Global Startup Ecosystem Rankings
Compass, formerly the startup Genome, released their 2015 Global Startup Ecosystem Ranking with a revamped component index using five major components: Performance, funding, talent, market reach, and startup experience. Unsurprisingly, Silicon Valley tops the list, and in fact, the US dominates the top ten rankings. But many regions globally are fighting for their own places on the list, as Canada positions itself firmly in the late teens, Australia makes a show with Sydney at 16, and the European continent boasts several hubs including London at 6, Berlin at 9, and Paris at 11. It should be noted, Compass’ index does not include startup ecosystems from China, Taiwan, Japan, or South Korea due to challenges in acquiring survey participants and complete data.
(Survey Source: Compass.co)
Socioeconomic Impact of Startup Ecosystems
The Compass research points to a global phenomenon of tech entrepreneurship with startup ecosystems emerging rapidly worldwide. Today’s tech entrepreneurs have all of the necessary tools and resources at their fingertips, as well as the market conditions to scale companies to billion dollar enterprises faster than ever before. States Compass, “Given technology startups’ critical role in the information economy, the importance of healthy startup ecosystems only stands to increase in the future.”
Five key findings have been identified by Compass:
- Ecosystems have become more interconnected, and startup teams have become more international. 37% of all of the funding rounds of the top 20 ecosystems included at least one investor from an external ecosystem.
- Exit growth is rising. Across the top 20 ecosystems, exit growth rose 81% annually from 2013 to 2014.
- Venture capital (VC) trends in startup ecosystems appear to be on the increase as from 2013 to 2014 a VC investment growth of 95% could be seen across the top 20 ecosystems.
- The ecosystem rankings have changed dramatically since 2012. New York, Austin, Bangalore, Singapore, Berlin and Chicago made the greatest leaps, while Vancouver, Toronto, Sydney, and Seattle slid down the ranks.
- Though gender equality is missing across all startup ecosystems, the trend for female entrepreneurship is up, and the number of female founders in the global startup ecosystem grew by 80% over the last three years.
Though The Telegraph calls Sweden the startup capital of Europe, submitting that Stockholm is second only to Silicon Valley as a tech hub on a per capita basis, this Nordic city tends to be overlooked in many global startup rankings. Says Skype creator Niklas Zennström, “Stockholm is becoming a world leader in technology.” Thanks to a small population of 9.8 million people, just a little more than London, Sweden’s tech scene has thrived due to its global outlook, and Zennström believes the success of Stockholm’s startups is owing to the realization that their domestic market is not big enough. With the average 1.4 years required for international company expansion from small countries and substantial government investment in Sweden’s tech infrastructure, it’s no wonder Stockholm’s tech scene is booming. Stockholm’s exclusion from this (and other) list should be a reminder that statistics aren’t able to account for everything, and the startup environment is one which lives by its own rules.
By Jennifer Klostermann