New York City — The Big Apple, Gotham, the City that Never Sleeps, Empire City. Whatever you want to call it, there’s no denying that New York is one of the most important cities in the Western world. Not only is it an iconic destination, it’s also a cultural hub and an economic powerhouse.
What is it about New York that makes it such an attractive destination for businesses? The obvious factors are that it is the largest city in the United States and that it is conveniently located on the East Coast, which provides easy access to Washington DC and Europe. However, there are more interesting reasons.
Let’s examine a few of them:
Financial Center
One of the most straightforward reasons why New York is a major economy that attracts new businesses is that it is one of the world’s financial centers. The New York Stock Exchange and NASDAQ — the world’s two largest stock exchanges — are both located in the Wall Street financial district of New York.
Any entrepreneur interested in starting a financial business has to understand that New York is the best place in America to be located. Whether it’s a venture capital firm, an independent trading provider, insurance company or brokerage, being based in New York means being in the heart of American finance.
Tourism
New York is one of the world’s top tourist destinations. It has museums, theaters, libraries and restaurants that bring visitors in, as well as parks, architectural landmarks and neighborhoods that all draw in tourists every year.
Tourists spent nearly $75bn in New York in 2019. Tourists are, to put it in the simplest terms, big business. There are so many industries that tourists touch, it isn’t just the hotels, restaurants and attractions that benefit. Other industries that serve tourists include transportation, currency exchanges, mobile services such as translation apps and trip planners, and many others.
One of the other reasons that businesses that serve tourists are drawn to New York is that unlike many destinations it is popular year-round. The beaches and mountains can only attract people when the weather is right, while the Big Apple has something to offer the whole year. This makes it much safer for businesses because they don’t have to weather the harsh months of the off-season like their competitors in other locales do.
Gambling Legislation
Online sports betting is one of the biggest and fastest growing gambling industries in the world. It is immensely popular in the United Kingdom, Australia, China, India and elsewhere around the world. With the overturning of the Professional and Amateur Sports Protection Act (PASPA) in 2018, the US is finally getting on board with sports betting and the industry is about to boom.
New York is one of the latest states to legalize online sports betting. In doing so, they have made themselves even more attractive to businesses related to the industry. If there were any doubts that online sports betting would be lucrative, the last month has definitively erased them. In the first five weeks since legalization, $2.4bn in wagers have been put down in New York. $500m of that was placed the week of the Super Bowl alone.
This very, very lucrative debut has guaranteed that more new businesses will be drawn to New York. Only a handful of sportsbooks have been granted licenses under the new laws, but that still leaves plenty of room for fantasy sports apps, odds and betting guides, data analysts and many others. There is money to be made in the online sports betting industry and New York looks like the place to make it.
Reputation
One of the more emotive reasons that New York is able to consistently attract new businesses is the boost it provides to the company’s reputation. Much like how tech companies benefit from being associated with Silicon Valley, many other industries benefit from being based in New York.
A publishing house or fashion brand based in Cleveland, Ohio for example, is going to have lower operating costs, but they will also be isolated from the networking opportunities New York provides, and their location could raise doubts among potential clients or investors about the viability of the business.
Being based in New York may initially be more expensive for a new business than being based elsewhere in America. However, the benefits from a practical, financial and reputational standpoint far outweigh the costs.