Summary:  Brooklyn is one of just a handful of regions across the country to capture a significant share of the growth occurring in the innovation economy—a set of industries fueled by technology, creativity, and invention that is driving much of the nation’s high-wage job gains. Over the past decade, Brooklyn has outperformed the rest of New York City in these innovation industries, which have added thousands of well-paying jobs for New Yorkers, helped diversify the borough’s economy, and given Brooklyn an important competitive advantage in a part of the economy that is expected to grow significantly in the years ahead.

Eli Dvorkin, the Editorial and Policy Director for the New York City-based Center for an Urban Future, spoke with reporters about a report he co-authored and the center released in June on Brooklyn’s tech and innovation economy.


MODERATOR:  We’re really pleased to have Eli Dvorkin here with us today.  He is the editorial and policy director for the Center for an Urban Future and he’s the co-author of the report that I’ve all passed around to you.  This report was released in June by the center.  Please note that Mr. Dvorkin’s views are his own and do not reflect the official policy views of the U.S. Government.

I’ll turn the program over to him in just a moment, but just take the opportunity to silence your cell phones if you may.  At the end of his remarks, if you raise your hand, and I’ll just recognize you, and if you could state your name and your media affiliation, that would be terrific.

Today’s briefing is on the record.  And with that, let me turn it over to you.

MR DVORKIN:  Great.  Thank you so much and thank you all for being here today.  It’s really a pleasure to speak with press about this report, which we did publish just a couple of months ago.  If we can move forward to the first slide.  In a moment.

In the meantime, let me introduce myself.  I’m Eli Dvorkin with the Center for an Urban Future.  We’re a nonprofit, nonpartisan research and policy organization based here in New York City.  Our focus is really on two things: one, on growing and diversifying New York City’s economy; and two, on strategies to expand economic opportunity for all New Yorkers.  And that’s really what brought us to this research and what brings me here today.

So for years we’ve written about opportunities to grow New York City’s economy in at least a couple of different ways: one, beyond Manhattan, the core of New York City’s jobs for more than a century, and into all five boroughs, so the boroughs outside of Manhattan; and two, to diversify away from what has traditionally been a heavy reliance on Wall Street as the primary source of our revenues as a city, our tax revenues as a city, and into a variety of other industries, really industries of the future that we can see are poised to continue to grow.

And so Brooklyn really combines these two focuses in a really interesting way.  One, it’s certainly a key source of good-paying jobs in industries that are primed for further growth; and two, it’s become really the hub for jobs outside of Manhattan, and in particular in three specific but interrelated industries – in the tech sector, in the creative economy, and in what we call advanced or innovative manufacturing.  And I’ll talk about all those things in a little more detail in a moment.

So we wanted to take a step back and really ask a question about there’s generally an understanding in New York today and potentially even internationally that Brooklyn has become a brand all on its own.  There’s the Brooklyn Brewery, which is sold in, I think, almost a hundred countries around the world now.  There’s – Brooklyn has become sort of synonymous with edgy, urban, cool, with innovations in fashion, in marketing, in advertising, in film and television.

But there hadn’t really been a lot of good data on what exactly is growing, and first of all, what do we mean when we talk about the innovation economy; and secondly, what exactly is growing in Brooklyn today.  So we took a look at the data to really better understand what’s going on in Brooklyn’s economy, what makes it tick, what makes it unique, which specific areas are growing and poised for further growth.

And in particular, we found that Brooklyn’s growth in tech startups, in creative companies, and in innovative manufacturers is outpacing not just Manhattan, the traditional hub for these jobs in New York City, but really the nation as a whole, which was actually somewhat of a surprise to us.  We certainly thought we were going to see a lot of growth in Brooklyn; I don’t think we realized just how much we were going to find with this analysis.

Hey, good afternoon.

And so as a starting point, we took a look at a data set from Crunchbase, which is one of the leading sources of information on startups nationally and internationally, which we were able to get access to through a research partnership.  And with that data set, we were able to take a look at the growth of startups in Brooklyn, and the slide that you see in front of you shows what we found, which was that Brooklyn has outpaced every major tech hub in the nation in startup growth over the past decade, second only to San Francisco, which everyone acknowledges is the leading startup hub in the world.

But the idea that Brooklyn was outpacing the rest of New York City and Manhattan, cities like Los Angeles, the whole San Francisco Bay area, Washington, D.C., Chicago, Seattle, Austin, and the list goes on, that was a real revelation to us, and we found that that 356 percent growth rate over the past decade was the second-fastest in the nation.

If we could go on to the second slide, it’d be great.  Thank you.

We also wanted to take a look at what this means for jobs in Brooklyn.  We looked at the last decade in particular, and we found that for both tech jobs and creative jobs that Brooklyn had far outpaced Manhattan, more so than I think anyone was predicting, almost double the rate of growth for tech employment, which was significant given that 10 years ago I think most people’s perception was New York City’s tech sector was synonymous with Silicon Alley in Manhattan.

But Brooklyn’s job growth in tech has grown faster in the last decade, and then in the creative economy it wasn’t even close.  Jobs in the creative industries in Manhattan grew 16 percent over the past decade and 155 percent over the past decade in Brooklyn, and that includes a variety of sectors.  When we talk about the creative economy, we’re including film and television, graphic design, architecture, industrial design, publishing, so a whole set of different industries that together comprise those creative fields.

