In this particular edition, we’ll be looking at the Northeast region and seeing what this territory has to offer current and potential Aexus partners.
In the Northeast, the summers are warm, humid and wet. The winters are very cold and snowy; and it is partly cloudy all year round. Over the course of the year, the temperature typically varies from 26°C to 30°C. It is interesting to note that Rome and New York are on the same line of latitude yet experience wildly different temperatures over the summer and winter months.
If you ask people from outside the US about the Northeast region, the first thing they will say is New York. It’s true to say that it is an icon for business, for media and for entertainment. It is known around the world but to ignore the rest of the Northeast is a mistake not just from a cultural point of view but also for the opportunities that the region as a whole offers. The Northeast region is home to past presidents, has all eight Ivy League schools and Pennsylvania is where United States Constitution was written. Also, don’t forget that there are the biggest shows in the world on Broadway, some of the best American football teams in the country and of course, the Northeast region is where the capital Washington DC is located. Tech is big news here too. Most of the largest contenders are pretty obvious but there are a few surprises in there too. The surprises are always worth taking a closer look at because even though they have smaller economies they are growing and this normally means that their rate of growth is faster than that of established economies.
In fact, if we look at start-up funding for a moment, everyone says that investment has become static or even dropped slightly across the US for tech start-ups. While there may be some data to back that up, the numbers are still mightily impressive.
New York start-up OpenWeb got a cool $170 million in its latest funding round. To put that into perspective, their total funding since starting 7 years ago is $393 million, meaning this latest investment is larger than anything they’ve seen from their other six backers. Pittsburgh’s local start-ups are bucking the trend as well and although they have seen a drop, they are still doing better than last year. In Boston last summer, 5 companies collectively raised $1 billion although it is fair to say that half of that was raised by Longroad Energy. And, regardless of whatever your politics are, Washington DC is pulling in big numbers as well, with Class Technologies and Base Operations securing $105 million in extra capital last year.
Whatever the future holds in terms of the American economy, it can’t be denied that right now, there is no end of opportunity in the Northeast region.
So, whether you want to work in the Northeast, scale to the Northeast or actually build your own start up in the region, let’s take a look at some individual states in a little more detail.
New York is not only a booming city with a diverse economy but it also has a booming tech sector across all 5 boroughs. As you would expect, all the majors such as Google, Apple and Amazon to name just a few are there but there is also a thriving start-up scene and more unicorns than any other Northeast state. To give you an idea of the start-up scene in The Big Apple, a 2021 report published by Startup Genome, New York saw a total of US$ 10.2 billion in total early stage funding for start-ups. New York is an exciting city and people will want to come to work there. The downside to that though is the very expensive real estate and high cost of living which can put some people off.
Boston is one of America’s oldest cities but its economy and tech scene is much more dynamic than historic. In fact, Boston is the tech centre of New England and this makes it perfect for attracting entrepreneurs, investors and regional start-ups. Boston’s tech industry is certainly going in the right direction and it has become a big destination for many Software-as-a-Service (SaaS) companies, Boston is home to many enterprises that offer top-notch services, such as SEMRush and internet cybersecurity specialists Akamai. There’s also a thriving MedTech industry and the city actually hosts many MedTech conferences and events at the Boston Convention Centre. What’s more, with Harvard, one of the world’s most prestigious universities, turning out a new batch of graduates every year, employers are spoilt for choice. Although, it is worth bearing in mind that the cost of living in Boston is 48% higher than the national average.
Connecticut’s tech sector is growing steadily and is being supported by state sponsored incentives to bring companies in and drive investment. In fact, according to a NerdWallet study, two Connecticut cities, Bridgeport and New Haven made it onto a list of 50 of the most progressive and forward-thinking cities regarding their tech sectors. The facts would certainly seem to back this up with the technology sector having the likes of global digital media brands such as ESPN, technology start-ups coming out of Yale as well as a stream of the brightest and best students graduating every year. On top of this, there are a lot of businesses setting up to meet the increasing demand for Cybersecurity, Fintech, and Med Tech services making the future look very bright for Connecticut’s tech scene.
In Pennsylvania, two states score very highly for their tech scene, Philadelphia and Pittsburgh.
Taking Pittsburgh first, they are making huge strides in fields like robotics, cybersecurity, AI and more. On top of this, they benefit from institutions such as start-up accelerators, venture capital companies and great research facilities from Carnegie Mellon University and the University of Pittsburgh. All of these factors combine to create a strong start-up culture and community here. Pittsburgh also offers an attractive quality of life for employees with lots to do both culturally and socially. And lastly, set-up cost are extremely affordable with office rents costing considerably less than other states.
Philadelphia’s large talent pool, proximity to other major cities and business friendly climate make it an ideal start-up destination. Philadelphia is also resource rich for entrepreneurs with the Pennovaton Works, the University City Science Centre and Penn Centre for Innovation to name just three. That’s not all though. There are plenty of incubators, accelerators and coding bootcamps so no matter whether you’re starting or scaling, you’ll find everything you need in Philadelphia. Like its neighbour Pittsburgh, Philadelphia has a very attractive quality of life with a very reasonable cost of living.
Washington, D.C., the capital of the United States, has been an established destination for technology companies for years. Largely it has benefitted from its seat of power with the lure of government contracts bringing in technology companies from all over the country. Leaving that aside though, if you wanted to know about the draw the capital has on tech companies, just consider that Amazon, Apple, Microsoft, IBM and Oracle all have a presence there. Whether it’s a consequence or a coincidence, this dynamic market is one of the only cities in America with an average wage increase parallel to the boost in jobs in 2020, which was a rate of 10.5% and 10% respectively.
Conclusion
There is still a little way to go in our series on where would be best to scale to in the US but there are a lot of positives to take from this edition on The Northeast. You may have already had ideas about where you think your particular domain is best suited but with 1 more region still to look at, you may find something better in the last post. Until then, please feel free to leave your comments below and if you’d like to work with us directly to find your perfect route into the US, get in touch. We’re always more than happy to jump on a call.