Silicon Valley is the world’s top tech hub today. With a $128,308 per capita in the annual gross domestic product (GDP-PPP), if Silicon Valley were a country, it would be the second wealthiest in the world behind Qatar. Silicon Valley is home to major tech companies such as Google, Apple, Hewlett-Packard, Facebook, Netflix, Adobe, eBay, Cisco, LinkedIn etc. In 2019, the Bay Area startups attracted $45.9billion worth of funding. Silicon Valley is an almost $3 trillion neighborhood thanks to companies like Apple, Google, and Tesla.
Silicon Valley is a region in the southern San Francisco Bay Area of Northern California that serves as a global center for high technology, innovation and social media. The word “silicon” originally referred to the large number of silicon chip innovators and manufacturers in the region, but the area is now the home to many of the world’s largest high-tech corporations, including the headquarters of 39 businesses in the Fortune 1000, and thousands of startup companies.
Silicon Valley also accounts for one-third of all of the venture capital investment in the United States, which has helped it to become a leading hub and startup ecosystem for high-tech innovation and scientific development. It was in the Valley that the silicon-based integrated circuit, the microprocessor, and the microcomputer, among other key technologies, were developed.
Silicon Valley holds less than 0.1% of the world’s population (3 million people) and yet they’ve launched nearly half of the most valuable tech companies in the world, with a valuation of more than $110 billion. It is home to three of the world’s five most valuable companies. Giants such as Apple, Facebook, Google and Netflix all claim Silicon Valley as their birthplace and home, as do trailblazers such as Airbnb, Tesla and Uber. The Bay Area has the 19th-largest economy in the world, ranking above Switzerland and Saudi Arabia.
Silicon Valley was once the dream destination for budding entrepreneurs. Although it is the undisputed leader for tech entrepreneurs and startup visionaries, other regions on continents around the globe are becoming increasingly worthy competitors. Today multiple hubs exist and emerging technologies are in many countries including Japan, Israel, China and India.
Silicon Valley, in particular, has always dominated the start-up market, receiving more than $110 billion of venture capital and private equity funding towards the movement, the release said. London has also shown its strength, bringing in $34.2 billion in growth capital, which is more than three times the amount of funding other tech hubs like Paris, Berlin, and Tel Aviv have received, added the release.
The rise of Silicon Valley’s worldwide
To make this happen, you need more than just start-ups; you need an entire ecosystem: a constant stream of entrepreneurs, capital and companies of all sizes. World Intellectual Property Report underlines the elements of successful innovation ecosystems: government funding for scientific research and support in moving promising technology from the laboratory to the production stage; competitive market forces that encourage firms to innovate, supported by vibrant financial markets and sound regulation; and fluid linkages between public and private innovation actors.
The report also documents how innovation is increasingly linked to research at universities and public research organizations. The 3D printing, nanotechnology, and robotics fields show higher shares of academic patenting compared to the three historical cases of airplanes, antibiotics and semiconductors. Nanotechnology stands out, with academic applicants accounting for around a quarter of patenting worldwide.
KPMG survey “The changing landscape of Disruptive technologies”, Global Technology Innovation Insights-2014/2015 concluded that Silicon valley no longer has a lock on technology innovation. Today multiple hubs exist and emerging technologies are in many countries including Japan, Israel, China and India. Technologies such as mobile commerce and digital currencies have taken more hold more rapidly in Asia than in the west, leapfroging over legacy systems. Micro-innovations from China for gaming, instant messaging and smartphones are now being copied in the West-the reverse of a decade ago.
KPMG report also found “Significant numbers of emerging technologies are gaining momentum on a global scale, at faster innovation cycles, with the potential to be the next market disruptors.” Growing acceptance of technologies such as Internet of Things (IoT), machine-to-machine (M2M), biotech, digital currencies, data analytics, drones, robotics, 3D printers, and AI in both consumer and enterprise markets are pushing them into the mainstream.
Cloud and mobile technologies are increasingly maturing as disruptors. These foundations will remain vitally important to further technology progress and will remain a source of enabling innovation. New tech hubs springing up from Shanghai, Tokyo, New York and Seoul foster more breakthroughs.
Other city considered Silicon Valley is London in Europe. London and Silicon Valley are two of the world’s biggest innovation destinations, according to Quid’s Innovation Mapping report released in Nov 2018. Both locations host the most tech start-up growth, and also invest the most time and research into developing cutting-edge technologies said the press release.
Singapore, ranked seventh last year, took the top spot this year in the global rankings and offers an advanced IT infrastructure, strong government support and IP protection laws, and a deep pool of talent. As a start to economic transformation, the government-sponsored Smart Nation program has been progressing since 2014, and the National Artificial Intelligence Strategy was announced in November 2019.