We also took a look, by the way – and this is not reflected in the slide – but at how Brooklyn’s creative economy stacks up to the rest of the country.  And again, the question on my mind was:  Is this sort of hype or is this reality?  Has Brooklyn’s brand exceeded the reality on the ground in terms of job growth, or are we actually seeing this reflected across all these industries?  And the reality was we found that Brooklyn was in fact – we compared Brooklyn to the 25 largest counties in the nation, and we found that Brooklyn was either first or second among the nation’s 25 largest counties in employment growth across 17 different creative industries, which is really astonishing to see.

So then we took a look – and if you could go to the next slide, that would be great.  Thank you.

Then we took a look at manufacturing, and this was a more complicated story.  Generally, in New York City, since World War II frankly, manufacturing employment has been on the decline.  There were over a million New Yorkers working in manufacturing in the past century.  Today we’re at about 70,000 jobs, so just an incredible decline.  And this is understandable, I think, for a number of reasons – offshoring in the ‘80s and ‘90s, automation in more recent years, including today, certainly competition with other countries where labor costs were lower, or investments in technology combined with highly trained but less expensive labor, as in China.

And so clearly, we saw that manufacturing jobs were – we’ve seen the decline year over year over year for the past 20 years.  But what we found, which was surprising and interesting to us, was actually that manufacturing employment in general is up in Brooklyn specifically.  And this was not what I think most economists thought was happening, or most economic experts thought was the case.  As you can see, manufacturing employment since 2011 alone continued to decline in Manhattan, similar numbers citywide, but it’s up 1 percent in Brooklyn.

Now, we don’t want to make too big a deal out of a 1 percent increase, but the reality is that with manufacturing on the decline for decades, it was notable that there was any increase at all.  And since the Great Recession in particular, we’ve seen Brooklyn’s manufacturing sector start to rebound.

But we wanted to understand why.  And what the research showed us, what the analysis showed us, was that in a bunch of very specific manufacturing sub-industries that are closely linked with technology or with design, that’s where those manufacturing jobs are starting to grow.  So it wasn’t on assembly lines, it wasn’t the kind of manufacturing work that traditionally was the bulk of Brooklyn’s economy and New York City’s economy, but it was in fields where there was a close link between architecture and design or with technology, and in particular more advanced and innovative manufacturing: hardware manufacturing, manufacturing in fashion tech, and in other areas like engineering and architectural products where we saw the increase.

So all of that lent, I think, some credence to the idea that this innovation economy that we’re looking at in Brooklyn today, it also includes manufacturing, but it includes a very specific segment of the manufacturing sector that is really typified by higher-end technology, the intersection of technology and design, and typically sort of much higher value-add manufacturing.  And there we saw the increase.  And I should add that that 9 percent decline in Manhattan, citywide we saw a decline in that same period of 7 percent.  So it really was notable that manufacturing was up in Brooklyn.

If you could go to the next slide.  Great, thank you.

And then we also wanted to take a much closer look at what – when we talk about the startup economy in Brooklyn, when we talk about tech and the innovation economy, what exactly is growing?  And this analysis allowed us to take a much closer look at what’s happening in Brooklyn today.  So not only did we find that Brooklyn has a larger share of tech startups – in fact, the largest share since the data’s been available – now at 9.2 percent of all startups in New York City are in Brooklyn.  And that’s up from just 6.3 percent in the year 2000, so that’s a notable increase.  We found that Brooklyn has six times as many startups, for example, as Queens, the Bronx, and Staten Island combined.

But we also looked at what specifically was growing, and some of these categories are similar in Brooklyn as they are in the rest of New York City, or certainly in Manhattan.  So media and entertainment, e-commerce, fintech and financial services, data analytics – these are all sub-sectors that are strong in New York City in general and they were strong in Brooklyn as well.  But we also saw that Brooklyn has seen significant growth in a set of really emerging industries within the startup ecosystem that was notable.  Most of this startup growth was just since 2013, and in particular led by blockchain, where blockchain-enabled startups and blockchain-enabled companies – we had just one 2013.  We found 14 today.  There’s probably even more than that that weren’t captured in the data, but we therefore found that blockchain startups have actually grown faster than any other sub-industry in Brooklyn over the past five years or so.

Virtual reality was another one that really, I think, signals the direction that the startup ecosystem is moving toward.  Cryptocurrency is broken out separately in the dataset from blockchain technology, and so you can see that together blockchain and more specifically crypto companies were two of the three fastest-growing categories in Brooklyn.

And then you also see some categories a little further down but that also suggest Brooklyn’s growing edge at kind of the leading edge of the startup ecosystem: robotics startups, 3D technology, artificial intelligence almost tripled; government and military, which includes a number of hardware and manufacturing startups; and science and engineering as well.  So all of that kind of gave us a much clearer sense than we’d ever really had before of what’s actually growing uniquely quickly in Brooklyn.

