While Silicon Valley made its reputation primarily through the design and manufacture of microprocessors and related hardware; Silicon Alley’s upstart entrepreneurs initially sought to leverage New York’s long-time comparative advantage in advertising and media content production. But as investment flowed into the notorious “dot.coms,” a wide variety of new media companies emerged and the name “Silicon Alley” was coined. Michael Indergaard’s (2004) Silicon Alley: The Rise and Fall of a New Media District documented the history of this phenomenon from a sociologist’s perspective, drawing on previous work he had done analyzing the decline of the industrial Midwest.

Shortly after arriving at the Manhattan campus of St. John’s University, Indergaard witnessed firsthand the rise of the digital industry in the area. He drew on his background in economic sociology, which proposed that firms learn from cognitive networks and cultural conventions to identify market patterns and competitors.^[1] He was also influenced by a growing body of work looking at the political economy of geography, examining the role of cities in the global economy and the function of clusters of similar businesses.

This type of spatially-oriented economic analysis accelerated in the early 1990s, gaining international credence with Michael Porter’s Competitive Advantage of Nations (1990) that highlighted the role of clusters of interrelated companies. Porter’s work traversed the macroeconomic focus on the national economy and the microeconomic analysis of the individual firm. He turned the focus onto the interstices of the political economy; on the complementary infrastructure and institutions as well as the competition between firms. Instead of looking just within the company, and its markets, attention began to include its competitors, as well as an inter-related network of suppliers and supporting institutions such as universities, think tanks, trade associations, vocational training centers, as well as related government agencies and public utilities.

Even a company’s competitors were seen as part of a dynamic and interrelated fabric of related companies; sharing (sometimes stealing) ideas on market opportunities, production techniques, promising personnel, and access to capital. Clusters were purported to have a threefold effect:

• They increase the productivity of the firms within the cluster through access to specialist inputs: labor, knowledge, and technology;

• They promote innovation by making all firms more aware of new opportunities and enhance the capacity for rapid and flexible responses to those opportunities;

• They promote new business formation in related sectors through the access to the necessary labor, skills, knowledge, technology, and capital.^[2]

Richard Florida’s (2002) The Rise of the Creative Class combined his interest in regional development with an examination of how employment patterns were changing. Dissatisfied with standard occupational classifications and the debate about the post-industrial transition to a knowledge or service society, he posited the need for a new category, what he called the “Creative Class.” He argued that while service and other working jobs required carrying out a planned set of activities; the creative class had more autonomy and flexibility than the other two and was paid to be inventive. He argued that this distinction made his classification more accurate than prevailing terms like “knowledge workers, symbolic analysts or professional and technical workers.”^[3] Florida then tied the creative class to the importance of creative places and with how people he considered working in creative occupations gravitated towards specific places.

Creative people don’t just cluster where the jobs are. They cluster in places that are centers of creativity and also where they like to live. From classical Athens and Rome to the Florence of the Medici and Elizabethan London, to Greenwich Village and the San Francisco Bay Area, creativity has always gravitated to specific locations. As the great urbanist Jane Jacobs pointed out long ago, successful places are multidimensional and diverse—they don’t just cater to a single industry or a single demographic group; they are full of stimulation and creativity interplay.^[4]

Not surprisingly, Florida identifies New York as one of the four global “mega-cities” along with London, Paris, and Tokyo in the competition for creative talent but hastens to mention the increasing competition from other global cities such as Chicago, Los Angeles, Milan, and Singapore as well as several second and third “tier” cities from Austin, Boston, and Brussels to Washington DC, Wellington, and Zurich. He stresses that congestion and rising inequalities resulting in such difficulties as overpriced housing markets threaten these center cities; and rising intolerance to immigration, a long-time bedrock of American economic success, cuts off a critical flow of creative talent to firms and universities.

Indegaard acknowledges Florida’s argument and connects creative talent and the enclaves that attract them to the particular problems of digital media applications and content production. This inquiry involved two strategies.

The first involved looking at the people and identities involved as well as the creative impulses and motivations that made new media and Silicon Alley attractive. The hacker had been one prominent identity associated with the use of computer technologies, and the recessionary times of the early 1990s led to a new grouping of what some began calling “cyberslackers.” These “techno-bohemians” were noted for their social circuits and a culture of loft parties where they shared artistic and technical knowledge related to the new media^[5]. The introduction of the World Wide Web and the Netscape browser in 1994 accelerated interest in the Internet as images and text could be shared and displayed readily. Artists began experimenting with the new medium and sought business ties to support their endeavors.

The term “new media” was particularly attractive to many of the Silicon Alley immigrants as it differentiated them from “computer people.” Many also saw new media as challenging the traditional New York broadcast and publishing powers and having the potential to allow formerly marginalized voices to be heard. Many web pioneers became entrepreneurs as the web began to get media attention and entered the public consciousness. Soon, investment capital became readily available, attracting even more web hopefuls looking to stake their claim on the riches of cyberspace. Many of the successful ones went on to become venture capitalists, guiding new companies in exchange for significant ownership stakes.