Named the miniature Silicon Valley, Singapore is a powerhouse for tech. As part of the 2020 Research Innovation and Enterprise plan, the government will sustain its commitment to research, innovation and enterprise by investing $19 billion. Despite the pandemic, Singapore managed to attract $17.2 billion in fixed asset investments in 2020.
London is the third most important tech hub in the world today. According to the latest stats, UK tech investment topped £10 billion for the first time with the tech industry growing 6 times faster than any other industry in the UK (source). The city’s thriving tech environment is nurtured by one of the world’s leading startup ecosystems, a startup visa program and access to funding. The Start-Up Visa is a new 2-year visa route (established in Spring 2019) created for early-stage, but high potential, entrepreneurs who are starting a business in the UK for the first time. Additionally, London is dipping into seven of the fastest growing tech sectors worldwide: MedTech, Fintech, artificial intelligence (AI), gaming, AdTech, cybersecurity, and smart cities, said the release.
Tokyo, Japan with a growing venture capital base, world-class infrastructure and an increasingly global and highly educated talent pool, is emerging as one of the world’s cities of choice for tech startups. In 2018, Japanese Prime Minister Shinzo Abe rolled out a strategy that aims to produce at least 20 tech unicorns by 2023 . Two industry subsectors are particularly gaining traction in Tokyo’s tech ecosystem: manufacturing & robotics and fintech. The total amount of funding raised by Japanese startups in 2019 stood at $4.09 billion.
In the past five years, New York has seen remarkable growth in AI and big data venture capital funding making AI, big data and analytics one of the city’s fastest-growing industry. Behind AI and big data comes cybersecurity, a billion-dollar industry for New York. The highest number of edtech companies in the USA is in New York City which makes it also the heart of edtech funding. There are more than 100 startup incubators and more than 9000 startups. In 2020, New York City received $16.2 billion in funding with 886 companies attracting venture capital deals.
Calgary, Canada is a relatively young mid-sized Canadian city and has been named the country’s top city to start a business. It places second in the nation for tech diversity and first for average salary (wages grew 23% in the five-year period from 2010 to 2015). Hong Kong, China
is home to over 3,184 start-ups and is one of the most well-connected economies in the world. The city is welcoming of foreign investment and is often seen as a gateway into Mainland China.
Lisbon, Portuguese capital has been booming in recent years. In 2017, Portugal’s rapidly growing tech industry raised $350 million in new venture capital. Even established corporate giants are choosing Lisbon. Daimler has launched a new major tech hub, and Google announced the construction of an engineering hub in Oeiras, just steps away from Lisbon’s breathtaking beaches, opening up 500 tech jobs. In 2019, the Harvard Business Review published an article presenting how Qatar is building its own Silicon Valley. Currently, there is a revolution happening in the country Led by Qatar Foundation (QF), a nonprofit organization supporting Qatar’s development through its education, research, and community development initiatives.
Melbourne, Australia is a hot-bed of young, creative talent with nine public universities and over 100,000 university students. The city has over 8,000 tech businesses, contributing to a $34 billion industry that is showing no signs of slowing down. The South African Government has been working to make Johannesburg, the largest and wealthiest city in South Africa, the biggest tech hub on the continent.
Israel, the new Silicon Valley
Tel Aviv has evolved into one of the world’s leading hubs for technology and innovation. Israel’s technology sector is growing faster than any other industry in the country. Innovations emerge particularly in the following subsectors: medical (device patents and medical device solutions), automotive (progressive design technologies), aerospace (Israel is a world leader in UAV production) and cybersecurity (Israel exports $6.5 billion in cybersecurity products every year). Known as Nonstop City, Tel Aviv has the highest amount of startups per capita in the world
14% of Israel’s GDP is spent on research. The strength of research and universities has put the country in a position of competitive advantage. The nanotechnology, big data, cyber security and biotechnology sectors are especially well developed. In addition to the willingness of the Government, major multinationals are increasingly interested in obtaining new technologies from abroad and Israel has become a favoured hub for scouting, This also ensures that investors, private and institutional, find a market rich in opportunities in Israel. It is no coincidence that investments soared to the record amount of 5 billion dollars in 2016 alone. More than 300 multinational high-tech companies have opened research and development centres in Israel.
The state of Israel is regularly called the tech hub of the middle east — Silicon Wadi, to its fans— and the steady stream of investment from abroad explains why. Currently, around 15% of all venture capital investment in cybersecurity goes to Israel, and a recent report from the Israel Venture Capital Research center and ZAG-S&W firm showed that $1.44 billion raised in high tech capital in Q3 of 2017, with the average financing round at $10 million.
For a long time, Haifa, in the north of the country, was the industrial capital and nerve centre of the digital economy. Later, it was supplanted by Tel Aviv and, thereafter, by Jerusalem, where nine start-ups are currently created every year. Today, the number of start-ups in Israel is around 8,000. Waze, Monday and Mobileye – the automated vehicle driving system – are just some of the most famous Israeli start-ups, later sold to foreign businesses.
