Top Global Technology Hubs of 2015

Caifu Magazine | by Caifu Global


By Sara Donnelly

Silicon Valley remains the unrivaled champion of global technology startups, but a lot has changed in the last twenty years. Today there are incubators of tech innovation worldwide to consider investing in.

Earlier this year, San Francisco-based think tank Compass Group published its Global Startup Ecosystem Report, an exhaustive comparison of the top twenty global tech locales.

The group consulted with industry leaders from 25 countries, conducting 200 interviews and 11,000 surveys to compile the list.

Regions were ranked based on five components: performance, funding, market reach, talent, and startup experience.

The research highlights the increasing interconnectedness of these hubs. For example, 37 percent of the top 20 international startup locations received investment from outside. In North America this number jumped to 41 percent. Similarly, the number of foreign employees found at the top startups was 29 percent overall, in Silicon Valley that number jumps to 45 percent.

One glaring oversight; the current data does not include China, Taiwan, Japan, or South Korea. Compass Group stated it was a challenge getting survey participants in these regions to submit complete data. It plans to publish an updated list including these areas later this year.  The revised ranking would put Beijing in the top five and Shanghai in the top 15, it said.

The place that saw the most significant growth overall since the last ranking in 2012 was New York City. It moved from number five to second place. Conversely, Vancouver, BC plummeted from ninth position overall in 2012 to 18th this year. Growth throughout Canadian startups has slowed relatively to the rest of the world according to Compass Group.

In terms of investment opportunities, the report determined that Amsterdam, Paris, Chicago and Berlin are currently undervalued. New York, Toronto, Seattle and Boston are areas "likely to have fewer underpriced, under-discovered gems of companies," it notes.

Finally, it's interesting to note a significant uptick in the number of female entrepreneurs, the report found. Although gender equality in tech is still lacking, some 18 percent of tech startups on the list had female founders, up from 10 percent in 2012. Overall Chicago stood out in this regard with a full 30 percent of its tech companies founded by women.

The Top Five

Tel Aviv

With 3,100 to 4,100 active tech startups and proximity to renowned universities, Tel Aviv, also dubbed the Silicon Wadi (valley in Arabic) is a major player on the global startup stage.

Tel Aviv's startups have traditionally been in enterprise IT, security, and networking technology. These were often based on cutting-edge technology developed in the Israeli military. "The success story of Wix - a cloud-based web development platform, which went IPO on the NASDAQ at a $750 million valuation two years ago - illustrates broader diversification." Compass notes.

Performance: 6

Funding: 5

Market Reach: 13

Talent: 3

Startup Experience:6



Home to Harvard University, MIT and other top-tier education facilities, it's no wonder Boston produces some of the world's brightest minds.

"Entrepreneurs in Boston generally benefit from a dense network of mentors and supportive organizations such as Bolt, Techstars Boston, Harvard Innovation Lab, and MassChallenge—the latter claiming to be the largest startup accelerator in the world," the report states.

Unlike others on the list, Boston is a worldwide leader in biotech and life sciences. A notable exception to this is the eCommerce startup WayFair which raised $305 million during its IPO and is currently worth more than $3 billion.

Performance: 3

Funding: 3

Market Reach: 7

Talent: 12

Startup Experience: 7

Los Angeles

With Snapchat, SpaceX, Whisper, and Tinder - all L.A.-based startups- investors around the world are paying close attention.

There are an estimated 200,000 engineers from a variety of talent pools such as the California Institute of Technology that call the region home. Similar to its legendary film industry, entrepreneurs in the region can draw on a huge number of seasoned employees and mentors.

Performance: 5

Funding: 4

Market Reach: 2

Talent: 10

Startup Experience: 5

New York City

New York jumped to become the second strongest startup ecosystem in the world with some 9,600 active tech startups.

"One of the major reasons for NYC’s growth is that it is the most popular location for startups foreign to the U.S. to open a second office or to move their whole headquarters there," the report stated. "We noticed that once many startups around the world have a functional, saleable product in their home ecosystem, they look to set up a sales office in NYC versus Silicon Valley in order to gain access to the US Market."

With a local GDP of approximately $1.5 trillion, New York is a great place to test and market all kinds of products. The city has recognized the value of supporting its startups, and New York Mayor Bill de Blasio continues to build on former mayor Michael Bloomberg’s tech-focused agenda.

Performance: 3

Funding: 2

Market Reach: 1

Talent: 9

Startup Experience: 4

Silicon Valley

Home to Apple, Google, and Facebook to name a few, Silicon Valley's global importance is indisputable. These three companies combined have a market cap of $1.5 trillion and employ some 165,000 people around the world. The region has roughly 19,000 startups and 2.2 million high tech workers. Truly global, more than 50 percent of its startups are founded by immigrants, and more than 70 percent of its engineers are also immigrants.

Performance: 1

Funding: 1

Market Reach: 4

Talent: 1

Startup Experience: 1