We also found that Brooklyn has an edge over Manhattan in several key industries, which was – we thought was interesting.  One in particular which I think speaks to how Brooklyn’s positioned itself in the broader economy in New York was commerce and shopping.  Almost 18 percent of Brooklyn startups are in that category, compared to about 14 percent of Manhattan startups, and we really spoke to a lot of people that kind of corroborated that beyond the data itself, that there’s so much – there’s been an increasing focus on – among Brooklyn startups on marketing directly to consumers.  So when we talk about headwinds facing retail, e-tail and the struggles facing storefront retail spaces in New York, which is undeniably true, at the same time we’ve seen that in Brooklyn a lot of startup growth is actually in companies that are developing consumer products that they’re marketing directly to consumers, and that’s kind of a growing competitive advantage for Brooklyn.

One other one that’s worth pointing out, I think, in terms of the creative edge in Brooklyn is hardware.  For hardware startups, typically they need more space, and I think one thing that Brooklyn has that Manhattan can’t provide is room to experiment.  A lot of the startups in hardware, they don’t just want to cram people into office space and desks.  They need space for hackers and tinkerers, people to work in maker spaces, to be developing – using – to solder together circuit boards, to be able to prototype, and all of that takes spaces.  And frankly, companies can’t justify paying per square foot for space that they’re going to have a 3D printer or a soldering setup or a prototyping machine.  They can’t justify paying the same rates per square foot that you would put your senior software engineers in.  So we saw clearly that Brooklyn’s got a growing edge in hardware.  In fact, over 10 percent of Brooklyn startups are doing in some way hardware as opposed to just 7 percent in Manhattan.

There were a couple other categories where Brooklyn really has a notable edge over Manhattan.  Food and beverage is a big one, and that links both the startup scene and the manufacturing space.  In fact, there’s no one category of manufacturing that’s grown faster in Brooklyn than food manufacturing.  And again, we’re not talking about huge-volume, mass-produced products.  We’re talking about high value-add sort of artisanal products, everything from – there’s Brooklyn Brine pickles, Brooklyn Brewery beer.  So we saw a lot of action in that space, but then also startups that are fusing that with the latest technology and marketing direct-to-consumer products in the food and wellness spaces.

And lastly, I’d mention that music and audio startups, Brooklyn has a really notable edge.  Almost twice as many – twice as large a share of Brooklyn startups are in music and audio as in Manhattan, and you’ve seen that with some big stories in the news recently.  Podcasting is definitely anchored in Brooklyn.  Spotify just in the last few months acquired Gimlet Media, one of the fastest-growing podcasting startups in the world, paying a reported $220 million.  That was a major acquisition for Brooklyn in general, one of the largest acquisitions in the history of Brooklyn, but also specifically for the podcasting industry, which before 2013 barely existed.  Now we’ve seen that one of the fastest-growing media companies in Brooklyn is, in fact, a podcasting startup.

So those are some of the categories, and then manufacturing is the other one that I would add, that Brooklyn has almost three times the share of manufacturing startups as Manhattan does.

If you could go to the next slide, please.

We also just took a look at the overall number of new startups.  And some of this is, again, a little bit more predictable.  Most startups are doing software one way or the other.  That didn’t surprise us.  But media and entertainment was really a notable number two in terms of the overall growth of adding startups in Brooklyn, and we’ve seen that reflected in industries like podcasting.  Certainly in video production, Brooklyn has a large and growing edge, and it’s really the center of gravity’s shifted in many ways in media from Manhattan to Brooklyn increasingly.

For categories like commerce and shopping, we saw that the edge is really there in Brooklyn over Manhattan.  Fintech certainly I’d say the locus is still in Manhattan, but we saw a tremendous growth in Brooklyn, hardware I think uniquely so in Brooklyn.  And a couple of other categories that we’ve seen that were barely registering five or six years ago and that have grown significantly in Brooklyn – one in particular is real estate, or as some people call it proptech, of which there’s several new Brooklyn startups that are growing quickly.  Health tech, which makes a lot of sense because, actually, health care is the largest employer in Brooklyn, but health care technology companies and digital health companies have now been growing in a major way.

So that’s just a little bit of what we saw when we took a deeper dive into what sub-industries specifically were growing in Brooklyn.

And then the last thing I would add is that looking at some of the specific implications of all of this.  I think – is there one more slide?  Oh, that’s great.  This just backs up, I think,  some of what I was saying about where Brooklyn specifically has a larger share of startups than Manhattan does.

And you can see a couple other categories I didn’t mention but I think are notable, in particular, gaming.  As far as the world of video games goes, I think New York City struggled to become a leader.  I would say at this point there hasn’t been the same focus on New York City as on the West Coast and certainly other global hubs.

But where gaming has really taken off in New York in many ways is actually in Brooklyn.  The New York Games Center at NYU Tandon is sort of the biggest incubator for games in New York City today, and that’s based in Brooklyn.  And we saw in particular that we actually took a look at all of the games that have come out of Brooklyn developers in recent years, and those that have been awarded in various competitions, international competitions.  We really found that the largest share of nationally recognized or awarded games in the United States coming from New York City were coming from Brooklyn-based developers, which was pretty new.

