While San Francisco is the undisputed power source of the global tech scene, there are bright sparks and live wires in a host of rising tech hubs. There are ten cities cracking the code.
How can you spot the world’s next Silicon Valley? According to Megan Walters, head of Asia-Pacific research at property-investment firm JLL, look for inspirational education, a young and eager workforce, interesting jobs and visionary investors. Here are ten cities that are already threatening California’s high-tech dominance.
Poised to topple London as Europe’s top tech city, Berlin offers cheap rents, a highly educated (and English-speaking) workforce and an extremely start-up-friendly culture. In addition, Germany’s solid manufacturing tradition means the city is also becoming the go-to place for “deep tech” (technological prototyping) and engineering innovation. Companies like Dubsmash, ElektroCouture and Splash are already making big waves in the social, wearables and virtual-reality worlds.
2 Tel Aviv
Israel has long been known as the Start-up Nation, with many Israelis developing advanced software skills and a knack for small-team cooperation during compulsory military service. Until recently, most Tel Aviv start-ups have had an eye on being bought by US companies and emigrating to California, but now things are changing and the city is producing Israeli companies that stay in Israel. Check out StoreDot, which produces ultra-fast-charging batteries, and an explosion of companies in the world of cybersecurity.
A new (and unexpected) kid on the block, Lisbon’s start-up sector has benefited from massive government and EU support. Named as European Entrepreneurial Region of the Year in 2015, the city is home to hundreds of young companies, many graduates of the city’s world-renowned Beta-i incubator. Uniplaces is fast expanding as a kind of Airbnb for students. TalkDesk lets companies set up a virtual call centre in minutes.
The tech world loves “unicorns” – start-ups that are valued at more than $1 billion – and Stockholm has produced more unicorns per capita than anywhere except Silicon Valley itself. The city is the spawning ground of global brands such as Skype, Spotify, Minecraft and Candy Crush Saga, and is home to more than 25,000 start-ups, despite a population of just 900,000. “Start-ups go global from day one,” Pär Hedberg, founder of Stockholm-based incubator STING, recently told Wired magazine. Check out Glue, Detectify and Acast among the next round of Swedish wannabe world-beaters.
The Kenyan capital, dubbed Silicon Savannah, is already home to one of the highest concentrations of dollar millionaires in East Africa. Riding on the huge success of M-Pesa, Vodafone’s mobile-payment technology, which is based in the city, Nairobi has benefited from an innovation-minded national government and a cluster of incubators that are punching well above their weight. Nairobi’s start-ups bring global expertise to local issues such as agriculture, health and transport. WeFarm, for example, gives small farmers information and support over their mobile phones.
Silicon Valley may still lead the world in software and internet start-ups but, for many, the future is biotech, and in that field Boston is pushing hard to take the number-one slot. Long a byword for cutting-edge biomedical research, thanks to MIT, Harvard and a decades-old Big Pharma presence, Boston is now home to dozens of biotech start-ups that, so far, have attracted more than $14 billion in venture-capital investments. Many Boston start-ups, including Editas Medicine, CRISPR Therapeutics and Intellia, are involved in gene editing, easily the hottest topic in biomedical innovation at the moment. Boston’s start-ups may not be as immediately recognisable as Skype or Airbnb, but what they produce may be a lot more life-changing … literally.
No-one knows what the future holds for Cuba – a lot depends on the attitude of the new US administration – but Havana has an opportunity to become a fascinating alternative to pretty much every other tech hub in the world. The city is overflowing with highly skilled computer scientists who have long been used to producing innovation from virtually zero resources – a skill many in VC-rich technology clusters have forgotten. Whether or not Havana can keep that lean-and-mean advantage, or whether it gets swallowed up by Silicon Valley itself, is very much up for grabs.
Low set-up costs, very light regulation and zero capital-gains tax is making New Zealand’s capital city an increasingly attractive start-up destination. Local incubator Lightning Lab has helped grow Wipster, described as Google Docs for video, and Publons, which is disrupting academic-paper publishing. Paper Kite is developing proprietary phone-based payment services, and StarNow brings together actors and casting directors in the movie industry. Wellington may have nowhere near the clout (yet) of its Northern-Hemisphere rivals, in terms of either inward investment or successful exits, but these are early days and the city is hard to beat for quality of life.
The world’s leading hub for technology manufacturing, Shenzhen is without doubt the number-one destination for hardware start-ups. With a skilled and flexible workforce of 4 million (the same as the whole of South Korea), massive R&D spending ($10 billion last year, or 4 per cent of GDP) and an unrivalled cluster of suppliers and subcontractors, there is virtually nowhere else to go if your output is physical rather than bits and bytes. In addition, the city’s lightly regulated ChiNext Stock Exchange is an excellent route to high-value exits. Home to Lepow, makers of colourful consumer digital products, Foream, the company behind the Drift camera, and, of course, Foxconn, Apple’s manufacturer of choice.
Since gaining independence twenty-six years ago, Estonia has performed a pivot worthy of the finest start-ups – from obscure Soviet republic to world-renowned centre for innovation. Best known as the birthplace of giants such as Skype and foreign-exchange service Transferwise, Tallinn, the Estonian capital, has forged a reputation as one of the easiest places in the world get your start-up on its feet. The country has the world’s most advanced digital bureaucracy – even the cabinet is paperless – and it takes less than five minutes to register a company on the government’s one-stop e-portal. And, although Estonia is home to only 1.4 million people (400,000 in Tallinn), the workforce is bright, educated and very computer savvy. Look out for Sorry as a Service, which will attempt to automate customer relations without the tears, and a clutch of new fintech firms, including Pocopay and Fundwise.
(All credit for this piece goes to Barclays Wealth where this has been re-posted from)