The next start-up cities that will transform the global economy

cities

(Adrian Schwarz, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Marc Penzel, Founder and COO, Startup Genome


During the past decade, much of the discussion about start-up ecosystems has been centered on the question of which city or region will become “the next Silicon Valley”. Although there are several places with promising growth trajectories, we frankly think this view is short-sided. It implies there needs to be a new champion overshadowing the old one.

In fact, there will be no “next Silicon Valley”. Instead, new research from Start-up Genome’s 2019 Global Start-up Ecosystem Report (GSER) points to there being 30 “next” hubs that will reach critical mass and reshape the state of the global economy. While none of them will be as big as Silicon Valley in the foreseeable future, each will thrive due to either regional dominance or start-up sub-sector leadership.

Now, it’s not obvious which ecosystems will end up as the global change agents we predict, but we have some big clues. The first place we should look to determine the next hotspots is at present start-up ecosystem rankings. We rank 150 leading start-up ecosystems each year, incorporating data on more than a million companies globally. The newest list shows Silicon Valley is at the top, but following it are New York City, London, Beijing, Boston, Tel Aviv, Los Angeles, Shanghai, Paris and Berlin.

These 10 globally leading hubs have built a strong reputation for having plentiful start-ups and small businesses. New York City, for example, owns the number two slot for start-up ecosystems in part because it has more than 9,000 start-ups, numerous unicorns and high global connectedness (a measure of how much founders are connected with other top global ecosystems). Alternately, Beijing has been steadily moving up the ecosystem ranks in part to being home to more than 1,000 AI companies, which is one of the four fastest-growing startup sub-sectors globally.

While the 10 ecosystems outlined above are some of the more obvious leaders in the global start-up revolution, it’s worth looking at the fastest growing hubs beyond them. Start-up Genome dubs these “Challenger Ecosystems” and 12 such ecosystems are identified, in alphabetical order:

Greater Helsinki, Finland

Hangzhou, China

Jakarta, Indonesia

Lagos, Nigeria

Melbourne, Australia

Montreal, Canada

Moscow, Russia

Mumbai, India

São Paulo, Brazil

Seoul, South Korea

Shenzhen, China

Tokyo, Japan

Among this list, we can easily point to Lagos as a top contestant for regional leadership in the African continent. Given the wider economic context and the current momentum, several indicators point to the fact that even a spot in the global top 10 is not out of reach. Indicators include that it is the largest city in Africa and one of the fastest growing cities in the world, it has the largest tech hub in Africa, global titans like Google and Facebook have invested there, and young entrepreneurs there are on the cutting edge when it comes to running mobile-first businesses.

When it comes to specific start-up sub-sector leadership, we see Montreal emerge as one of the global hotspots for artificial intelligence (AI) start-ups. Since 2016, more than $1 billion has been invested in AI companies located there (including notable startup Element AI), and it has the largest concentration of AI academic researchers in the world. Montreal also hosts the NeurIPS conference, the largest AI event held annually in the world.

Other “Challenger” ecosystems on our list have not created such a strong brand, or ecosystem identity, for themselves yet. But that is changing rapidly, partly due to aggressive government investment. In Asia-Pacific, for example, Seoul Metropolitan Government stands out with a recent pledge of $1.6 billion in funding for start-ups by 2022. South Korea is also notable for its R&D spending-to-GDP ratio, which is the highest in the world at 4.55%.

The global start-up community is now the top engine of job creation and economic growth in the world, not only in Silicon Valley. The next hubs, partly predicted above, will be where the bulk of that growth is occurring and they are where the global economy will be remade, especially in the areas of advanced manufacturing, agricultural tech, AI and blockchain.

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Threats from mammoth banks and Brussels fuel May’s poll rates

At Arab League Summit, Guterres reaffirms strong link between UN and people of Arab world

Historic first, as Tolstoy’s War and Peace lands in Geneva, to mark international centenary

Do not take the EP’s consent on MFF for granted, says Budget Committee Chair

‘Never give up’: UN chief urges all who serve, marking UN Day

At UN, Yemen Foreign Minister demands end to ‘Iranian-Houthi coup d’etat’

Some Prevailing Arguments and Perceptions over the South China Sea Issue Are Simply Wrong

It’s time to disrupt Human Resources if we want talent fit for the digital age

Parliament approves key directive regulating professional qualifications

Sea urchins are overwhelming parts of the ocean. Could turning them into sushi be the solution?

Can collective action cure what’s ailing our food systems?

World ‘not yet on track’ to ensure children a better future: UN rights chief

3 megatrends for the factories of the future

Promoting rule of law and fundamental rights in the EU

Parliament commemorates the victims of the Holocaust

Three ways to improve your corporate culture in the #MeToo era

Why South Africa is on a path of economic renewal

How civil society can adapt to the Fourth Industrial Revolution

So, what is your favourite Sustainable Development Goal?

Quality education an ‘essential pillar’ of a better future, says UN chief

A Sting Exclusive: “One year on from the VW scandal and EU consumers are still in the dark”, BEUC’s Head highlights from Brussels

Here’s how India became a global clean energy powerhouse

UN chief encourages victims of terrorism to ‘raise up their voices’

MEPs back plans to promote water reuse for agricultural irrigation

Nearly 180,000 displaced by northeast Syria fighting as needs multiply: UN refugee agency

Report on EU trade defence – effective protection against unfair trade

Night owls, rest easy

Remarks by H.E. Ambassador Zhang Ming At the Reception in Celebration of the 70th Anniversary of the Founding of the People’s Republic of China

New labour laws in Qatar benefiting migrant workers a ‘momentous step forward’: ILO

Disease slashing global meat output, cereals boom, bananas under watch: FAO

The future of energy is being shaped in Asia

Theresa May expresses her optimism about Britain’s economic success while UK business outlook seems ominous

An FTA between EU-US to hurt South Korea

Heart attacks and strokes are more common on high pollution days, data shows

Artificial intelligence: EU must ensure a fair and safe use for consumers

Lack of involvement, or lack of opportunities?

Banks and businesses must step up and work together to fight climate change

What can stop the ‘too big to fail’ bankers from terrorising the world?

Boris as UK Premier to be cornered if attempting a no-deal Brexit

COVID-19 will accelerate the revolution in energy systems

Residents and visitors to this Dutch neighborhood could share a pool of cars and bikes

American women are 50% more likely to die in childbirth than their mothers

5 facts you should know about the world’s refugees

The Fourth Industrial Revolution is redefining the economy as we know it

The role of employers in the post #MeToo era

EU-Singapore trade agreement enters into force

Better Regulation principles: at the heart of the EU’s decision-making process

Economy and living standards of Gaza ‘eviscerated’ by crippling blockade – UN trade and development report

Can Kiev make face to mounting economic problems and social unrest?

UN chief ‘commends’ leadership of Greece and former Yugoslav Republic of Macedonia, as name dispute draws to final close

Switzerland has the most highly skilled workers in the world. This is why

Violence on the rise in Darfur following Sudan military takeover, but UN-AU peacekeeping mission maintains ‘robust posture’

Brexit: No deal without marginalizing the hard Tory Eurosceptic MPs

Restoring government control across Central African Republic is ‘key’ to lasting peace, stability – UN envoy

Commission Work Programme 2019: Delivering on promises and preparing for the future

UN sees progress in fight against tobacco, warns more action needed to help people quit deadly product

The Schengen area is at a crossroads

Mergers: Commission approves acquisition of L3 Technologies by Harris Corporation, subject to conditions

We must help developing countries escape commodity dependence

How blockchain can manage the future electricity grid

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s