And then yeah, the last thing I would add is just that, ultimately, we see this as a really vital new engine of growth for Brooklyn.  It is such an important source of good jobs today.  And the context, I think, is important.  New York City – I think everybody knows – has gone – has experienced a decade of record-setting job growth.  We’ve added over 700,000 jobs in New York City just in the past decade, the fastest pace of job creation in – really in modern history.

But what jobs have been created?  When you take a deeper look at the data, it actually shows that the biggest slice of those jobs have been very low wage.  We’ve added more jobs, more occupations as home health aides than any other occupation in New York City today, and a home health aide in New York City in 2019 makes on average about $25,000 a year.  And you all – I don’t need to tell anybody who lives in New York how expensive it is to live here, the cost of rent alone – $25,000 a year does not go very far.  And yet this is the fastest growing occupation.  Similar growth we’ve seen in other relatively or very low-wage sectors in food service, in retail.  This is where the bulk of New York City’s job creation has been.

At the same time, yes, we have added hundreds of thousands of well-paying jobs; much fewer than we’ve added at the bottom-paying end of the spectrum.  But typically, those jobs have been really too few in general, I would say, and also inaccessible to a broad range of New Yorkers, in part because they typically require a much higher level of training or educational credentials than many New Yorkers have today.

And what’s missing most of all is the jobs in the middle.  Of all three segments of the economy – the lower-wage work, the best-paying jobs, and those that pay somewhere in the middle – we’ve seen the fewest new jobs created in that middle range between about $40,000 a year and $80,000 a year.

And so one of our takeaways from all of this research is that these are actually the industries that are poised to grow those middle-class, middle-wage jobs in New York City.  We haven’t had nearly enough of them created over the past decade.  But in Brooklyn in particular, we see an enormous opportunity for this to be the combination of industries that comprise the innovation economy to be a really important source of good-paying jobs in the years to come, and we certainly saw that borne out by a look at the past decade.

And I think in particular, it also speaks to how New York is positioning its economy for the future.  We are a knowledge-based economy, but nowhere is that more true than in these interconnected innovation industries.  And as much as New York City is a – will continue to be a hub for finance, a hub for media, a hub for health care and other industries, it’s in these innovation industries where we really see the greatest potential for further growth.

And so the fact that Brooklyn has kind of grown this leading edge over the past decade is really good for New York City, we believe, and we think with the right mix of policies in place that that growth can be sustained in the future and that more New Yorkers can get on the pathway to the good jobs that are growing in the innovation economy.

So – and I’ll stop there for now, and happy to take any questions and speak with any of you about this in more detail.

QUESTION:  Hi, I’m Ken Moriyasu from the Nikkei Asian Review.  In Silicon Valley there is lots of foreign money coming in with keen interest to either coinvest or to purchase, also lots of talented students joining Silicon Valley.  Do you see any foreign inflow in Brooklyn or any —

MR DVORKIN:  Yeah, absolutely.  I think it’s interesting.  I mean, we just saw in the past quarter I think the largest venture capital total in New York City to date, which was really striking.  I mean, there’s been – generally, New York City has run in second place to Silicon Valley or in some years even third to the Boston area.  And I think in just this most recent quarter it really became clear that New York is quickly growing neck-in-neck with the Bay Area in that regard.

And a small but growing portion of that is foreign investment, absolutely.  I don’t have the numbers at my disposal, at my fingertips for Brooklyn specifically.  But anecdotally, I would say we’re seeing it happen.  New incubators and VC funds that actually have a global presence are starting – specifically starting locations in Brooklyn.  There was just news about one the other day that has their headquarters in Berlin, has a presence in four or five other countries.  And when they decided to open up a new location in New York City, they went first to Brooklyn.  So that, I think, indicates that there is a lot more interest there.  And generally, I think we’ve seen that this is the case across the spectrum of the innovation economy but particularly for tech startups.

There’s also been an increasing interest, I think, in the creative economy as well.  And those companies sometimes struggle compared to the tech startups because they’re not able to get venture capital dollars the same way.  Most of them are not going to post 10x growth and give you the kinds of – the kind of growth that the venture capital is looking for, but we do see that we’re – it’s very much – it’s a global market for what those creative companies provide.  And I think there’s increasing interest from companies that have a major presence in other hubs for fashion, for media, for – around the world to have their presence in the United States be in Brooklyn, which is a major shift from previous years.

MODERATOR:  Mr. Borisenko.

QUESTION:  Yeah.  Igor Borisenko with TASS Russian news agency.  What’s the underlying reason from your point of view of its success, economic success of Brooklyn?  Staten Island has more space, as you mentioned.  Space is one of the reasons for startup companies to choose Brooklyn.

MR DVORKIN:  Yeah.

QUESTION:  The underlying conditions in all five boroughs are mainly the same, but startups are choosing Brooklyn, as you just showed us with the statistics.  What’s the underlying reasons for that?  Why do they take that decision?

MR DVORKIN:  Yeah, it’s a great question.  I think number one is Brooklyn’s creative edge.  We’ve seen time and again that tech tends to follow creative.  And “creative” meaning not just the creative economy, the creative industries, but artists.  Artists have been – obviously, artists have been a presence in Brooklyn forever.  But in particular, as artists were priced out of Manhattan in the late ‘80s and early ‘90s and started to move to Brooklyn, we saw Brooklyn really become, in some ways, the new center of gravity of New York’s arts ecosystem.  And that long predates having accelerators or incubators for tech companies in Brooklyn, but I think it was the underlying shift that made Brooklyn what it is today.