The second strategy required an inquiry into the role of culture and its relationship to digital content production and the quest of the industry to find that “killer application” that would transform cultural content in a readily commodified form. Tenants of Silicon Alley were cognizant of their relationship to the media and cultural industries of New York City and sought to capitalize on its heritage of publishing, broadcasting, fashion, and graphic arts. While ad services such as 24/7 and DoubleClick sought to capitalize on the Madison Avenue mystique. Music, art, theater, antiques, museums, and tourist sites were also subject to the innovative recombinant processes of deconstruction and reconstruction within the digital context of cultural production. This production and consumption of digital culture also expanded into community and lifestyle websites such as iVillage (women) and Starmedia.com (Hispanic).

The dot.com market’s bubble burst in 2000 with the collapse of many Internet companies, leading to a downturn for Silicon Alley. Many startups folded, and funding dried up. The tech sector in New York saw a sharp decline as entrepreneurs and investors became more risk-averse, causing many to question the future of Silicon Alley. At the time, share prices of Internet-related companies dropped dramatically. NASDAQ, the online stock exchange that specializes in high-tech stocks, declined over 3000 points from a high of just over 5,000 in March of 2000. Venture capital continued to prop up the NYC market through 2000, but firms came under increased scrutiny to become profitable. Furthermore, the newly unemployed were quickly absorbed by a wide range of companies and non-profits anxious to develop or expand their web presence. However, as stock prices continued to fall and companies began to be delisted from NASDAQ, morale began to falter. Although temporarily buoyed by the AOL/Time Warner merger.

By the late 2000s, the NYC media industry experienced a revival. This time, the sector diversified beyond traditional Internet and media companies. It became a hub for a broader range of technology industries, including fintech, e-commerce, ad tech, social media, and software development. Companies like Etsy, Foursquare, and Tumblr emerged during this period, signaling a new era for the tech scene in New York. Mayor Michael Bloomberg’s administration also championed the city’s tech sector, launching initiatives to attract technology talent and startups. The city invested in infrastructure, including the Cornell Tech campus on Roosevelt Island, aimed at nurturing future generations of tech entrepreneurs.

While Silicon Alley initially referred to the tech scene concentrated in Manhattan, particularly in the Flatiron District and SoHo, the term became less geographically specific as the tech industry spread to other boroughs. Brooklyn, particularly the neighborhoods of DUMBO and Williamsburg, became popular among startups and tech firms due to lower costs and access to creative talent. Queens and the Bronx also saw growth in their tech companies. By the early 2010s, New York City had become the second-largest tech environment in the United States, after Silicon Valley. Tech giants such as Google, Facebook, Amazon, and Twitter opened major offices in the city. The city also became a magnet for tech talent, with universities and coding boot camps catering to the growing demand for software engineers, data scientists, and other tech professionals.

Citation APA (7th Edition)

Pennings, A.J. (2010, Jan 16). Remembering New York’s “Silicon Alley.” apennings.com https://apennings.com/digital-geography/remembering-new-yorks-silicon-alley/

Notes

Citation APA (7th Edition)

Pennings, A.J. (2010, Jan 16) Remembering New York’s “Silicon Alley”. https://apennings.com/media-strategies/remembering-new-yorks-silicon-alley/

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Anthony J. Pennings, PhD is a professor at the Department of Technology and Society, State University of New York, Korea teaching broadband policy, engineering economics, and AI for sustainable development. From 2002-2012 he was on the faculty of New York University where he taught digital economics and information systems management. He also taught in the Digital MBA at St. Edwards University in Austin, Texas, where he lives when not in South Korea.

Category: creative cities, creative industries, digital geography, media strategies
Tags: AOL/Time Warner > Competitive Advantage > DoubleClick > economic analysis > iVillage > knowledge workers > mega-cities > NASDAQ > political economy of geography > Silicon Alley > Starmedia.com > The Rise of the Creative Class > Wall Street > World Trade Center

Meaningful Play and a Simulation of the Federal Reserve’s FOMC

Posted on | January 7, 2010 | No Comments

One of my projects last year was to write up the simulation I developed for a Macroeconomics class at New York University and present it at a conference on Teaching Economics. The simulation was designed for students to role-play the positions of the people at the Federal Reserve who make decisions on interest rates and the nation’s monetary policy. The 12 person Federal Open Market Committee (FOMC) – primarily the presidents of Federal Reserve banks – meets some 8 times a year. The decisions they make can move hundreds of billions of dollars in or out of the economy. This semester long simulation allows the students to take on those decisions, do relevant research, and finally meet, discuss, and make a decision on interest rates.

In Rules of Play: Game Design Fundamentals (2003), Salen and Zimmerman highlight the importance of significant interaction for developing a wide range of compelling games, simulations, and role-playing experiences. They argue that good games produce “meaningful play” for its participants and point to the relationship between actions they take and the resultant outcomes that result in successful game experiences. The concept of meaningful play, while evasive at times, provides a useful starting point for analyzing the effectiveness of the FOMC simulation.

