Which cities are in pole position to be(come) the next urban startup hotspots? The World Economic Forum published a new overview that holds some interesting surprises – and disappointments. More about startups and their importance for urban life in the live talkshow Stadsleven: ‘Start up, Fall down’ on Nov. 26th in Pakhuis de Zwijger.
Let’s get the bad news over with first: Amsterdam (nor Delft nor Eindhoven nor Twente) is not on the list. Not at all, top nor bottom.
So who is? The legendary birthplace of the startup scene Silicon Valley is still at the top, followed by New York City, London, Beijing, Boston, Tel Aviv, Los Angeles, Shanghai, Paris and Berlin. Beijing is home to more than 1,000 AI companies, one of the four fastest-growing startup sub-sectors globally. Another global AI hotspot is Montreal, which since 2016 has invested more than $1 billion in AI companies located there.
None of them, though, will be “the next” Silicon Valley. Rather there will be 30 “next” hubs that will reach critical mass and reshape the state of the global economy. And that’s important, given that “the global start-up community is now the top engine of job creation and economic growth in the world.”
One of those hotspots will be Lagos (image above), the largest city in Africa and one of the fastest growing cities in the world. “It has the largest tech hub in Africa, global titans like Google and Facebook have invested there, and young entrepreneurs there are on the cutting edge when it comes to running mobile-first businesses.”
You will have noticed that (only) 3 out of the 10 next hubs are in Europe. The British magazine The Economist is not surprised. In an article called Why Europe will never produce a Google, it notes that Europe still lacks large social media, ecommerce and cloud computing firms comparable in scale to America’s Google and Microsoft, or to China’s Alibaba and Baidu. Of the world’s 15 largest digital firms, all are American or Chinese. Of the top 200, only eight are European. “Mariya Gabriel, the EU’s digital economy commissioner, worries that Silicon Valley and China now make the big decisions about the internet, and that this affects European domestic policy. She is right.”
This has to do, the author explains, with Europe’s history as a patchwork of 27 countries, in spite of the EU’s single market. “New technologies require vast lakes of data, skilled labour and capital. Language divides get in the way. Vast, speculative long-term capital investments that make firms like Uber possible are too rarely available on European national markets.” And, The Economist can’t help adding, Europeans are protective of their data.
Europe’s governments and the EU could do more. They could create a genuine digital single market, and do more to promote enterprise and institutional innovation. Better integration of capital markets would help as well. The arch conclusion: “If it wanted to, Europe could improve.”