Bloomberg: New York Chases Silicon Valley With Roosevelt Island Site

This Bloomberg News tech column looks at New York’s effort to spark tech growth in the city, particularly through graduate tech and applied sciences campus headed by Cornell and the Technion- Israel Institute for Technology. 


Photo by Saul Loeb/AFP via Getty Images

By Kathleen Chaykowski 

New York City’s ambitions to challenge Silicon Valley as a technology center are taking root on a narrow isle in the East River, where Cornell University is building a $2 billion campus and startup incubator.

Manhattan’s Roosevelt Island will be home to a new engineering and applied science graduate school, part of a bet that the next Apple Inc. (AAPL) could be born in the Big Apple. West Coast companies are already helping lay the groundwork, with Google Inc. (GOOG) donating office space to the project and Facebook Inc. (FB) hosting a “hackathon” to build buzz with all-night programming binges.

New York has an uphill fight in trying to draw startups and engineers away from the San Francisco Bay area — home to Apple, Google, Facebook and Twitter Inc. Silicon Valley attracted almost six times more venture-capital investment dollars than New York in the second quarter, according to a PricewaterhouseCoopers LLP study. Still, the city has an edge in giving entrepreneurs access to the worlds of finance, fashion, advertising and retail, making New York fertile ground for startups that fill the needs of those industries.

“There is more interest in New York as a potential tech center than ever before,” said Greg Pass, a former Twitter executivewho now works for the new Cornell campus. “As the world becomes more technological, the role of engineers will be become more substantial.”

Winning Bid

The graduate school, known as CornellNYC tech, is part of a broader push by Mayor Michael Bloomberg to make the city a global technology leader. In December, Cornell and theTechnion- Israel Institute for Technology beat out six competing bids to build the campus, including one fromStanford University. A $350 million donation from Cornell graduate Charles Feeney helped seal the university’s victory.

The city is donating space on Roosevelt Island and as much as $100 million for infrastructure improvements. The mayor is founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.

The project is meant to bolster job creation in the city and generate 600 spinoff companies and $23 billion in economic activity over the next three decades. Until the Roosevelt Island campus opens in 2017, it will run in Manhattan’s Chelsea neighborhood, in space leased rent-free from Google.

Facebook, Google

The campus will offer pilot courses this year and begin conducting master’s classes in the latter part of 2013. Key to the effort is enlisting technology companies, which will give students a glimpse into their operations, Dan Huttenlocher,dean of the campus, said in an interview. Facebook, Google,EBay Inc. (EBAY) Inc. (AMZN)Groupon Inc. (GRPN)Juniper Networks Inc. (JNPR)Advanced Micro Devices Inc. (AMD) and Twitter said they intend to collaborate with the campus.

“You can almost name a company, and they’re very excited,” Huttenlocher said.

While New York trails the Valley in startup funding, it’s closing the gap. The number of venture deals in the city grew by almost a third between 2007 to 2011, while falling 10 percent in Silicon Valley, according to the Center for an Urban Future. The city now has more than 1,000 technology startups, and the number of so-called tech accelerators has grown from zero to at least 12 since 2009, making it easier for budding companies to find investors and form business models.

Google, Facebook, Twitter, Microsoft, EBay, Yelp Inc. (YELP) and LinkedIn Corp. (LNKD)have set up offices in the city. From 2005 to 2010, New York’s tech workforce grew 10 times faster than total city employment, according to the Center for an Urban Future.

Doubling Students

The Cornell campus aims to almost double the number of engineering graduate students in “leading programs” in the city, according to the New York City Economic Development Corp. The graduate engineering or applied science schools at Columbia UniversityCity Universityin New York and the Polytechnic Institute of New York University had a total of about 2,800 students as of 2011, the mayor’s office said.

“It inevitably develops the likelihood that we will have developed better tech talent in the city,” said Alfred Spectorvice president of engineering at Google, which may fund CornellNYC faculty posts.

To maintain closer ties to the technology industry, CornellNYC plans to focus research on real problems that companies are trying to solve. That’s a shift from a tradition in which academia sets the agenda, Huttenlocher said.

New Model

“We’re working on a new model,” he said. “We often think about education happening first and entrepreneurship happening second. We are trying to intertwine those at the same time.”

Companies will have a place on the campus as resident entrepreneurs and guest lecturers. A mentorship program will pair each student with an industry mentor. And businesses are already picturing CornellNYC as a recruitment hotbed.

Facebook lured 80 students to its Madison Avenue offices on July 21 for a 24-hour hackathon, an event organized with CornellNYC. In between bean-toss and mini-basketball games, students worked together in small groups to code and solve problems of their choice, huddled in an office with exposed plywood and pipes. Scooters and squirt guns were scattered around the room.

Cornell is one of the top schools from which Facebook recruits, said Jessica Traynor,academic-relations manager at the social-networking company. Facebook will probably host Cornell professors and students as presenters at its offices, and its staff may give lectures or teach at the campus, said Traynor, who helped Cornell on its bid for the project before joining the company.

Facebook’s Users

“Faculty are really interested in our scale, with 900 million-plus users,” Traynor said. Students could work with the company on topics such as systems engineering and human-computer interface, she said.

Facebook will compete for candidates with companies such as Groupon, which is including Cornell’s Ithaca and New York campuses on its recruiting list for the first time this year.

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