Across the city there is a myth that big businesses and young, innovative companies are at odds. In news outlets and on social media we constantly hear about the disruptors versus the traditionalists, the big crowding out the small, and the rising stars toppling industry stalwarts. In reality, startups and incumbent institutions are much closer aligned than is perceived, and have experiences, opportunities and ideas that, when working in collaboration, can create a more profitable and innovative environment for all.
At the Partnership Fund for New York City, the investment arm of the Partnership for New York City, the city’s leading business organization, I get to see the power of this collaboration in action every day. To date, the Partnership Fund has made over $135 million in investments with an eye toward creating jobs, spurring new business creation and expanding opportunities for all of the city’s residents and neighborhoods.
We currently run two successful accelerator programs – the FinTech Innovation Lab and the NY Digital Health Accelerator – to help foster the growth of new industries in New York City. These programs clearly demonstrate how the city’s startups and major employers are able to come together in a way that enhances everyone’s bottom line, including New York’s.
The FinTech Innovation Lab supports growth-stage companies developing cutting-edge technologies in the financial services sector. Participants are paired with leading financial services firms who provide support, product feedback and testing, and in return are able to see first-hand the up-and-coming ideas in fintech. CBInsights was in the inaugural class of the FinTech Innovation Lab! Greater collaboration has seen fintech investment increase by 32% from 2013-14 in New York State, and our 31 graduates have raised nearly $300 million in post-program funding. Similar programs are now being replicated in London, Hong Kong, and Dublin by our partner Accenture.
We have seen similar results from our NY Digital Health Accelerator, through which we are strengthening New York’s position as a vital hub for digital health technology by offering participating growth-stage companies unique exposure to top healthcare executives and venture capitalists. In total, twenty-one companies have gone through the program. Together they have raised nearly $230 million since leaving the program and have created over 160 jobs in just three years.
The success of these two programs, and the companies that have gone through them, shows that the future of New York’s economy can be strong if we think strategically about how to grow new, innovative industries. At the Partnership Fund, we saw an opportunity to make New York a center for fintech – New York City is the world’s financial capital and the banks that are based here are the ultimate customer or partner of many of the emerging fintech companies – and we decided to invest time and resources into making it happen here.
This is exactly the type of strategic approach for growing the city’s innovation economy being recommended by a new group within the Partnership for New York City, the Partnership’s Innovation Council. The Innovation Council, which is comprised of executives from top companies throughout the city, including General Electric, IBM and IAC, is preparing a report on how New York should be capitalizing on its unique assets to create a more innovative economy. The group’s preliminary research, conducted in conjunction with Doblin, Deloitte’s innovation consultancy, found that the sheer number of industries in New York makes it hard to focus on just one as a potential area for growth, but it also means that there are many industries that are ripe for new, innovative companies to sprout up and both challenge and collaborate with the more established leaders.
The financial services industry has been fairly successful recognizing that fintech startups are not enemies; they are potential partners, vendors, clients and acquisition targets. And New York has benefited from innovation resulting from the cross-pollination of industries. For example, the intersection of fashion, healthcare and technology has resulted in an influx of wearables technology hitting the market. There is huge potential here and we hope to see other industries look for opportunities to collaborate in order to innovate.
New York City has always been described as a melting pot. With so many established industries, and a renewed focus on attracting innovative companies, one day its innovation ecosystem will be described that way as well. As we have seen from our work in fintech and digital health, the more of an emphasis we place on collaboration, the better it will be for startups, large companies, and the city as a whole.
Watch the Future of Fintech panel discussion about How Startups Can Partner With Financial Services Firms featuring Maria Gotsch, Karl Abbott (Scotiabank), Jaidev Shergill (Capital One Ventures), and Luis Valdich (Citi Ventures):