Tel Aviv rivals Silicon Valley

Even as air raid sirens warn residents of Tel Aviv of rockets approaching from Gaza, a research study finds that the city – along with many others across the world – is challenging Silicon Valley’s status as the world’s most-influential start-up ecosystem.

Research launched today by the Startup Genome and Telef√≥nica Digital reveals that while Silicon Valley is still the world’s largest and most-influential start-up ecosystem, it no longer wields the power and influence it once did. Flourishing communities in Latin America, Europe, the Middle East and Asia have grown considerably over recent years and are now beginning to challenge Silicon Valley’s domination in technology innovation.

The Startup Ecosystem Report 2012 argues that this trend suggests that countries are shifting from service-based economies to become increasingly driven by a new generation of fast-moving software and technology organisations.

The report finds that Tel Aviv, a highly advanced ecosystem, is the leading alternative to Silicon Valley, while on Silicon Valley’s doorstep, flourishing communities in New York and Los Angeles mean the USA is home to three of the largest ecosystems in the world. Across the Atlantic, London is by far the largest startup ecosystem in Europe, although its output is still just a third of that of Silicon Valley. Outside of the more traditional markets, Sao Paulo’s startup ecosystem is growing rapidly and creates more jobs for the local community than Silicon Valley does for its own.

The report identifies the ecosystem factors which have contributed to the success of Silicon Valley and uses it as a baseline to compare how well suited other cities are to fostering entrepreneurs. On this basis the top 20 start-up ecosystems in the world are:

1. Silicon Valley

In-depth research provides tangible findings for entrepreneurs, investors and policy makers

The Startup Genome, in partnership with Telefonica Digital, engaged with more than 50,000 entrepreneurs across the world to understand how well placed different ecosystems are to support the development and success of startups. Users of the StartupCompass.co a business intelligence tool for startups submitted information on their organisations based upon a range of factors, including financial, sales, marketing, product, business model, team, and market information.

Some of the key findings of the report are as follows:

Mapping key startup trends around the world

‚”I am really excited to reveal these insights around how global technology startup ecosystems stack up. Our hope is by completing the first data-driven, comparative study of this global phenomenon we will help to facilitate a constructive public dialogue,‚” explained Bjoern Lasse Herrmann, CEO of the Startup Genome. ‚”We created this report for three reasons: firstly, to put a spotlight on the emerging hotspots of technology entrepreneurship that will be responsible for powering a massive global socio-economic structural shift: secondly, to further democratise the knowledge necessary to help spread the merits of Silicon Valley: and thirdly, to give actionable insights to entrepreneurs, investors, corporate development departments and policy makers.‚”

Gonzalo Martin-Villa, CEO of Wayra, Telef√≥nica Digital’s global startup accelerator, said: ‚”These results tangibly demonstrate how entrepreneurship is flourishing all over the world. We are now seeing emerging ecosystems beginning to act as real viable alternatives to the traditional centres of technology innovation. This is incredibly exciting, since it suggests that, increasingly, the necessary support infrastructures are in place the world over for bright minds to turn their ideas into reality.‚”

Steve Blank, a Silicon Valley serial entrepreneur and contributor to the report, said: ‚”The democratisation of entrepreneurship from Silicon Valley and from Startup Ecosystems all over the world is creating new strategies and structures for innovation and disruption. The strategy lessons that we learn from these startups will light the way for a massive restructuring of all corporate organisations in the next 40 years. Only then will we look back and realise that we were just beginning the economic revolution of the wired world.‚”