training manual workers to upgrade their skills. These workers are often first-generation immigrants, but they are voters, too; they represent a large and often vocal base for community organizations and progressive politicians. Candidates for public office ignore their demand to maintain manufacturing jobs at their peril. Municipal ownership gives these three industrial complexes financial leeway to sustain manufacturing tenants even though they pay a much lower rent than offices, hotels, or residential uses.
Within this small group of city-owned properties, the Brooklyn Navy Yard has been able to pursue a uniquely entrepreneurial path by building new facilities for both advanced and artisanal manufacturing, software production, and creative work. The Navy Yard’s three hundred acres are managed by a nonprofit economic development corporation whose contract with the city specifies that the development corporation can use its rent revenues as it sees fit. This autonomy contrasts with other city-owned properties, whose rent revenues go directly into NYCEDC’s coffers. Since the early 2000s, relative financial autonomy has allowed the Brooklyn Navy Yard Development Corporation to “leverage its rent rolls,” in the words of a former CEO whom I interviewed in 2015, in order to raise private investment capital. BNYDC has aggressively pursued private capital, leasing land to real estate developers to build workspaces, including tech offices and coworking spaces, commercial kitchens, and workshops for computer hardware startups, and borrowing significant amounts of money from foreign investors in the form of EB-5 loans, which reward the lenders with visas and green cards for their families. In addition, the Navy Yard has received capital grants from NYCEDC in each of the last three mayoral administrations and smaller grants from New York State’s economic development corporation, the Brooklyn borough president, and other local elected officials.
The Navy Yard has used these funding streams to renovate both infrastructure and buildings, some of which date back to the early 1900s. In partnership with private real estate developers, BNYDC has overseen the development of an extensive studio for film and TV production, the building of a well-equipped accelerator for both hardware and software startups, the transformation of a windowless, concrete warehouse into a glass-fronted building with food processing facilities and a ground-level food hall where the on-site food companies sell their products—for takeout only during the covid-19 pandemic. Partnering with several local universities and NYCEDC, the Brooklyn Navy Yard also hosts the first city-funded virtual reality and augmented reality lab in the United States. Moreover, BNYDC leased a narrow waterfront site to private real estate developers to erect a glamorous, new building where coworking spaces are managed by WeWork. As the website for this building, Dock 72, proclaims, “The Brooklyn Navy Yard has evolved from the old hub of New York’s shipbuilding industry to the new epicenter of the city’s creative class—A place where technology, design, food, film and modern manufacturing come together to collaborate and innovate.”
Some of the financial arrangements that fund these facilities may well represent overly risky speculation. They take advantage of US tax laws—most recently, opportunity zones created by the Trump administration’s tax law of 2017—as well as the EB-5 visa program for foreign investors who create jobs. Yet, the Brooklyn Navy Yard Development Corporation is distinguished from most city government agencies around the world by their commitment to sustaining manufacturing and career paths to middle-class manufacturing jobs as a socially necessary part of urban innovation (interviews 2016, 2019).
Maintaining a social commitment to manufacturing in a city where real estate developers covet waterfront land for luxury condo construction requires the Navy Yard to use a range of programmatic innovations. First, the lower rents that manufacturing tenants pay are “cross-subsidized,” in real estate lingo, by the higher rents paid by office tenants. Second, the Navy Yard runs an on-site job training program for low-income, less educated neighborhood residents, many of whom live in public housing, veterans, and formerly incarcerated workers. After they complete their training, the development corporation tries to connect the workers to employers at the Navy Yard. They cannot create jobs for them, but they can set up pipelines to employers. With the same kind of pipelines in mind, the development corporation has established on-site apprenticeships for local high school students and a new STEAM (science, technology, engineering, arts, and math) high school for vocational training. Most important, BNYDC uses its partnerships with private-sector real estate developers to build modern factory, workshop, and studio space. By 2030, they plan to build new “vertical factories” with big, unobstructed floors. The vision is that manufacturing tenants will use digital technology designed and fabricated at the Navy Yard.
Although in many ways the Brooklyn Navy Yard constitutes an innovation district on its own, it is also one-third of the Brooklyn Tech Triangle, an imaginary construct that represents the fourth type of innovation district in New York. The “triangle” spans three distinct, adjacent spaces: the Brooklyn Navy Yard, its neighbor DUMBO to the south, and the borough’s nearby historic downtown. It exists as a geographical space, to be sure, and includes 23 million square feet of office space, but the idea of a “tech triangle” was deliberately created as a branding device to direct attention and investment to this area (interviews 2015–2016).
