Silicon Alley, centered in Manhattan, has evolved into a metonym for the sphere encompassing the New York City metropolitan region's high tech industries including, the Internet, new media, telecommunications, digital media, software development, biotechnology, game design, financial technology (fintech), and other fields within information technology that are supported by the area's entrepreneurship ecosystem and venture capital investments. As of 2014, New York City hosted 300,000 employees in the tech sector.
In 2015, Silicon Alley generated over US$7.3 billion in venture capital investment, most based in Manhattan, as well as in Brooklyn, Queens, and elsewhere in the region. High technology startup companies and employment are growing in New York City and across the metropolitan region, bolstered by the city's emergence as a global node of creativity and entrepreneurship, social tolerance, and environmental sustainability, as well as New York's position as the leading Internet hub and telecommunications center in North America, including its vicinity to several transatlantic fiber optic trunk lines, the city's intellectual capital, and its extensive outdoor wireless connectivity.
The term Silicon Alley was derived from the long established Silicon Valley in California. It was originally centered in the Flatiron District, in the vicinity of the Flatiron Building at Fifth Avenue near Broadway and 23rd Street, straddling Midtown and Lower Manhattan. Silicon Alley had initially also been a term used to extend to Dumbo, a neighborhood in Brooklyn. Companies that reside in Dumbo range from Web Liquid, a digital marketing agency, to Amplify Education, an education technology company. However, Silicon Alley was always a name more than a place, and as entrepreneurship spread outward to other locations across Manhattan, New York City, and the New York metro area, and evolved beyond Internet and new media ventures, the scope of the term has also expanded to be metonymous for a broad spectrum of entrepreneurial activity throughout the New York City metropolitan region.
The term Silicon Alley may have originated in 1995 by a New York staffing recruiter, Jason Denmark, who was supporting clients in the newly dubbed technical hub in downtown Manhattan; in an effort to attract candidates who, at that time, were focusing on positions in Silicon Valley, he posted in public usenet postings of Object Technology Developers, job ads with the Silicon Alley label. "Subject: NYC - silicon ALLEY" shows up in an internet post by Jason Denmark on February 16, 1995; another Jason Denmark post on June 16, 1995, is "Subject: SILICON 'ALLEY' POSITIONS."
The first publication to cover Silicon Alley was @NY, an online newsletter founded in the summer of 1995 by Tom Watson and Jason Chervokas. The first magazine to focus on venture capital opportunities in Silicon Alley, AlleyCat News co-founded by Anna Copeland Wheatley and Janet Stites, was launched in the fall of 1996. Courtney Pulitzer branched off from her @The Scene column with @NY and created Courtney Pulitzer's Cyber Scene and her popular networking events Cocktails with Courtney.
First Tuesday, co-founded by Vincent Grimaldi de Puget and John Grossbart, became the largest gathering of Silicon Alley, welcoming 500 to 1000 venture capitalists and entrepreneurs every month. It was an initiative of law firm Sonnenschein and the Kellogg School of Management, as well as other corporate founders, including Accenture (then Andersen Consulting), AlleyCat News and Merrill Lynch. Silicon Alley Reporter started publishing in October 1996. It was founded by Jason Calacanis and was in business from 1996–2001. @NY, print magazines, and the attending media coverage by the larger New York press helped to popularize both the name, and the idea of New York City as a dot-com center.
In 1997, over 200 members and leaders of Silicon Alley joined NYC entrepreneurs, Andrew Rasiej and Cecilia Pagkalinawan to help wire Washington Irving High School to the Internet. This response and the Department of Education's growing need for technology integration marked the birth of MOUSE, an organization that today serves tens of thousands of underserved youth in schools in five states and over 20 countries. After the bubble burst, Silicon Alley Reporter was rebranded as Venture Reporter, in September 2001, and sold to Dow Jones. Self-financed AlleyCat News ceased publication in October 2001.
A couple of years after the Internet bust, Silicon Alley began making its comeback with the help of NY Tech Meetup and NextNY. Since 2003, Silicon Alley has seen a steady growth in the number of startups and has joined the ranks of Silicon Valley and Boston as one of the three leading technology centers in the United States. As of 2009, New York's Silicon Alley had become the startup leader in advertising, new media, financial technologies such as MediaMind, Shutterstock, DoubleClick IAC, meetup.com and a slew of web 2.0 companies. As of 2013, Google's second largest office was located in New York.
The biotechnology sector is also growing in Silicon Alley, based upon the region's strength in academic scientific research and public and commercial financial support. On December 19, 2011, then Mayor Michael R. Bloomberg announced his choice of Cornell University and Technion-Israel Institute of Technology to build a US$2 billion graduate school of applied sciences on Roosevelt Island, with the goal of transforming New York City into the world's premier technology capital. By mid-2014, Accelerator, a biotech investment firm, had raised more than US$30 million from investors, including Eli Lilly and Company, Pfizer, and Johnson & Johnson, for initial funding to create biotechnology startups at the Alexandria Center for Life Science, which encompasses more than 700,000 square feet (65,000 m2) on East 29th Street and promotes collaboration among scientists and entrepreneurs at the center and with nearby academic, medical, and research institutions. The New York City Economic Development Corporation's Early Stage Life Sciences Funding Initiative and venture capital partners, including Celgene, General Electric Ventures, and Eli Lilly, committed a minimum of US$100 million to help launch 15 to 20 ventures in life sciences and biotechnology.
Verizon Communications, headquartered at 140 West Street in Lower Manhattan, was at the final stages in 2014 of completing a US$3 billion fiberoptic telecommunications upgrade throughout New York City.
In December 2014, the state of New York announced a US$50 million venture-capital fund to encourage enterprises working in biotechnology and advanced materials; according to Governor Andrew Cuomo, the seed money would facilitate entrepreneurs in bringing their research into the marketplace.