For entrepreneurs and startup owners, choosing the right location for your business is one of the most important decisions you will make. Selecting an environment that is conducive to growth can give your venture a head start before you’ve even begun, with a wealth of benefits to being in the right place at the right time.
For tech startups, this is even more critical. In such an innovative and fast-paced sector, it’s essential to be in an area that has its collective finger on the pulse – and that doesn’t just mean California’s Bay Area.
Therefore, in a bid to identify the new Silicon Valley, we’ve compiled research from a wide array of established sources, taking into account numerous factors, such as:
- Access to venture capital and investment
- Regional and governmental incentives for businesses
- Networking potential
- Access to a trained workforce
- Number of incubators and accelerators
- Cost of doing business
- Amount of capital invested in the region
The result is a list of locations in which your startup is far more likely to thrive, especially if you have done your market research, and you have a strong business plan in place. From Europe to Asia and beyond, these are the best tech cities in the world in 2019.
On the surface, Tokyo’s suitability as a tech hub doesn’t make for good reading; language barriers, generational clashes, and a lack of global competition are all commonly listed reasons as to why you, as an entrepreneur, should look elsewhere. Yet, despite this, the Japanese capital still scores highly across a whole range of ranking compilations? So, why is this?
Firstly, Japan embraces tech like no other. Its government is obsessed with evolving the relationship between big data, machine learning and the Internet of Things (IoT), creating a society in which tech pervades every aspect. This, in itself, has created a massive opportunity for tech startups, particularly in artificial intelligence (AI)-related fields.
Secondly, as the city prepares to host the 2020 Olympic Games, the government is providing funding for a whole host of technological prototypes and trial runs, with many of these ‘smart city’ technologies likely to be one day implemented elsewhere on the globe. Tokyo might have its problems with startups, but in terms of sheer creativity and innovation, there is nowhere else quite like it in the world.
For a city that is defined by its colourful past, Paris is undoubtedly looking forward when it comes to tech startups. Thanks to a concerted push from the French president, Emmanuel Macron, the city’s universities are producing an increasingly rich slew of talented tech graduates, while Station F – the world’s largest startup incubator – opened its doors in June 2017.
There are no headline names just yet; French startups are regularly criticized for their reticence to go global, while investors prefer safe returns to potential disruption. The infrastructure and the environment are certainly in place, however, making Paris the perfect destination for tech entrepreneurs who are willing to break the mould.
Regularly ranked as one of the best cities (and, indeed, one of the best countries) to live and work in, Amsterdam is also a solid base location for a startup. As well as benefitting from the Netherlands’ economic stability and the security of its banking infrastructure, the Dutch capital also offers excellent transport links, both in Europe and to the wider world.
Indeed, Amsterdam has it all, including notably fast broadband speeds, open and intense collaboration, and affordable costs both for living and doing business, making it one of the most appealing locations for an aspiring entrepreneur.
7. Tel Aviv
Tying in seventh place, however, is Tel Aviv – or, as it’s commonly referred to, Silicon Wadi.
Much of the city’s pioneering dominance in the IT field (particularly in cybersecurity) can be attributed to the country’s political and security situations, with the Israeli government investing heavily in these areas. Tel Aviv also boasts a highly driven, innovative and talented workforce, too, with employees learning key skills and building crucial networks during their time in compulsory public service.
There are other factors at play, too. According to journalists Dan Senor and Saul Singer, taking risks is a big part of Israeli culture, with Tel Aviv boasting one of the highest startup densities in the world.
The second Asian entry on this list, Singapore has a lot to offer potential startups, such as modern infrastructure, a highly motivated workforce and proximity to several growing markets. Changes in government regulations have made it one of the most accessible places in the world to do business, as well, with the Singaporean government offering an array of incentives, grants and support to entrepreneurs.
Although traditionally a financial services powerhouse, the city-state’s tech scene has evolved massively in recent years, with several unicorns emerging from the crowd.
Not to be outdone by California, Boston is one of several east coast behemoths making waves in the US tech sector; unsurprising, perhaps, given the presence of Harvard and MIT – two of the finest educational institutions in the world – on its doorstep.
Boston also has existing tech infrastructure in place, with the city home to a vast network of incubators, accelerators and technology parks, as well as an established culture and tradition of successful startups.
4. San Francisco
Despite the growth of new and exciting tech hubs all across the globe, there is still life yet in the Bay Area; it remains the largest startup ecosystem in the world, with its access to venture capital unmatched anywhere else, while the potential for networking speaks for itself.
