Startup Cities Around the World - The Top 10

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October 21, 2016 by Shai Aharony • SEO Guru; prodding Google’s algorithms just for fun.

Even though Silicon Valley remains the unrivalled leader in the international startup scene when it comes to most parameters, a growing number of both investors and entrepreneurs alike are being attracted to other startup hotspots around the world. We have therefore decided to take a closer look at some of currently the hottest startup ecosystems in the Americas, Europe and Asia. We analysed the available data on their value, venture capital, growth rate, talent pool, infrastructure and other key factors that indicate the ecosystem’s performance and potential, hoping to make it easier on entrepreneurs to choose their startup destination and help investors make the most of their money.

1. Silicon Valley

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Workforce/Talent Pool: Silicon Valley and its immediate surroundings are home to an estimated 2 million high-tech workers, while the area’s world-wide reputation as the global high-tech leader also makes it attractive to skilled workforce from both the Unites States and abroad.

Government Incentives/Initiatives: In addition to financially supporting local universities, research and development, and modern infrastructure that helped build Silicon Valley as the world’s leading startup ecosystem, the U.S. government also helps the area thrive through business-friendly legislation and policies facilitating creation of companies, protection of intellectual property, export and import of products and services, capital investments, etc.

Infrastructure: The area offers superior infrastructure in terms of transportation, telecommunications, production facilities and other elementary systems and services including easy access to the market both in the United States and internationally.

Notable Companies: Apple, Adobe Systems, Google, Intel, Oracle, Tesla Motors, Facebook, Visa, eBay, Cisco Systems, HP

2. Beijing

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Workforce/Talent Pool: Beijing is home to more than 21 million people and some of the best universities in the country. Many are conveniently close to the city’s technology hub of Zhongguancun, facilitating the recruitment of qualified and educated labour force.

Government Incentives: In addition to supporting startups with tax incentives, funding research and development, and providing various administrative grants, Beijing city authorities also provide direct funding which can reach up to $100,000 per startup. In addition, the central government has recently announced to support the Beijing startup ecosystem with a fund of $6.5bn.

Infrastructure: Beijing is the country’s economic, cultural and political centre with highly developed infrastructure including highly efficient transport network providing easy access to raw materials and services, and facilitating import and export of products and services.

Notable Companies: Lenovo, JD.com, Kingsoft, Dangdang, Fingertech, Founder Group, Hoolai Games, Hylink Digital Solutions

3. New York City

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Workforce/Talent Pool: Startups in New York City enjoy access to highly educated and diverse workforce which includes about half a million high-tech workers.

Government Incentives: With an aim to attract more entrepreneurs and investors, the New York State offers a range of incentives and tax credits. For example, START-UP NY offers up to 10 years of tax-free operation to businesses opening or relocating on or near particular universities/colleges.

Infrastructure: New and existing businesses in New York City enjoy easy access to telecommunications, clean energy, modern office space and other key infrastructure as well as both local and global markets which can be reached via land, air and sea.

Notable Companies: Shutterstock, American Express, Tumb1r, Atari, DoubleCLick, Etsy, Monster Worldwide, Citigroup, Time, NBC, Viacom

4. London

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Workforce/Talent Pool: London-based entrepreneurs have access to one of Europe’s largest workforce and a highly diverse talent pool in terms of qualifications, skills, experience and ideas.

Government Incentives: The government offers strong support to entrepreneurship including startup companies through both business-friendly policies and various incentives. These include low corporate tax rate, free support in relocating to the UK, mentoring programmes, etc. including direct funding.

Infrastructure: London is the cultural, financial and business capital of Europe and a major transport hub offering easy access to both the UK and European markets as well as the international market.

Notable Companies: Shazam, StatPro Group, Diploma, CronLab, Powa Technologies, Datamonitor, Cheapflights, GoCardless

5. Berlin

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Workforce/Talent Pool: With foreign workers accounting nearly one half of the total labour force, Berlin’s talent pool is second only to London when it comes to diversity. The German capital is also one of the most popular student cities which means that there is easy access to educated labour.

Government Incentives: The German government is encouraging startups and companies to relocate to Berlin with different tax incentives, public funding, tax credits for investors, etc. with more incentives for both entrepreneurs and investors currently awaiting to pass the legislative proceedings.

