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Startup firms are the life blood of all new jobs and much of any country’s economic growth. In the US, Silicon Valley is no longer the only place, (although still the #1 in most recent rankings) to fund, source talent, and develop your next best startup idea.

Below is a list of the world’s top ranked startup ecosystems. With more than half of the top 20 in the US and Canada, and several others in Europe, a new ranking of startup friendly cities developing in places such as Tel Aviv, Singapore, São Paulo, and Bangalore shows that the startup trend has promulgated into emerging economies worldwide.

Startup Cities

Source: CITYLAB

The graph above from the 2015 edition of the Startup Genome Project from Compass provides a new ranking for the world’s leading startup cities. The report is based on data from 11,000 global startup companies, interviews with more than 200 entrepreneurs worldwide, and data from Crunchbase and other sources. Its ranking gauges the world’s leading startup ecosystems—the broad infrastructure of talent, knowledge, entrepreneurs, venture capital, and companies that make up a startup community. The report measures these ecosystems based on:

  • their quality of talent,
  • pool of venture capital resources,
  • experience and mentorship provided by startup founders,
  • market reach of their companies, and
  • the ultimate performance and exit value of their companies.

Cities from China and many other Asian countries were omitted due to a shortage of available data.  With that being said, startup growth in Asia is thriving and if tracked would have performed well.

In a related article from FORBES, a few of the influencing factors and differences between startups in Asia and the western world were examined. Among these it is clear that Asian cities are just beginning to form their own startup ecosystems. Singapore, Hong Kong and Bangalore each have their own blossoming entrepreneur communities, however many young college graduates in the region prefer to work for large corporations, citing “startup life as being too risky”, as well as “not paying enough right off the bat”.  In places like Hong Kong, family pressure to earn a good wage and help support the family fosters a reluctance to join or create a startup. This may explain why Asia’s venture capital funding amounts are lower than Silicon Valley’s and the startup fever has yet to fully hit the region. (Source: CITYLAB)

As more cities become hubs for Startups, policies will shift to encourage this new growth. The business, entrepreneurial, and technological communities will remain the key startup drivers, creating the typical organic process of startup ecosystems. However, a recent report by the British innovation think tank Nesta outlines three key things governments can do to bolster such ecosystems: take a cross-disciplinary approach to champion innovation and entrepreneurship across functional areas and departments; work with other outside governments to identify, address, and solve key problems; and think like a startup, not a government agency. Governments both nationally and locally would be well advised to adapt and implement some of these policies when and where possible. (Source: CITYLAB)

While totally omitted from the COMPASS list, an excellent example of these types of policies in action is the 22@ district in Barcelona, Spain. 22@ Barcelona initiated in the year 2000, is in the central business district situated in the former industrial area of Poblenou. Once a highly productive industrial area that slipped into crisis, the aim for the 22@ Barcelona project is to convert the area into a technical and innovation district while maintaining the character of the old and creating a new urban feel and environment. Instead of tearing the old industrial area down and build new, the City Council decided to loosen up on the regulations in the area. This allowed private building owners the opportunity to build higher and invest more freely than before. IFHP 22@ has made many rethink what is possible in todays cities. The project has been hailed as a great success of urban redevelopment.

As of December 2011, an estimated 4,500 new companies had moved to the district since 2000, an average of 545 per year and 1.2 per day, although the most prolific era was from 2003 to 2006. Of the 4,500 companies, 47.3% were new start-ups. The rest moved from other locations. About 31% of companies in 22@ are technology- or knowledge-based companies. Watch for this new urban development ideology to spread and grow across the world as technological, paired with social needs continues to be more desirable.

The Citylab study sees New York, Toronto, Seattle, and Boston, as startup ecosystems nearing their financial equilibrium (that being their essential peak of expansion in their respective location). On the other hand, it cites Amsterdam, Paris, Chicago, and Berlin as up and coming ecosystems that have substantial room for growth and development. As more cities embrace and profit from the ever-growing reach of startups, we will see organic formation and development of startup ecosystems just like 22@Barcelona. The infusion of capital and people into these cities that startups are responsible for, will create continued highs and lows in the realm of success and failure, as well as supply and demand fluctuations within these cities with regard to urban housing and development. The big picture is that a shift towards startup friendly policies and development within cities around the globe is incredibly positive and inevitable.

Top image credit: korisbo


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About Author

A Maine native, and long time Colorado resident, Nicholas is currently pursuing his Masters of Science in Real Estate at University of San Diego.  With previous experience in outdoor/recreational management, residential property management, and extensive world travel he is interested in pursuing a career focused on land acquisitions, conservation, and sustainable development, complimenting his deep love and commitment to nature and outdoor pursuits.

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