Of course, there are downsides; the lack of affordability when it comes to renting and housing is increasingly driving away talent, with even senior software engineers struggling to make ends meet. In terms of being at the heart of an innovative, entrepreneurial culture, though, there are few places in the world more spectacular.
As a city with a long-held reputation for doing things differently, the German capital is the perfect location for innovators. As Berlin-based SoundCloud founder Alexander Ljung says, “one of the reasons it is good for startups, is because the whole city is a startup”.
Crucially for business, Berlin is also affordable, with low office space rental costs. It has attracted a switched on and well-educated workforce of around 100,000 tech professionals (who, again, appreciate the city’s low living costs), and while London may lead the way in terms of venture capital investment, Berlin is certainly the best of the rest in Europe.
2. New York City
New York’s proximity to Wall Street – one of the world’s major financial hubs – means that there is much potential investment flying around for startups. Indeed, fundraising expert Alejandro Cremades deems it the top tech city for access to venture capital, with the likes of Vice and Buzzfeed both having exited the market while based in the city.
By nature of being one of the most culturally appealing cities in the world, there is no shortage of talent, either, although high rental costs (for both businesses and individuals) can make things a little more complicated.
Despite the seemingly unending uncertainty surrounding Brexit, London remains a global leader when it comes to tech, with the vast levels of private equity investment over the last four years dwarfing its closest European rivals.
The city has forged a particularly firm grounding within the fintech sector, with successful unicorns such as Revolut a product of Canary Wharf’s Level39 incubator. Given the city’s renowned array of diverse talent and world-class universities, acquiring the right talent shouldn’t be an issue, either.
Although London can be excruciatingly expensive, and political direction remains unclear, the city undoubtedly has everything a startup needs to be successful.
As you can see, tech is now a truly global sector of interconnected hubs, rather than one central driving force; as a tech entrepreneur, it’s crucial that you buy into this. If you’re serious about giving your business the best chance to thrive, then do your research into what it takes to set up a business abroad, and ensure that you are committed to making it succeed.
Which other tech cities are thriving off the radar? Let us know your tips in the comment section below!
Sources: Valuer, The Tech Advocate, 2thinknow, Savills, Primalbase, Virgin, Expert Market, Alejandro Cremades, KPMG
Top 50 Tech Cities in the World (2019)
|1||London, UK||7.1||25||Oslo, Norway||19.2|
|2||New York City, NY, USA||7.8||27||Vienna, Austria||19.5|
|3||Berlin, Germany||8.7||28||Chicago, IL, USA||19.9|
|4||San Francisco, CA, USA||9.2||28||Bangaluru, India||19.9|
|5||Boston, MA, USA||9.7||30||Madrid, Spain||20.4|
|6||Singapore, Singapore||10.5||31||Dallas, TX, USA||20.7|
|7||Amsterdam, Netherlands||11.9||32||Atlanta, GA, USA||20.9|
|7||Tel Aviv, Israel||11.9||32||Washington DC, USA||20.9|
|9||Paris, France||12.4||34||Houston, TX, USA||21.1|
|10||Tokyo, Japan||12.6||35||Dublin, Ireland||21.5|
|11||Austin, TX, USA||12.9||36||Montreal, Canada||21.6|
|12||Los Angeles, CA, USA||13||37||San Diego, CA, USA||21.7|
|12||Beijing, China||13||37||Miami, FL, USA||21.7|
|14||Stockholm, Sweden||14.2||39||Denver, CO, USA||22.5|
|15||Toronto, Canada||14.4||40||Philadelphia, PA, USA||22.6|
|16||Seattle, WA, USA||14.8||40||Istanbul, Turkey||22.6|
|17||Melbourne, Australia||15.3||42||Dubai, UAE||22.7|
|18||Shanghai, China||16.1||43||Manchester, UK||22.8|
|19||Copenhagen, Denmark||16.9||44||Milan, Italy||23.1|
|19||Seoul, South Korea||16.9||45||Athens, Greece||23.4|
|19||Vancouver, Canada||17.2||46||Portland, OR, USA||23.5|
|21||Sydney, Australia||17.3||47||Hamburg, Germany||23.6|
|22||Munich, Germany||17.6||47||Moscow, Russia||23.6|
|23||Hong Kong, Hong Kong||17.7||49||Oakland, CA, USA||23.7|
|24||Barcelona, Spain||18.4||50||Taipei, Taiwan||23.8|