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There’s always been intense competition to become the next Silicon Valley.

After all, the original is not much more than a collection of towns in northern California that just happen to be dedicated almost exclusively to the pursuit of information technology. The entire local infrastructure essentially supports this practice, and it draws the bulk of investment and other kind of resource. However, it’s not as if there’s some geographic underpinning to this hub of innovation. Many other industries, from energy to retail, require other natural assets; new technology doesn’t.

So if that’s the case, why can’t the model be replicated elsewhere? And with certain industries, aren’t other places eminently more suited to don this mantle? For example, should technology developed for financial services come more from the other side of the country, as in, the hometown of Wall Street?

This old question is gaining new traction thanks to a report from consulting giant Accenture and the Partnership for New York City, a powerful group of CEOs from 200 corporations headquartered in the Big Apple but with global reach. The organization exists specifically to invest in development projects throughout the city, and otherwise boost the area’s visibility.

The new report, which came out late in June, identifies significant opportunities in New York for the ‘fintech’ sector. In fact, deals in this market have been coming thick and fast—the venture sector focused on this area has been growing at twice the rate of Silicon Valley since 2008, and the trend continues to accelerate.

To be sure, Silicon Valley still draws more investment in fintech that its East Coast equivalent, but the gap is unquestionably shrinking.  The report notes that New York went from a third as many deals as Silicon Valley in 2011 to two-thirds as many in 2013 and almost the same in the first quarter of this year. The numbers matter in part because this is a big market: fintech investment tripled between 2008 and 2013 from $928 million to $2.97 billion, and should double again within the next four years.

Actually, the story behind the numbers is even more interesting. Think of what characterizes Silicon Valley as more than just a geographic entity. It’s a hub of global innovation. It displays small business entrepreneurship at its finest. Most new ventures exist independently of the government, not seeking nor receiving subsidies or other kinds of assistance. Indeed, the industry serves as a poster child for the free market in that, unlike most other verticals, the products regularly get better, faster and cheaper. But in reality, there’s even more to it.

First, the technology industry in Silicon Valley was the first to realize the game-changer that is Big Data. Jargon aside, this staggering wealth of information gives every entity the tools and opportunity to drill down into each demographic more than ever before. There are now hundreds of pieces of data available on each individual, and that feeds new kinds of marketing. On the flip side, the next generation—and every generation after it—will respond only to increasingly personalized appeals. That started with technology and now affects every industry.

Similarly, good technologies succeed not by anticipating needs and changes but by causing them. Some 10 or 15 years ago, no one was clamoring for mobile capabilities—whoever thought we could do more with the phone than just talk? Today, the millions of smartphone and tablet apps have drastically transformed consumer and professional habits.

That’s the kind of mindset that true competitors to Silicon Valley will have to emulate. Those areas that have successfully created technology hubs of their own—Research Triangle Park in North Carolina; wide swaths of Austin, Texas; Route 128 in Massachusetts; New York’s own Silicon Alley, among many others—have imported this kind of forward thinking more than a given set of best practices. And while they’ve grown, so has Silicon Valley.

So sure, there may be more fintech investment in New York, but that doesn’t mean it will be at the expense of Silicon Valley. It looks like the fintech market is set to keep growing, and as it does let’s hope New York gets more, Silicon Valley gets more, and other hubs emerge as well. This way everybody wins. . .especially the user.


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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp

Neill Harris

Neill Harris is product marketing director for ATM solutions at NCR. He travels extensively to many of the world's leading banks and financial institutions, articulating how self-service technology and innovation can inform and support strategies and solve challenges.