Here are the Next Exciting Startup Hubs after Silicon Valley

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Here are the next startup hubs after silicon valley

New & exciting startup ideas are also emerging from these startup hubs

Once silicon valley was considered as the most prominent destinations for getting startup ideas to fruition. But now things have started to change. Have a look at the new hot spots for startups that are fast emerging as the favorite destinations for many world-class ideas. 

COVID 19 has compelled numerous economies to innovate and innovate fast. Solutions to many world problems in no more centralized but are becoming distributed as other regions of the globe with a strong robust startup eco-system come forward.

Let’s examine how each of these countries is attracting innovators, entrepreneurs, and start-ups and how their governments are supporting the ecosystem.

1. Singapore

Singapore tops the list of the World Economic Forum’s recent Global Competitiveness Report, both overall and in factors like health, labor market functionality, infrastructure, and financial development. It stood 13th in terms of its innovation capability.

Image Credit: Costa Cruises

How is the Government supporting?
The government is implementing various start-up-friendly policies to attract awesome ideas into Singapore. These include exemption schemes, tax reduction, infrastructure for business-incubation, and grants. Startup SG is one such initiative that was launched in 2017 to unify different aspects of governmental schemes for stakeholders including, investors, incubators, accelerators & start-up founders.

Investment
Thanks to the governmental efforts and an evolving private financing ecosystem, Singapore is witnessing a steady rise in investment. According to Enterprise Singapore, the investment rose from $2.39 billion in 2017 to $8 billion in 2019. The investment in deep-tech start-ups also increased by 260% (from $160 million to $580 million) over the same period. The startups, especially in sectors like advanced manufacturing, deep-tech, healthcare, and urban solutions have started to gain momentum. 

As per a study by Accenture, fintech startups raised $861 million in 2019, which was over twice the amount raised in 2018. Monetary Authority of Singapore (MAS) has a significant role in fintech success in Singapore. It provides support such as an API exchange platform to enable live experiments in addition to rapid design and deployment of potential solutions. 

2. Israel

Tel Aviv is known for being Israel’s start-up capital. Israel, quite popular as a ‘startup nation’, has the highest concentration of start-ups per capita worldwide and is also a global leader in deep- tech.

Tech giants such as Microsoft & Google, recognizing the huge potential in Israel, support the country’s start-ups both with investment and acquisition. 

Image Credit: Agoda

How is the Government supporting?
The Innovation Authority of Israel provides support to innovative technologies through grants and is also responsible for developing the needed infrastructure for innovation, connecting the country’s economy to the outside, and encouraging & promoting initiatives, laws & policies, to enhance Israel’s status as the ‘start-up nation’.

Investment
A total of $8.3 billion were raised by Israeli startups in 2019. This is around 30% higher than the funds raised in the previous year. The rise is attributed to foreign capital investment, which is driving industries like life sciences, software, semiconductors, and the internet.

AI companies are also attracting significant investment.  In fact, Israel ranks third in the number of AI start-ups globally. In Tel Aviv, Artificial Intelligence is the leading sector for startups, constituting 25% of employees & 40.7% of all startups in the city.

3. Republic of Korea

South Korea is the 12th largest economy in the world which is mainly driven by giants like Samsung and LG. However, many startups have now started to emerge in the country. According to Statista, there were more than 1.7 million startups in South Korea that created employment for 2.9 million people, as of 2019.

Seoul’s Startup Hub, Image Credit – english.visitseoul.net/

How is Government Supporting?
Tech Incubator Program for Start-ups, popularly TIPS is a state-led incubation programme that discovers and nurtures promising start-ups. It selectively matches startups with government funding. The good part is that the government takes no equity against these funds and offers them without any conditions attached. This encourages start-ups to aim high without having to worry about possible failure. Such a policy has proved to be a game-changer for the country’s startup ecosystem.

In 2017, the Ministry of SMEs and Startups was created by the Korean Government to further strengthen competitiveness and support innovations by start-ups. The amount of funding it provides has increased rapidly. 

Investments
A total of eight government ministries of the Korean Government plan to raise 81 venture funds worth $2.1 billion by creating fund-of-funds investments. 
In 2019, over $3.5 billion of investment made its way into the market – an increase of 25% as compared to that in 2018. Biotechnology, ICT services, and commerce were three sectors that witnessed a substantial increase in funding.

4. Kenya

The startup ecosystem of Kenya is on the move. It is a leading hub for entrepreneurship on the African continent. 

With English as one of the two official languages of Kenya, a large pool of talent from numerous universities is compelling a large number of start-ups to base their headquarters in Kenya. The excellent online payment infrastructure (centered around M-PESA service) combined with reliable internet is enabling many mobile-based online business models to thrive.

Image Credit: WeeTracker

How is the Government supporting?
The government of Kenya has ambitious plans to develop a so-called Silicon Savannah, which it anticipates will generate 2% of GDP within a decade. Kenya is also perceived to be one of the more attractive emerging markets for early 5G deployment.

However, there is still a scope of improvement from the government end. Kenya’s labor laws are not usually favorable to serving start-ups, and there is a dearth of start-up specific policies around funding.

Investment
According to Partech’s 2019 report on Africa’s tech start-up sector, Kenya is ranked second in Africa both in the total amount of funding received by start-ups and the number of deals. A total of $564 million in funding was received in 2019 – a rise of 62% over the previous year. Fintech, enterprise, and off-grid technologies top the list followed by healthcare, commerce, and the connectivity sector.

5. Brazil

São Paulo, a city in Brazil, is the only city in Latin America to make a place in the world’s top-30 global start-up ecosystems –  according to the Global Startup Ecosystem Report 2020 of Startup Genome.

Image Credit: Inc. Magazine

How is the Government supporting?
In 2018, the Government of Brazil launched the Brazilian Digital Transformation Strategy, which intends to standardize all federal efforts regarding the innovation ecosystem.

Investment
The fintech industry of Brazil is the one that has attracted the highest investment and is a key driver of Brazil’s start-up landscape. Several factors are responsible for this including the country’s large population of young people, high mobile usage, and conducive fintech regulation environment.
Several innovative start-ups are devising solutions to automate the real estate sector, which makes the proptech industry a promising prospect. 

To Wrap Up

Each of the above-stated startup hubs has its own unique approach and culture towards building vibrant start-up ecosystems. As COVID-19 is expected to adversely affect the operating environment for start-up founders, it will be worth noting how each country implements its own specific strategies for supporting the start-up ecosystem to cope with the unparalleled challenges that we confront today.