Silicon Valley still the start-up epicentre, but other ecosystems are catching up

20 Nov 2012

Silicon Valley remains the number one startup ecosystem in the world, according to a new report from Telefonica Digital which draws upon insights from 50,000 startups. However, ecosystems are catching up including Tel Aviv, which has just outpaced New York, and London.

The Telefonica Digital Startup Ecosystem Report 2012 argues that this global growth supports the theory that nations the world over are shifting significantly from service-based economies to become increasingly driven by a new generation of software and information organisations.

The report indicates Silicon Valley is still the largest ecosystem but that other ecosystems in Latin America, Europe and the Middle East and Asia.

The charge of new startup environments is being led by Tel Aviv, which has overtaken New York to become the world’s second largest ecosystem.

In Europe, startup ecosystems in London and Berlin are leading the charge, but still lag significantly behind more established ecosystems in the US, namely Los Angeles, Seattle, new York and Boston.

London is by far the largest startup ecosystem in Europe, even though SV is three times larger. London has been slow in adopting mobile as a new trend. It has 30pc less startups than SV or NYC in the mobile space.

Silicon Valley entrepreneurs have on average four mentors: 20pc more compared to the average ecosystem.

Other ecosystems around the world which have considerable less mentors compared to Silicon Valley include: Moscow with 61pc less support via mentors; Sao Paulo with on average 2.51 mentors (37pc less support); Tel Aviv with 49pc less support with just 2.05 mentors; Berlin has 54pc fewer mentors.

However, Santiago has the strongest network of tech startup support. Entrepreneurs have 4.81 mentors on average – this is nearly 25pc more than SV. This goes a way to explain the ecosystem success in the city.

Why Tel Aviv is an ecosystem to watch and emulate

But the location to really focus on right now is Tel Aviv. In 2009, 63 Israeli companies were listed on the tech-orientated NASDAQ – more than from Europe, Japan, Korea, India, and China combined.

Almost every major tech company today has some kind of subsidiary in Israel: Intel, Microsoft, Google and Cisco etc.

Some 39pc of Israeli high-tech employees work in the R&D departments of multinational companies.

The rise and rise of female entrepreneurs

New York City is the global capital for women tech entrepreneurs – nearly a fifth of entrepreneurs are female. This is twice as many as Silicon Valley.

London is leading the way in Europe where a tenth of all entrepreneurs are female.

While in Santiago a fifth of entrepreneurs are female.

However, there are still pockets around the world where men dominate, such as Berlin and Sydney (where only 3pc of entrepreneurs are female) and Sao Paulo (where only 4pc of entrepreneurs are female).



John Kennedy is a journalist who served as editor of Silicon Republic for 17 years