And it’s only grown from Williamsburg and Greenpoint and Dumbo, where artists had lofts, but where also the developers in Dumbo have set aside subsidies so that there’ll be ground-floor gallery spaces.  We’ve seen generally that tech has sort of followed the path of the creative economy, and I think nowhere has had more success in building a creative ecosystem than Brooklyn.  So I would say that’s the first reason why we’ve seen this happen.

And I would also add that it’s one of the potential threats to Brooklyn’s incredible growth in the innovation industries.  Brooklyn needs to hold on to its creative edge to maintain that attractiveness.  A lot of the tech startup founders that I’ve talked to, they said we came to Brooklyn for a reason.  We didn’t just decide we’re going to go to Brooklyn because it’s a little cheaper, we chose Brooklyn.  And when I pry or probe them to understand why, time and again it came back to because Brooklyn’s got this creative energy that no one else can match.  So Brooklyn needs to hold onto that.

I would say the other factor – and it’s totally linked to Brooklyn’s creative edge – is the talent in Brooklyn.  Many founders and startup founders and CEOs told us we moved to Brooklyn because that’s where the talent is.  And that wouldn’t necessarily have been the same story five, ten or 15 years ago.  But in many cases, founders told us we wanted to have a shorter commute for our workforce.  We – there’s an unprecedented concentration of creative talent in Brooklyn, of tech talent, younger talent that’s hungry and kind of ready to build.  And companies said we want to be where our workforce is, and increasingly that’s in Brooklyn.  So I think those are the two main factors that have kind of fueled this growth.

There’s a couple of others.  When you talk about space, it’s absolutely true there’s more open space in Staten Island.  There’s industrial – underused or unused industrial buildings in the Bronx too.  And so those first two factors play into it first and foremost.  But in Brooklyn, you’ve also seen some really creative, adaptive reuse of former industrial buildings that provide the combination of affordability and, for lack of a better term, the sort of vibe that a lot of startup founders and innovators are looking for.

And I would point specifically to two projects that I think are tremendously successful in this regard.  One is the Brooklyn Navy Yard, which originally employed tens of thousands of people building ships for the U.S. Navy, was virtually abandoned 40 years ago, and is now on track to – now, in fact, has the highest employment in 20, 30 years through a very careful and intentional process of rehabbing old buildings and attracting a diverse mix of tenants that really reflects all three of these strengths – advanced manufacturing, creative businesses and artists, and tech companies.

The other one is Industry City in Sunset Park, which is actually – so the Brooklyn Navy Yard is a public development corporation.  Industry City is privately developed, but similarly was a set of – major set of warehouses that were heavily used in the ‘40s, ‘50s, started to slip in the ‘60s, became almost a ghost town by the ‘80s, had almost no employment left at all by the early ‘90s, now is on pace for – has I think over 6,000 jobs at this point – is on pace to – with an expansion plan to reach 15,000 jobs in the coming years.  And that was, again, through a really intentional adaptive reuse of these old warehouses to be able to become an attractive hub for these three key parts of the innovation economy.  So I would say those are some of the factors that specifically have led to the growth of the innovation economy in Brooklyn.

QUESTION:  Could I possibly have a follow-on?  Do you possibly have specific regulations or – well, use of underused industrial space for innovative companies?  Are there any particular stimulus – I mean economic stimulus or whatever the stimulus might be?

MR DVORKIN:  Right.  Yeah, well, it’s a good question.  I think one program that’s not unique just to industrial spaces but is designed to bring jobs outside of Manhattan is a tax incentive called REAP, R-E-A-P.  And this is a relocation program.  You may be aware that this was in the news somewhat recently because it was one of the as-of-right incentives that Amazon was eligible for to build their now scuttled second headquarters in Queens.

But REAP has, I think, been a really effective policy, specifically for companies relocating out of Manhattan.  It has to be outside of the area from Lower Manhattan to 96th Street, so it could be Upper Manhattan but also in any of the other boroughs.  And we’ve actually seen multiple examples of companies that have used that REAP incentive not just to relocate to Brooklyn but actually to relocate and expand.  So with a tax credit of I believe up to $3,000 per employee, companies have used that incentive to build out much larger spaces, to move from Manhattan, build out larger spaces, and actually hire more people in Brooklyn.  So that’s one in particular that’s been helpful in that way.

QUESTION:  And do —

MODERATOR:  Go ahead (inaudible).

QUESTION:  Bokula Shonuga with Global Media.  This has been fantastic.  My questions – you actually touched on some of them.  I was going to ask you what areas of Brooklyn you were referring to.  You mentioned Navy Yard, Sunset Park, and Dumbo – you didn’t mention Dumbo, but Dumbo’s one of the (inaudible).

MR DVORKIN:  Absolutely, yeah.

