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Tel Aviv is the world’s best city for startups after Silicon Valley

  • Richard Florida
By Richard Florida

Urban studies theorist

Published Last updated This article is more than 2 years old.

Silicon Valley is the world’s unquestioned leader in generating high-tech start-ups that launch new technologies that change the way we live and work. Many cities around the world have tried to emulate its success. But until recently, the data has been lacking to calibrate and rank how far they have come.

A new report from the Startup Genome, compiled in association with Telefónica Digital and researchers at Stanford University and the University of California, Berkeley, rates and ranks the cities with the leading start-up ecosystems across the world. Their research draws from their online interactive tool, Startup Compass, which collects benchmarking data from over 50,000 entrepreneurs and start-ups across the world.

The report uses several external data sources as well, including data from CrunchBase, AngelList, Global Entrepreneurship Monitor, Numbeo, TechAccelerators, and Seed-DB. It also includes insights gleaned from over 50 interviews with leading entrepreneurs and venture capitalists. Ultimately, it rates and ranks start-up ecosystems in global cities across the following key dimensions:

  • Start-up Output: The total activity of entrepreneurship in the region.
  • Funding: How active and comprehensive the risk capital is in a start-up ecosystem.
  • Performance: The performance and performance potential of start-ups.
  • Entrepreneurial Mindset: The degree to which founders are visionary and resilient.
  • Trendsetting: The speed of adoption of new technologies, management processes, and business models.
  • Support: The quality of the support network, including mentorship, service providers and types of funding.
  • Talent: Based on the key characteristics of founders.

The chart below (from the study) lists the cities which make up the world’s 20 leading start-up ecosystems.

Not surprisingly, Silicon Valley tops the list. Tel Aviv is second — the only non-U.S. city in the top five. There are six U.S. cities in the top 20. Los Angeles is third, Seattle fourth, New York City fifth, Boston sixth, and Chicago 10th. Three Canadian cities make the list — Toronto eighth, Vancouver ninth, and Waterloo 16th. London is seventh. Paris, Sydney, São Paulo, Moscow, Berlin, Singapore, Melbourne, Bangalore, and Santiago round out the top 20.

The report also identifies 20 “runner-up cities” (listed in alphabetical order).

  • Amsterdam
  • Atlanta
  • Austin
  • Barcelona
  • Buenos Aires
  • Cape Town
  • Copenhagen
  • Dallas
  • Denver
  • Dublin
  • Helsinki
  • Istanbul
  • Johannesburg
  • Madrid
  • Mexico City
  • Milan
  • Montreal
  • Mumbai
  • Philadelphia
  • Portland
  • Rio de Janeiro
  • San Diego
  • Warsaw
  • Washington
  • Zurich

The report notes the influence of Silicon Valley across the global start-up system — not just in terms of its influence as a model but in creating and developing top entrepreneurial talent. Roughly a third of start-up founders in Singapore and Waterloo, Canada have spent considerable time in Silicon Valley. This is in line with the findings [PDF] of University of California, Berkeley’s AnnaLee Saxenian, who finds that Silicon Valley inlays a key role in the global “brain circulation,” of start-up talent, providing experience and added value to foreign-born technologists and founders who later return of their home countries to build businesses.

While much more research and data is needed to develop more systematic rankings and comparisons, the report provides a useful first step in identifying start-up communities around the world that can be used to orient and structure future more detailed studies.

This originally appeared on The Atlantic Cities. Also on our sister site:

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