Infrastructure: Berlin is the Continent’s centre of culture, business, finance and science. Besides highly developed and effective transport network, the city also boasts highly diverse facilities ranging from modern office space and technologically superior production facilities to a multitude of convention centres for various purposes.

Notable Companies: SoundCloud, Balcklane, Foodora, EyeEm, 6Wunderkinder, Directed Edge, GetYourGuide

6. Tel Aviv

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Workforce/Talent Pool: Tel Aviv has an excellent talent pool consisting of a highly qualified workforce with experience and education in tech-related fields. Also, high immigration rates mean there is a diversity of ideas, experience and creativity.

Government Incentives: Both the government and city authorities are quite generous to startup companies in Tel Aviv, providing support in the form of different incentives, both tax and legal.

Infrastructure: The Israeli capital is a modern city with high-end infrastructure and outstanding links to national and international markets through its extensive transport network. The latter includes superior highways, rail and international airport, which is just 12 miles southeast of the city centre.

Notable Companies: Fiverr, Optimove, PrimeSense, IronSource, MyHeritage, Sisense, Webydo, Wix, Zerto

7. Bangalore

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Workforce/Talent Pool: The capital of the state of Karnataka is the headquarters of a number of high quality research institutes and universities. These provide a continuous supply of highly educated and English-speaking tech workers at the fraction of the cost of their Western counterparts.

Government Incentives: Both foreign and domestic startup founders can apply for different government incentives including direct funding which, however, currently can’t compete with the extent of financial support that is provided to entrepreneurs in other top startup ecosystems.

Infrastructure: The city is developing at a rapid pace also thanks to its rise as the global startup hotspot. But there are still many challenges, especially in transport infrastructure.

Notable Companies: Flipkart, InMobi, Aujas Networks, OnMobile, Wipro, KineticGlue, iRunway, BA Systems

8. Singapore

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Workforce/Talent Pool: Next to the existing talent pool, Singapore also has a steady inflow of new talent. However, high demand for software engineers makes it challenging for new startups to recruit the best engineers.

Government Incentives: The Singapore’s government adopted extremely favourable policies and programmes for tech startups which can compete for many types of funding schemes. Examples include tax incentives, equity investment and direct funding. New startups can also receive up to $2 million through the so-called Technopreneurship Investment Fund.

Infrastructure: Well developed infrastructure combined with the city-state’s strategic position and traditionally good connections with the largest Asian markets offer Singapore startups easy access to both investors and consumers.

Notable Companies: Grab (the former GrabTaxi), Lazada, Capillary Technologies, Dignify, Wego

9. Moscow

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Workforce/Talent Pool: Moscow startups can count on easy access to a talent pool of highly skilled and qualified labour force with excellent education in tech related fields, which makes the Russian capital one of the best places in the world to launch a tech startup. Software engineers from Moscow universities are widely considered to be among the best at the global scale.

Government Incentives: The Russian government offers various tax incentives and grants but it also offers direct funding and support to startups in attracting investment, marketing, innovation, etc. Startups opening in the Skolkovo zone may also be eligible for up to 7 years of tax breaks.

Infrastructure: Moscow is the leading high-tech destination in Eastern Europe with all the necessary infrastructure including fast and highly efficient transport links providing easy access to both Europe and Asian markets.

Notable Companies: Vizerra, Darberry, ZeptoLab, Talkbits, KupiVIP, VisibleNation

10. Santiago

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Workforce/Talent Pool: In addition to having highly skilled and educated workforce, the cost of hiring high-tech workers and engineers in Santiago is much lower than in most other startup hotspots, especially those in Europe and the United States.

Government Incentives: The Chilean government has been putting a lot of effort into attracting startups to the country’s capital. Besides low corporate tax rate, entrepreneurs starting a business in Santiago may also be eligible for $40,000 equity free funding, office space, mentoring programme and one-year visa (temporary).

Infrastructure: Santiago is one of the most developed cities in South America in terms of transport network and other essential infrastructure systems including telecommunications.

Notable Companies: Aventones, Hoope, Austral3D, Teamscope, Agent Piggy, Uniplaces

Sources:

Our analysis is based on the data from Rise of the Global Startup City, Global Metro Monitor, The Global Startup Ecosystem Ranging 2015, Cushman & Wakefield’s Office Space Across the World, Business Insider and official/governmental sources of the respective countries.

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