QUESTION:  So I wanted to add that when people in the international community, especially the black international community, think about Brooklyn, they think about some areas of Brooklyn that have not been specially mentioned.  They compare Brooklyn to maybe Brixton in London, which is a lower-wage sort of – so with the growth that’s happening in Brooklyn, gentrification has also played a role in how there’s income inequality.  Some people are not able to get those jobs that the market really needs skilled labor in those sectors.

So what do you think can be done I mean to really create some sort of equity in Brooklyn in general?  Because it’s not just – Brooklyn is huge.  It’s not just Dumbo and Navy Yard and Sunset Park, which are selected for – for good reason.

MR DVORKIN:  Absolutely.  Yeah, it’s a great question.  And you’re absolutely right.  I mean, I should have said at the outset, but certainly so much of this growth is concentrated in this sort of innovation corridor, starts in Greenpoint, runs through Williamsburg, down through the Navy Yard, downtown Brooklyn and Dumbo, and then down towards Sunset Park.  Brooklyn is a complicated borough.  I mean, like the rest of New York City, the opportunities that are accessible and those that pay well are reaching very different people.

So I would say a couple things to your question, which is really important.  One is that there’s generally I think this perception that New York is this – and I mentioned this at the outset – this highly educated major global city.  And in some cases, it’s true.  I mean, in Manhattan, with 61 percent of Manhattanites holding at least a bachelor’s degree or higher, that’s very much the case.  In Brooklyn, about 31 percent of residents have a bachelor’s degree.  In Brownsville, in eastern Brooklyn, it’s 10 percent.  So right off the bat, we can see that so much of the growth in well-paying work is also in jobs that typically require at least a bachelor’s degree, if not a higher level of education today.

It’s not the only way that companies should hire.  It’s not the – a bachelor’s degree doesn’t have to be the gold standard for demonstrating your ability to do the job.  I think part of what’s needed is a shift toward more competency-based credentials, so —

QUESTION:  (Inaudible.)

MR DVORKIN:  And absolutely.  One of those ways is if you can demonstrate that you can do the job, whether or not you have that for your degree, there are pathways that could be open to you with those – with the right credentials in place.  But I would start with the need to really dramatically boost the educational skills and attainment levels in Brooklyn.  With 31 percent of residents having a bachelor’s degree, it’s just simply not enough.

And when we look in particular at our public university system in Brooklyn, the results leave a lot to be desired.  CUNY, to its credit, has – the City University of New York has dramatically increased graduation rates in recent years, but by – but the increase is starting from a really painfully low point, which means that today, the average three-year graduation rate in the city’s community colleges for two-year degrees is about 22 percent.  That’s unacceptable if we want to move the needle on expanding economic opportunity.

We’ve done a lot in New York City to boost high school graduation rates, and Brooklyn’s been part of that growth.  But still, about half of all Brooklyn high school graduates are unprepared academically for college.  That’s a barrier.  When you look at other neighborhoods in Brooklyn where you have a large, for instance, immigrant population, Sunset Park being one of them, about 46 percent of Sunset Park adults lack a high school diploma.  About half of the population speaks English less than very well.  So there’s some real barriers to economic access, educational attainment, language skills, college degrees that really hold Brooklyn back.

And so from a starting point, I would say to make sure that the growth that we’re seeing in these industries of the future can actually benefit more Brooklyn residents, we have to make much deeper investments in our public education and skills-building infrastructure.

QUESTION:  I have a follow-up question:  What is – what do you think are the policies that are attracting foreign investment to the area (inaudible)?  I was reading about H1 visas (inaudible) – HB-1 visas (inaudible).

MR DVORKIN:  H-1B visas, yeah.

QUESTION:  In the tech industry, specifically (inaudible), there are a lot of, how do I say, professionals in a foreign country that an employee (inaudible) and getting work from an employer that can sponsor (inaudible).

MR DVORKIN:  Right.

QUESTION:  So that’s what’s really is a barrier in terms of (inaudible) don’t have access (inaudible).  So what are the foreign policies specifically that you can speak to that are attracting foreign investors (inaudible)?

MR DVORKIN:  Yeah.  Well, I think those are a couple of different questions.  I mean, no, they’re interesting.  I think they require kind of slightly different responses.  For this report and for some of the recent research in Brooklyn – and it’s funny, I was speaking with one of the folks here in the Foreign Press office before this.  I have a background in international relations before I moved into focusing on New York City public policy, but it’s been a few years, so I’m not sure that I’m able to really speak to specific federal international – federal policies that would change – that would incentivize or change foreign direct investment specifically for Brooklyn.

But on the – to the point about H-1B visas, I would say we do hear this from tech employers, absolutely, that restrictions on H-1B visas have been a challenge for hiring the kind of skill talent that they’re looking for.  I would say that in Brooklyn, we don’t hear that as much, I think in part because so many employers set up shop in Brooklyn in the first place because there was such an ample supply of really great talent.

But I would – but at the same time, I think as companies in Brooklyn seek to grow, talent’s going to become a much bigger issue.  If you ask people, “Has it been a problem so far to attract and retain the talent you need,” I think most Brooklyn startup employers will say, “No, people want to work for us and they want to be in Brooklyn.  They’re already here.”  But when you ask people, “Do you see the need for talent becoming an obstacle to growth in the future,” suddenly the tune changes and you hear a lot more employers say, “Yeah, we can actually kind of see that on the horizon.  We see a future where the talent crunch starts to hurt us.”

