Although many American cities have long been home to thriving technological ecosystems, high-tech startups are expanding beyond the US and are growing significantly across the world, according to the report Rise of the Global Startup City.
The Harvard Business Review analysed more than 100,000 venture deals across 600 countries and found that startups have truly gone global. The report highlights four transformative shifts:
- Expansion: In the past decade, the number of global venture deals has risen 73%, with the amount of capital increasing by 23% – historical records that look set to grow.
- Globalisation: The US no longer holds the monopoly on venture capital. The study found that its share has dropped to little over half since the 1990s, with a dramatic growth in startups registered across China, India and European countries.
- Urbanisation: Startup and venture capital activity is leaving suburban areas and is now concentrated in some of the world’s largest cities. Metropoles such as Beijing, New York and London accounted for more than $100 billion in venture capital investment (over 60% of the total) on average between 2015 and 2017.
- Winner-Take-All Geography: Venture capital investments are highly concentrated in specific areas. The leading cities are pulling away from the rest, accounting for almost half the global total.
These transformations have substantial implications on how leaders develop innovation and capture talent. The main takeaway is that it is more important than ever for entrepreneurs, venture capitalists and managers to broaden their horizons, and think and act globally.