Credit: Photograph by Darrow Montgomery

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When it comes to technology in D.C., Mayor Vince Gray likes to think big. Really big. His five-year economic development strategy, unveiled in November, calls for the city to be the “largest technology center on the East Coast” (with District-wide WiFi to boot). Can it be done?

Certainly, the city’s tech sector has made great strides in the past year. Led by iStrategyLabs’ Peter Corbett, whom one local Web developer called the “Don King of D.C. tech,” the scene has matured, cohered, and begun to view itself as a viable rival to Silicon Valley, New York, and Boston. Tech MeetUps abound; the big annual one led by Corbett packed the Warner Theatre this year, featured a week of workshops, and closed with a bang at a two-story, extra-dorky party at a former fashion store on H Street NE.

Exhibit A of the city’s tech success is LivingSocial. The daily deals company has established a major presence not only online, but also in the city’s streetscape, with numerous local offices and a host of public events at its 918 F Street venue. In July, Gray signed a $32.5 million tax incentive package for the company to keep its D.C. employees in town. His speeches on tech, including his Warner Theatre keynote, are filled with proud, applause-line shouts of “LivingSocial!”

But some cracks have appeared in the city’s tech facade. First, Gray’s proposal for a tax break for local angel investors who fund D.C. tech companies was rejected by the D.C. Council. Then pride-and-joy LivingSocial announced a round of layoffs, including 160 in D.C., that raise questions not only about the company’s stability, but also its ability even to qualify for the tax incentives, given the requirement that the company maintain at least 1,000 employees in the District.

But there are bright spots outside of LivingSocial. launched D.C.’s first tech accelerator this year on K Street NW. A bill signed by the mayor in November expanded previously location-specific benefits to all tech companies in the city and gave startups a tax abatement for five years from the time they become profitable. And the city’s narrowed down its candidates for a tech anchor on the soon-to-be-developed St. Elizabeths East Campus to three companies, including Microsoft, which proposed building its first American “innovation center” there. D.C. might not be the East Coast’s tech leader in the next few years, but city leaders are making a big bet on tech, and so far it looks like it might be paying off.