How Artists and Entrepreneurs are Driving an Upstate Renaissance
In our last post, we noted the upswell of venture capital investments in Midwestern cities, auguring a potential new wave of tech hubs. Let’s now head eastward along the Rust Belt to investigate some similarly eye-popping trends in upstate New York…
To many New Yorkers, the term “upstate” denotes a stretch of sleepy towns and small cities hugging the banks of the Hudson River, veering no farther west than the Catskills and petering out somewhere around Albany.
To residents of the Finger Lakes, conversely, upstate New York doesn’t even begin until Albany, while woodsy retreats like Woodstock and Saugerties are decisively downstate.
What no New Yorker can dispute is the fact that the upper half of the state is undergoing a dramatic transformation. Recent reports by InvestNY and Center for an Urban Future reflect an upsurge in venture capital funding in the region coupled with the precipitous migration of artists to the area over the last decade.
Even before the pandemic, knowledge workers and creatives were ditching the city in droves, seeking out lower rents, de-stressed lifestyles, and the sort of blissful rusticity that spawned the Hudson River School in the nineteenth century. Big Tech has been a key catalyst in this picture, even more so than Covid-19. In this rough period, between 2010 and 2021, NYC’s tech sector added more than 100,000 jobs, outpacing the city’s overall job growth by a factor of seven.
Long regarded as a distant second to Silicon Valley, NYC has come of age and is frequently celebrated as a tech hub that drives growth and business. Downstate, the city is home to more than 25,000 startups, along with hundreds of venture capital firms, incubators, and accelerators. As of May 2023, NYC had surpassed San Francisco as our nation’s No. 1 homebase for early-stage startups.
NYC’s ongoing technification seems unlikely to subside. With it, the exodus of artists upstate will continue as a ripple effect. As much as techies seem to chase artists out of town, it is equally true that artists lure those same techies into town, by dint of being irresistibly hip. Granted, the cat-and-mouse game between these two camps is complicated by the fact that many self-styled artists work in tech, meaning these dynamics play out not only interpersonally but intrapersonally as well.
Where the arts go, tech follows. This is true on both the micro and macro levels: the CUF whitepaper notes that the refurbished marquee of the Landmark Theatre in downtown Syracuse enchanted a troupe of Micron execs when they toured the city in 2022. So much so, in fact, that they greenlit a $100 billion investment in a suburb 20 minutes north of town.
Syracuse has one of the most appealing housing markets in the nation, although affordability can repel homebuyers as much as it might initially entice them. In order for a post-industrial city like it to attract a tech giant like Micron, for instance, the place has to feel as though it is right on the cusp of escaping the doldrums for good. Because Syracuse is on that cusp and stands out as a destination apt to attract (and retain) talent long-term.
Micron’s semiconductor mega fabs are expected to bring upwards of 10,000 sorely needed manufacturing jobs to the region, which saw a 6.3 percent decrease in such jobs in the period between 2009 and 2019. Will neighboring cities charm their way into similarly seismic investments?
In spite of at least one public, local plea to “keep Buffalo a Secret,” Toronto’s southern neighbor may also not stay that way for long. Borough-dwellers and out-of-staters are taking note, as the region’s burgeoning tourism rates attest. Even the bone-chilling lake effect may prove powerless to deter them. Rochester, home to a premier technical university – RIT – that balances its STEM focus with a slew of arts and design courses, fits the bill too: in addition to a blooming arts scene, Rochester is known as the hometown of both Kodak and Xerox.
Venture funding is likewise on the rise upstate. Although overall deal activity is down, over $211 million in venture capital was invested in the region this year, three quarters of which was invested at the seed and angel stages.1 The three startups that raised the largest single rounds this year were Node, based in Albany (which raised $12m); urbanXtracts in Warwick (which raised $7.1m); and Brami, in Clarkstown (which raised $6.5m). Their deal sizes suggest companies no longer even need to cluster around larger cities to secure financing, a harbinger of what seed activity is likely to look and feel like in underserved markets in years to come.
The surge in VC deals has been matched by an uptick in activity at local incubators and accelerators like Buffalo-based 43North and Syracuse-based Genius NY. Given the region’s dense clusters of universities — which include RIT, Cornell, and Syracuse — incubators are brimming with founders who pitch new ideas in local contests. As such, it’s impossible to ignore the crackle of innovation and artistry that heralds a broader economic rebound.
We’re staunch believers in the region’s potential to attain and realize new opportunities and contribute to the state’s prosperity. Furthermore, we reject the notion that tech and the arts exist in opposition to one another, and foresee a future in which both camps work in tandem. After weathering decades of lost jobs, lost population, and lost opportunities for investment, upstate is primed for a wider economic rebound. So far, the artistic community has served as bellwether. Here’s hoping tech follows.