It is true that engineering skills are utilized in the economy mostly in the realm of manufacturing. I will also posit that manufacturing industries in the U.S. will eventually resemble those of Switzerland: specialized in making high-quality, niche products. This future situation will still require highly trained engineers, just fewer of them.
A statistic from early last decade stated that China graduated 300,000 engineers a year, while the U.S. graduated just 60,000/year. We still have higher quality engineering education than China, but manufacturing commoditized products doesn't require the best-trained engineers. Hence the world will converge to the following situation: the developed world will manufacture specialized products, the developing world will manufacture commodity products.
With respect to the New York initiative: building a startup/VC culture takes decades. San Francisco has Stanford, Boston has MIT. These two startup centers flourished under the postwar investment boom during the Cold War. This gave these two cities a huge head start relative to other locations in the U.S., and to this day they account for the lion's share of VC investment in the U.S.
The established character of a city also plays a huge role. San Francisco will be a semiconductor/computer/software hub for the foreseeable future. Boston is more a center for hard science-based startups. Looking at a city like Atlanta, which is a consumer products hub, and evaluating its startup community, it has a tough time incubating technology startups. I have spoken to several central figures in the VC and startup community in Atlanta, and they anticipate still several decades of hard work before they can even compete with places like San Francisco or Boston.
All told, New York, being a finance and marketing hub, will have a long road ahead of it.