The tech triangle was born in 2011 in the imagination of a former president of the Downtown [Brooklyn] Partnership, the borough’s biggest business improvement district. Newly hired, he had been given a mandate to fill the vacant space in downtown’s old office buildings. He looked out his office window one day, he told me, and thought about the booming demand for workspace both at the nearby Brooklyn Navy Yard and in DUMBO, just a few blocks away. He imagined a tech company that would design digital products at a studio in DUMBO, manufacture them at the Navy Yard, and conduct its corporate affairs from offices downtown. To make this fictional scenario real, he persuaded the president of DUMBO’s business improvement district and the CEO of the Brooklyn Navy Yard Development Corporation to join him to commission a study of the three adjacent areas.
The urban design studio that they hired discovered hundreds of tech companies, with owners and employees who were committed to this part of Brooklyn (WXY Architecture + Urban Design 2013). Many employees lived in Brooklyn and biked or walked to work. Presenting the three distinct areas as a coherent physical and social space, the architects felt, would highlight the area’s strengths: thousands of workers at tech startups, almost 60,000 college students, and a creative vibe that was already Brooklyn’s global brand.
The idea of a Brooklyn Tech Triangle got media buzz and politicians’ support, and, during the next few years, without any official designation by the city or special authority, it assumed a material reality. New York University acquired both a historical engineering school in downtown Brooklyn, practically next door to the Downtown Partnership’s office, and, a few blocks away, the big, empty, former headquarters of the Metropolitan Transportation Authority, which the university renovated into an “urban tech” research center. The Downtown Partnership set up recruiting events and internships to place local college students in tech firms. By 2016, vacant space in downtown Brooklyn’s office buildings began to fill up, and new office construction was begun. In 2017, when NYCEDC submitted a bid to Amazon to build HQ2, the company’s second headquarters, in New York, the Brooklyn Tech Triangle was among the four sites that they offered (NYCEDC 2017). By 2018, this area of Brooklyn had become the second-fastest-growing tech hub in the United States after San Francisco (Bowles et al. 2019).
Since 2010, the expanding geography of these four de facto innovation districts has anchored New York’s tech ecosystem. The “innovation complex” includes flexible coworking spaces, many under the nearly ubiquitous WeWork sign until the company imploded in 2019 before the scrutiny of an impending IPO, as well as less visible but more important production spaces in independent tech and creative offices, tech incubators and accelerators, factories that use computer-aided manufacturing, and the offices of Big Tech companies like Google, Amazon, Facebook, and Apple. The ecosystem also depends on tech “community” organizations that promote startup culture, with its discourse of “Innovation and Entrepreneurship,” and connect tech actors across organizations and fields. These actors are led by a soi-disant community of venture capitalists, successful startup founders, and representatives of Big Tech’s New York offices. It includes entrepreneurial business and engineering students at local universities, including Cornell Tech, Columbia, and NYU, and software engineers, many from overseas. The whole assemblage of the innovation complex—discourses, organizations, and geographical spaces—has urbanized a version of Silicon Valley.
New York represents an early model. Since the late 1960s, its city government had adopted an entrepreneurial orientation in response to economic disinvestment, fiscal stress, and increasing protests and demands related to cutbacks in social welfare spending. Under extreme pressure from the federal government and the big banks, business and political leaders interpreted the situation partly as an image problem, partly as an urgent task of social control, and partly as a stimulus for a drastic change of governance from the Keynesian state to a market-oriented growth coalition exerting influence through a widening range of public-private-nonprofit partnerships (Harvey 1989; Greenberg 2008; Phillips-Fein 2017). This political reorientation reached national and eventually global scale when the policies of social control and fiscal austerity identified with Reaganism and Thatcherism in the 1980s starved cities’ welfare and infrastructure budgets while giving free rein to private capital’s expansion. By the 2010s, the discourse of “Innovation and Entrepreneurship” those leaders had championed was fully identified with the tech industry, and the fictional scenario of fostering economic growth by encouraging tech startups swept through cities in every region of the world.
The innovation complex aims to recreate the city as modern, but it also reshapes it into a dystopian “social factory” (Tronti 1966; Negri 1989) where workspace and worktime spill over from the office and shop floor to hackathons, meetups, and cafés (Zukin and Papadantonakis 2018). Public parks are playgrounds and hangouts for tech “bros” (Adiv 2015; Stehlin 2016); universities teach “startup studios” to inculcate entrepreneurial zeal. The spatiality, then, of innovation districts, embeds these cultural effects in the urban landscape while camouflaging their institutional supports. They help cities to become, as the geographers Sami Moisio and Ugo Rossi (2020, p. 535) say, “state-orchestrated platforms for experimental governance and creative business activity.” But they do this within a complicated urban matrix of political commitments to the city’s social communities and power struggles to control land use.