Placeholder Image

Subtitles section Play video

  • - [Narrator] This is Hudson Yards.

  • Late in 2019, Facebook completed a lease

  • for over 1.5 million square feet of space

  • across three buildings in the area.

  • Amazon also has an office down the street.

  • And if you go further down the Hudson River,

  • you'll find a cluster of buildings

  • leased or owned by Google.

  • It seems like everyone in tech wants

  • a piece of New York City's West Side.

  • - There's a reason that most of the major

  • big tech brand platforms are based in a few places.

  • They wanna be near each other

  • and they wanna be near some of the same resources.

  • - [Narrator] Mark Muro is a fellow

  • at the Brookings Institution,

  • a Washington DC think tank.

  • He and other economists call

  • this clustering agglomeration.

  • - Agglomeration is the tendency of economic activity

  • to gather, or cluster, or clump together.

  • It happens because there are often benefits

  • to businesses, workers, and institutions

  • being close to each other.

  • - [Narrator] That clustering can build up an economy,

  • but there's a catch.

  • - Even the winners don't feel like winners.

  • If you're in traffic choked, expensive San Francisco

  • you don't feel like the current clustering

  • is working for you,

  • and neither does anybody else in the United States

  • and in the Heartland.

  • - [Narrator] To understand how an agglomeration gets going,

  • consider New York City.

  • Tech clusters typically rely

  • on a robust pool of workers

  • and the labor pool in New York

  • is more educated than the national average.

  • Analysts say that it's become difficult

  • to find qualified workers

  • in hotspots like Silicon Valley,

  • which makes New York attractive for expansion.

  • Experts say that labor is key.

  • - Obviously, we've seen these clusters develop,

  • you know, all over the world.

  • The reason they occur is because,

  • when you draw people together

  • they learn from each other.

  • - [Narrator] Capacity for growth on the far West Side

  • grew in the 2000s during Michael Bloomberg's

  • run as city mayor.

  • Doctoroff was his deputy.

  • - We did 140 separate rezonings of the city.

  • Often of old, under utilized, industrial land

  • that opened up the capacity to develop

  • all sorts of new areas.

  • So, we embarked on a massive expansion

  • of capacity for space.

  • - [Narrator] The city also extended the subway

  • for the first time in 25 years.

  • - [Dan] One of the big problems

  • on the West Side of Manhattan

  • was there was no great way to get over here.

  • $3 billion was invested in the extension of the subway

  • into the area as well as other infrastructure.

  • - [Narrator] Also the city provided land

  • and millions of dollars for a new Cornell Tech campus.

  • - Cornell Tech plays a crucial role

  • in the New York tech ecosystem.

  • Often times, the research really shows is that

  • universities catalyze that kind of collaboration

  • better than almost any other institution.

  • - [Narrator] All this new development

  • laid the groundwork for tech companies

  • to open offices on the West Side,

  • forming a cluster of highly skilled workers.

  • - A big agglomeration of say high-tech economic activity

  • is simply going to be more productive

  • and more competitive than others

  • because think of what it has close proximity,

  • highly specialized workers,

  • highly specialized providers of business services.

  • - [Narrator] Research from Mr. Muro and others

  • suggest that workers who live in these clusters

  • tend to be more productive than those who don't.

  • Here's a chart that measures

  • output per worker by industry group.

  • Workers in industries like manufacturing or retail

  • tend to be more productive

  • if they're in a top cluster.

  • That advantage stretches further

  • if you're a worker in an innovation industry.

  • The effects are so potent

  • that some of the cities who've generated clusters

  • are pulling away from the rest of the country.

  • But that poses challenges for Americans

  • both in and outside the clusters.

  • - You only have to look at the complaints

  • of people who live in Seattle or the Bay Area

  • to see that very serious negative implications

  • of excessive or poorly managed agglomeration.

  • - [Narrator] Like the tech hubs

  • in Seattle and San Francisco,

  • New York has issue with affordability.

  • Late in 2019, the median home in New York City

  • sold for $563,000 which was much higher

  • than the national median.

  • A similar story unfolds in the commuting data.

  • Most states in the New York metropolitan region,

  • have commute times well above national averages.

  • And in the city proper,

  • commute times are on the rise.

  • In some cases,

  • tech workers earn enough to make the pain worthwhile

  • and that's encouraging educated people

  • to leave smaller cities.

  • In the big coastal cities,

  • wage and employment levels are outpacing

  • other parts of the country.

  • - We have Google, Facebook, Amazon combined

  • over 20,000 jobs in the near future.

  • We have 9,000 startups in New York City.

  • It's increasingly true that

  • every company is a tech company.

  • Whether you're in finance,

  • whether you're in real estate,

  • whether you're in fashion, media.

  • You name it,

  • all of these sectors are already headquartered here,

  • and they need people who understand

  • and know how to build technology.

  • - [Narrator] In regions further from the top,

  • incomes and employment levels aren't keeping pace,

  • which sends a message.

  • - For the foreseeable future,

  • to really have a great career in tech in America,

  • you probably do need to head out to

  • the Bay Area, or New York, or Seattle

  • and work for one of the big tech titans.

  • I think that's an unfortunate reality in the United States.

  • (upbeat music)

- [Narrator] This is Hudson Yards.

Subtitles and vocabulary

Operation of videos Adjust the video here to display the subtitles

B1 US WSJ tech narrator york west side cluster

Why Tech Firms Flock to Expensive Cities | WSJ

  • 49 1
    Amy.Lin posted on 2020/06/30
Video vocabulary