And in part because they’re not just competing with other startups in Brooklyn; they’re competing with much bigger players in the tech ecosystem that can beat them on compensation every single time.  So between competing for senior software engineers, for instance, with Google, with Facebook, with other large employers and other small startups, there’s a real squeeze, and I think they increasingly see that that could be an obstacle to further growth in the future.

So one way to mitigate that certainly would be allowing more – first of all, allowing more skilled workers from abroad to come here and work in those companies.  Certainly, another part of that is making sure that there are pathways for New Yorkers who are immigrants who are here today but who may not be documented to be able to stay here, grow here, become documented, and ultimately join this economy.

But I think for the most part, the key issue is actually that Brooklyn become a much bigger participant in developing its own workforce for the future, that I think the most important way that we can ensure a sufficient supply of skilled workers for Brooklyn’s growing innovation economy companies is to make sure that we’re training that workforce right here in Brooklyn.

QUESTION:  Thank you.

MR DVORKIN:  Yeah, absolutely.

QUESTION:  Could you provide more information about those startup companies focusing on sustainability and the agriculture farming in Brooklyn?

MR DVORKIN:  Sure, yeah.  I mean, this is something I could follow up with you sort of specifically afterwards and I could send you examples of some of them.

QUESTION:  Great, thank you.

MR DVORKIN:  I would say that there’s a couple things happening there that are interesting.  One is that I think because of the space reasons in part, Brooklyn has room for some of these sort of ag tech startups – urban agriculture startups.  They have enough space to actually implement prototypes of their inventions or their designs.  So we actually have multiple urban farms in Brooklyn, but more importantly, I think, we have multiple companies that are developing proprietary or innovative urban farming technology.

And I think that’s the difference.  An urban farm to me isn’t a startup necessarily, although it’s certainly an entrepreneurial venture, but a company that’s developing new technology to power the urban agriculture of the future, that’s a startup in my mind, and that’s sort of what we’re seeing captured in that sort of sustainability and urban agriculture tech sub-sector: companies that are developing innovative systems to recycle water for hydroponic growing, for example; companies that are developing stacked farms that you can – where instead of having to grow horizontally, you grow vertically.

There’s a company called Gotham Greens that’s based in Brooklyn that’s developing kind of essentially sort of farm-to-market greenhouse systems to grow produce that would then be sold right in markets in the – I mean, in supermarkets in the surrounding market.  There’s a couple of others that have developed sort of innovative systems for monitoring urban farming infrastructure.

So that’s sort of what we’ve started to see in Brooklyn specifically, and definitely those companies that are finding success here, they’re – what’s scalable about that model is that they can bring it to other cities as well.  So Brooklyn’s become kind of an interesting incubator for companies that are developing those kinds of technologies.

QUESTION:  Very interesting.

MR DVORKIN:  Absolutely.  On the sustainability side, there’s a lot more too.  I mean, companies that are doing everything from renewable energy, linking solar panel systems for rooftop infrastructure, smart metering for water systems.

There’s a hardware startup in the Brooklyn Navy Yard that’s basically built a smart radiator cover.  And this is a very New York-specific problem, right?  I mean, if anybody has lived in New York for a winter, right, you know that your apartment is either too hot or too cold, there’s sort of no happy medium.  Well, this company has actually developed a radiator cover that will automatically regulate the amount of heat that’s released from the radiator.  It saves money and it ultimately means that you can even out the – so it sounds like a very New York-specific problem to solve, but actually, anywhere that there is radiant heating systems, this smart cover would actually make a difference.  And they’ve now grown from just an initial prototype and they now actually have something on the market.

So there’s a number of companies in Brooklyn alone that are doing that kind of, I would say, sort of sustainability startup tech.  Yeah.

QUESTION:  Very cool.

MR DVORKIN:  Yeah.

QUESTION:  Brooklyn is very famous for trendy, creative city, but also famous for very high rate of crime.  Have you ever – do you hear any – often many like concerned people who want to open the business in Brooklyn, especially outside of the city, outside of the country?

MR DVORKIN:  Yeah.  Well, I mean, I think the first thing to be said is that New York is one of the safest big cities in America and one of the safest big cities in the world.  It hasn’t always been the case, but the perception of Brooklyn as a dangerous place was really forged in the ‘80s and ‘90s and, generally speaking, isn’t really true anymore today.  Brooklyn’s crime rate has been plummeting along with the rest of the city’s crime rate for 20 years now.  Neighborhoods that were considered really dangerous even as recently as 15 years ago – I’m thinking about Bushwick in particular, which has now become one of the hubs of New York’s creative scene and certainly in Brooklyn, but Bushwick reported fewer murders this past year than any year since 1991 and – or rather, it’s been declining since 1991, fewer murders than any year since the 1960s, and every single major category of crime has declined.

So for the most part, that’s the reality in Brooklyn today.  I would say that the unprecedented decline in crime in New York City in general and in Brooklyn in particular laid the groundwork for this economic renaissance that we’re seeing today.  I mean, everybody feels safer; people are more willing to invest; people are more willing to shop, to come out in the streets, to be participants in public life; and we owe so much of that to the fact that crime has declined.