China’s Hangzhou, Shanghai, Shenzhen and Beijing developing as Silicon Valleys
A Chinese government report put the number of “unicorns” — privately held companies valued at $1 billion or more — in the country at 164 in 2017, a 25% increase from the year before. By some counts, it already has more unicorns than the U.S., although cross-country comparisons are difficult and putting a price tag on unlisted companies is more art than science.
The authorities in Beijing are looking to these new companies to transform an economy that still relies heavily on state-owned enterprises. From fintech to ride-sharing, China’s unicorns are beginning to have an impact on the global industrial order.
Chinese unicorns are concentrated in four cities: Hangzhou, Shanghai, Shenzhen and Beijing. Hangzhou, 180 km southwest of Shanghai has a vibrant small and midsize business scene. Birthplace of e-commerce leader Alibaba Group Holding, the booming city has the third most startups in China after Beijing and Shanghai. New businesses in finance, logistics, big data and e-commerce are constantly popping up.
Shanghai has been at the forefront of China’s economic development since long before “startup” became part of the business lexicon. Although some complain that the city, with its many large enterprises, is risk-averse, only Beijing has more startups.
Shanghai is highly attractive for entrepreneurs looking to scale their startups. The city boasts more than 1000 startups, an innovation-driven development strategy and improved global connectivity. Unlike other tech hubs, gaming is the top industry sector in Shanghai’s dynamic tech environment. The Shanghai gaming sector has a market value in excess of $15 billion. The government supports the startup ecosystem by providing entrepreneurs with a special entrepreneur visa and $4.6 billion in funds. There are more than 5000 angel investors in the city and a venture capital network that includes top players like Sequoia Capital, IDG Capital Partners, and GSR Venture (source).
One of Shanghai’s leading lights is XNode, an accelerator. Earlier this year, it teamed up with the local unit of French spirits maker Pernod Ricard to introduce a sales promotion system using social media. Shanghai Qiniu Information Technologies, which provides cloud-based image storage, is one startup that has achieved unicorn status.
Shenzhen, just north of Hong Kong, was chosen as China’s first special economic zone in 1980. Foreign companies entering the Chinese market via Hong Kong transformed the former fishing village into a trading hub. Now Shenzhen is a center of electronics manufacturing.
“Shenzhen has an ecosystem that enables the world’s fastest development and mass-production design for electronic equipment,” said Junichi Fujioka, who heads Jenesis, a contract manufacturer in the city.
Beijing’s main advantage is its position as a center of innovation and its deep pool of people, goods and capital. It sits atop China’s startup rankings and has a large cluster of IT and other high-tech industries. Its northwestern Zhongguancun district is home to Tsinghua University, Peking University and national institutes such as the Chinese Academy of Sciences. Collaboration between academic institutions and industry has produced many startups.
Xmatix Tech is located at a science park managed by an investment company that was established in partnership with Tsinghua University. Many of China’s leaders in science and technology hail from that university.
The park is one of the largest of around 30 university-affiliated science parks in Beijing. It attracts high-tech companies to its vast grounds, and uses the rent to pull in new startups with ideas and technologies
Hyderabad, and Bengaluru, India’s Silicon Valley
Bengaluru was eighteenth a year ago but moved into the top ten, taking ninth place. Bengaluru and Mumbai (sixteenth on the list) benefit from India’s continued rise in the Global Innovation Index, improving from 81 to 52 between 2015 and 2019.
Bangalore is perhaps one of India’s most globally visible cities, owing to its reputation as India’s Silicon Valley. Bangalore has a combination of startups; IT services firms, R&D centers and Global In-house Centers. This has propelled Bangalore to be fondly called as Silicon Valley beyond leaps and bounds.
Although Bengaluru may still have more deals and tech entrepreneurs, Hyderabad is narrowing that gap, says the BBC News video, produced by Pamela Parker and Medhavi Arora. It also said Hyderabad has been recognized as Indias Best city In terms of quality of Living for the three years in a row 2015-2016-2017 and Bangalore was ranked third in 2017.
With 70,000 square foot building called CatalysT, Hyderabad’s T-Hub is currently India’s biggest startup incubator and recently claimed to become the biggest in the world, by mid of 2020.
Last month, a promising Hyderabad-based startup called Banyan Nation, got global limelight when it was shortlisted for prestigious awards at World Economic Forum. The startup was selected for its proprietary plastic cleaning technology that converts collected plastic waste into near virgin quality recycled granules called ‘Better Plastic’.
Earlier, an another Hyderabad startup, H-Bots Robotics launched the world’s first smart policing robot, which is fully ‘Made in India’, using all the components sourced from within the country.