Entrepreneurs, notably the tech variety, are sprightly spirits, early to spot opportunities and quick to seize them, too. Tech Nomads .Murali Krishna checks out the latest trends in tech hubs and where they are springing up.
Startup Heatmap Europe, found in a recent survey of startup founders that 42.7% had moved to their present homes from a different city, and nearly a quarter (23%) had crossed over from another country, compared to a mere 4% movement for the general population in EU countries. Consequently, fortunes of startup hubs can and do turn on a dime, because entrepreneurs are fleet-footed in their quest for success. The race to attract entrepreneurs and innovators might, to use a sporting analogy, resemble the 100m dash in speed but without a finish line, because there is simply no stopping this train..
Just days ago, an Ernst & Young study found that Berlin, a longtime favourite of startups, had lost its top ranking in Europe to London, which you may have thought would be reeling under the effect of Brexit. While London received €2.2 billion ($2.36 billion) in venture capital in 2016, Berlin got less than half, €1.07 billion, and finished fourth, behind Paris and Stockholm.
But access to capital is not the only factor that determines startup destinations. In fact, it may not even be the most important one. Access to talent, costs, and strength of the overall ecosystem, for example, rank higher among entrepreneurs seeking to enhance their chances of success. So, in a lot of other rankings that consider multiple factors, Berlin and London are locked in a close race, with Brexit likely to tilt the balance in favour of the German city.
Amsterdam rising, Italy fading
2016 was a down year for startups, with venture investment dropping by nearly a quarter worldwide. But in Europe the decline was only 12.5% to $14 billion, and the outlook for the current year is widely considered “cautiously optimistic,” given the expected clarity on Brexit and concerns from a Trump presidency in the United States for the world at large.
In the emerging environment, choices are still expanding with the notable exception of turmoil-ridden Italy, which has seen a net outflow of 29% of entrepreneurs. On the other hand, the Netherlands appears to be the rising star, with a 31% net inflow, while its capital Amsterdam rises in rankings as many consider it ideally located to benefit from Brexit.
Then there are, in a manner of speaking, the outliers: the Baltics and Eastern Europe. Startup Heatmap Europe rates the Baltics as the “strongest region” for startup migration with a 14% net inflow. Stockholm, Copenhagen, Oslo and Helsinki are the key cities in the region. The Swedish capital is ranked second, behind London, in the European Digital City Index, which evaluates the entire
digital ecoystem for entrepreneurs, and the Finnish capital is placed fourth, ahead of several Western European hubs.
In Eastern Europe, venture capital investment is estimated by VentureBeat to have risen 30-fold – from $9.5 million in 2011 to $283 million in 2016 – in six years, thanks to lower costs and a significant talent pool. Of the cities here, no less than a dozen are ranked among the top 50 in Europe for startups, with Talinn in Estonia right at the top.
So what do we expect now?
Even though Stockholm, Berlin and Helsinki reflect a “global orientation”and an ability to expand outside the European Union, London will remain unmatched in Europe, according to Startup Genome/Compass. London enjoys that high distinction for its “global connectedness,” among other reasons, andtogether with the Silicon Valley and New York represents the top tier of startup.