In the long-running rivalry between Boston and New York, there are realms like finance where New York edges Boston out, and others like sports where dominance teeter-totters between the two cities. But Boston’s innovation economy has always remained one step ahead of its rival’s. So many of the Hub’s boosters winced last week when a new study found that the growth of technology start-up companies in New York is now outpacing Boston’s.
The Start-up Compass study found that while Boston has a “well-established angel and venture capital scene,” the city creates 79 percent fewer start-ups than the leader, Silicon Valley. That was enough for the technology data firm to proclaim that Boston has lost its position as “front-runner on the East Coast” and crown New York as the “true alternative to Silicon Valley.” While the findings are just the opinion of one firm, they should serve as a reminder to city officials, university administrators, and established business people here in Boston and Cambridge that the region’s position as an innovation juggernaut can’t be taken for granted.
But its conclusions shouldn’t be overblown, either. As technology writer Walter Frick rightly pointed out, the study focused solely on start-up activity from Internet software companies. That sector is New York’s strongest, with its other sectors lagging far behind. In Boston, Internet software is only one part of the city’s more varied start-up economy.
More importantly, leaders of Boston’s innovation economy have long argued that viewing New York as a rival is shortsighted, because the two cities have more to gain in partnership than in competition. If Boston-area start-ups had easier access to New York financing, they might feel less of a need to move to California in search of money. Indeed, even with their venture-capital resources added together, Boston and New York still don’t eclipse Silicon Valley as a start-up hub. At least in terms of the innovation economy, it makes sense for Boston and New York to lose their rival mentality and consider a truce. At least temporarily.