But I would say that today I don’t think that really is a major barrier in most of Brooklyn.  That being said, there are parts of Brooklyn – the parts of Brooklyn that have not benefitted, frankly, from the economic growth that we’ve seen in the rest of the borough – parts of Brooklyn that are predominantly communities of color, low-income communities with fewer – less investment, fewer resources, and where crime continues to be persistent.  It’s still much lower.  Levels have declined across the board in the wealthiest neighborhoods and in the poorest neighborhoods, but we certainly see that there’s a lot more work to be done, I think, to make sure that neighborhoods that have been left behind in many ways get the support, the investments that they need, to be able to achieve some of the same economic progress that the rest of the boroughs experienced.

So hopefully that kind of answers your question, but I would say generally that the biggest takeaway is that crime has really reached a record low or a historic low, and it’s opened the door for a lot of the activity that we’re seeing.  But I think that generally it’s more – if there’s a lingering perception, the perception doesn’t match up with reality, which is the good news, but yeah.

QUESTION:  One more question.  I saw this number: 19 startups in Brooklyn in 2000 – in 2000.  Can you – do you remember at the very beginning, what was a company, you know —

MR DVORKIN:  That’s a good question.  Yeah, I think one company that I think most people know that really kicked off a lot of what we see now in Brooklyn’s startup ecosystem is Etsy.  Etsy is probably one of the – sort of the backbone of the New York startup ecosystem.  No longer a startup; I mean, it’s – Etsy’s been in – is a public company now.  It’s been in business for close to 20 years now.  And if you don’t – if anybody doesn’t know Etsy, it’s a sort of a leading online marketplace for handmade goods.  And they’ve now – they now employ well over 500 people from a massive headquarters in Brooklyn.  They’re a real homegrown kind of Brooklyn success story, and I think they’re one of those companies that was potentially there all that many years ago that are still part of the ecosystem today.

And there’s a few others that didn’t maybe quite grow as large as that, but Dumbo I think in particular is sort of where you saw that activity first, and some of the companies that have stayed or grown – Huge is another one, which is sort of a digital marketing agency – they’ve made Dumbo their home.  And then since then we’ve seen so many more companies grow, but there are a couple from the early days of Brooklyn as a kind of a new turf for startups that are still with us today.  There are a few.

QUESTION:  So the branding “made in New York City,” is that – that’s also deliberate in terms of promoting things that Brooklyn produced?

MR DVORKIN:  Yeah, absolutely.

QUESTION:  Did that start in Brooklyn or was it (inaudible)?

MR DVORKIN:  No, that was through the New York City Economic Development Corporation, so it applies sort of everywhere.  But yeah, absolutely.  But I think that there is – I would actually say that as far as the kind of “made in Brooklyn” identity, I think a lot of credit goes to the Brooklyn Brewery, actually, which people may not remember now but started in the late ‘80s.  I mean, it was a totally different era, and now it’s known globally.  I think in a lot of ways they really did a lot to kind of make – put Brooklyn back on the map, as it were, and then a lot of other companies since then have seized on the identity of Brooklyn and made it kind of a key part of their story.  But yeah.

MODERATOR:  We have time for one more question.

QUESTION:  So do you think the experience of Brooklyn would have opportunities to message – be messaged to other cities in United States in terms of how to amplify this experience or lessons and make the other cities with a similar history in growing faster and better?

MR DVORKIN:  Yeah, I would say to that, I think it already has.  I would say cities across the country want either to be Brooklyn or they want a Brooklyn of their own.  We’ve definitely seen that already.  Partly the idea of how do you help a kind of a traditionally industrial economy reinvent itself for a new era, part of it around just the strength of Brooklyn as a hub for creativity and how that has led to so much further investment, more job creation, the beginnings and now the – really the growth of a tech ecosystem, so much of that came from Brooklyn’s roots as this hub for creativity.  And I think a lot of cities have wanted to learn from that.

But I think to your question as well, there’s another side to it, which is: Can Brooklyn become a leader in building an inclusive economy?  I think where New York City has so much potential but also a lot of work to do is to build on all the strengths that have made Brooklyn a leading hub for these industries that are poised to keep growing and to figure out how do we make sure that more residents can actually benefit from that growth.  I think if there’s one thing that I want other cities to take away from this it’s that you need to have both a creative economy that fuels the growth of this broader set of innovative industries and that you need to couple that with the sorts of investments in education and workforce and skills that are needed to make sure that everyone can benefit from that growth.

And I think Brooklyn is well-positioned to be a leader on both sides of that equation today, and I would hope that as we kind of develop that model for Brooklyn, that that can become – whereas every city has wanted to have a Brooklyn just in terms of growing an innovative economy, that I want every city to want to have a Brooklyn because they want to grow an innovative and inclusive economy.  And I think that’s the vision that the city is working toward now.

MODERATOR:  So thank you very much for your remarks today, your time and your willingness to be here, and thank you all for coming.  Today’s briefing was on the record and we will share a transcript as soon as it’s finished.  And if you haven’t received a copy of the report, I think I have some extras.  And that officially concludes today’s briefing.

 

U.S. Department of State

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