Compass has released its Startup Ecosystem Ranking 2015 report, The automated reporting and benchmarking software provider formerly known as Startup Genome is following up on its 2012 report, with insights on the world’s top startup territories. To compile the report, Compass used data from startup hubs all around the world. It gathered proprietary survey results as well as information from publicly available sources like Crunchbase and AngelList.
As expected, the 2015 ranking shows a strong US presence – seven out of 20 cities in there can be reached using a +1 country code. In fact, not much has changed in the top 20 since the 2012 ranking, barring some reshuffling of positions and the swapping of Waterloo, Melbourne, and Santiago with newcomers Austin, Amsterdam, and Montreal.
But much like the magnetic North, one constant everyone can count on is Silicon Valley’s domination of the rankings (barring, I don’t know, a magnetic field flip or something). That small patch of land in California is home to almost 50 percent of the value of all exits in the top 20 territories over the past two years – more than all of the other 19 combined. To the surprise of absolutely no one, the Valley enjoys top capital, talent, and performance, helping it retain pole position.
- Silicon Valley captures about 45% of the top 20’s VC investments and exit value, almost 5x its closest competitors—New York and London, respectively.
- Silicon Valley has the highest absolute growth in VC investments and exit value. It captures 43% and 30% of the top 20’s absolute total growth, respectively.
- Silicon Valley has a highly dynamic labour market. At a 40 day average SV has the shortest time to hire an engineer in the U.S.
- Silicon Valley’s products cover 19% more languages than the North American average.
- Silicon Valley has the most Startup Experience: for instance 48% of all startup employees have previously worked in another startup.
- Silicon Valley is the ecosystem with the highest startup density in the top 20. Silicon Valley has 3 times more Startups per capita than Seattle or Bangalore.
The rise of the startup ecosystems all around the world should also be seen in the context of the larger socioeconomic structural shift taking place. Information Era businesses have become the dominant source of economic growth, significantly automating or altering much of the industrial and service businesses of the previous economic era. Many others have described aspects of this structural shift under different names, such as Marc Andreessen’s widely circulated Wall Street Journal essay, “Why Software is Eating the World”, Deloitte Center for the Edge’s semi- annual “Shift Index”, or Richard Florida’s Creative Class Group, which has published numerous books on the topic, such as the “Rise of the Creative Class.”
Given technology startups’ critical role in the information economy, the importance of healthy startup ecosystems only stands to increase in the future. With this report we want to accelerate the development of startup ecosystems around the world by answering critical questions for entrepreneurs, investors, and policy makers that are difficult to answer without the data we have gathered and analyzed in this report, as well as to raise the general populace’s awareness of the increasing socioeconomic importance of startup ecosystems.
Download the full report here.
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