While students often find the Federal Reserve simulation obscure at first, they generally come to find it an intriguing challenge. Keeping in mind Salen and Zimmerman’s emphasis on meaningful play, some of the best games are those that act out serious activities and what could be more significant than decisions that involve trillions of dollars and millions of jobs. The exercise runs over the course of the semester during which the actual FOMC meets several times, providing a source of timely feedback. While students do research on their respective demographic areas – New York, Boston, San Francisco and the other Federal Reserve districts, the highlight is probably the actual meeting where the students present on their districts, discuss the country’s economic conditions, and vote on monetary policy. They also write up a press release, keeping in mind its influence on financial markets. The exercise allows students to discover and decipher economic statistics, grasp the economic strengths and weaknesses of different parts of the US,  develop judgment related to economic markets and translate economic data into policy decisions.

To place it more within a educational context, I combined game theory with Bloom’s taxonomy. Bloom’s framework is not exactly the rocket science of educational research, but it is established. Combined we recognize that human learning can be seen to be both a set of integrated concerns a progression of challenges. In the former, Bloom’s model suggests three parts, or ‘overlapping domains’: the Cognitive – recall of information and basic intellectual skills; the Affective – patterns of attention, interest, interpersonal awareness, and the ability to take responsibility in interactions with others; and thirdly, the Psychomotor – physical skills that involve dexterity, speed, fine motor skills and other attributes that influence performance-oriented actions. For the latter, Bloom’s domain of affective provides additional insight into what constitutes “meaningful” play as Salen and Zimmerman argue that such a result has an emotional and psychological dimension. Meaning must strike a resonant chord.  It must have a measure of significance for the players. Bloom’s domain of psychomotor skills is useful in that it introduces a way to understand the role of action and emotion in the learning process.

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Anthony J. Pennings, PhD is the Professor of Global Media at Hannam University in South Korea. Previously, he taught at St. Edwards University in Austin, Texas and was on the faculty of New York University from 2002-2012. He also taught at Victoria University in Wellington, New Zealand and was a Fellow at the East-West Center in Hawaii in the 1990s.

Category: electric money, financial news, financial technology, meaningful play
Tags: Bloom's taxonomy > Federal Reserve > FOMC > games > meaningful play > play > role-playing > Rules of Play > Salen > simulation > Zimmerman

The Link Economy?

Posted on | January 4, 2010 | No Comments

Links are clickable words, numbers, graphics, or images that redirect a person to another webpage, website, or a specific file like a PDF or a YouTube video. They contain code that connects users to specific pages or other resources, thus the more official URL (Uniform Resource Locator). Link code contains the address of the desired resource, whether it is on the same website or another one located on a computer server in a different city or country. Links give the Internet extraordinary interactivity and fluidity, thus giving rise to the term web “surfing.”

As e-commerce continues to grow and become a dominant part of what Jeff Jarvis and others call the “link economy,” questions about its dynamics and how it operates are being raised.

One issue is the power of search engines and complications involved in getting specific links to show up high in the rankings for a particular search. The ultimate matchmaker, search engines connect the searcher with a search result. But whose results get listed first?

Another issue is the power of affiliation. Partnerships developed to refer businesses to each other through the power of linking. Affiliate marketing is not a new concept but one that works particularly well in a link environment.

As e-commerce continues to grow and become a dominant part of what Jeff Jarvis and others call the “link economy,” questions are being raised about its dynamics and how it operates.

One issue is the power of search engines and complications involved in getting specific links to show up high in the rankings for a particular search. The ultimate matchmaker, search engines connect the searcher with a search result. But whose results get listed first?

Another issue is the power of affiliation. Partnerships are developed to refer businesses to each other through the power of linking. Affiliation marketing is not a new concept but one that works particularly well in a link environment.

Yet another is syndication, making web feeds available that provide summaries and links to their content. RSS feeds aggregate selected content for readers but challenge publishers who offer an array of content. This aggregation has played havoc with the news industry, whose decision-makers see no choice but to allow others to link to their content.

What does the power of the link mean for the analysis of their economic impact? Part of it is as obvious as the growth of the Internet, but we haven’t yet seen the full deployment of link technology throughout global society.

Citation APA (7th Edition)

Pennings, A.J. (2010, Jan 4). The Link Economy? apennings.com https://apennings.com/digital-media-economics/the-link-economy/

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Anthony J. Pennings, PhD is a Professor at the State University of New York, Korea and a Research Professor at Stony Brook University in New York. Previously, he taught at St. Edwards University in Austin, Texas and was on the faculty of New York University from 2002-2012.

Category: digital media economics, social media
Tags: content > e-commerce > Internet > Jeff Jarvis > link economy > links > RSS feeds > search engine > syndication > URL > web affiliation > YouTube

Hello world!

Posted on | January 3, 2010 | No Comments

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!

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