For years, Silicon Valley has rested pretty knowing it was the king of startups for tech and various other industries. However, research shows technology companies are looking for opportunities outside of the well-known haven and are knocking hard on the competition door … and global cities are answering the call.
Tech startup cultivator Startup Genome shared findings from its Global Startup Ecosystem Report and Ranking 2017, which showed Silicon Valley slipping among top U.S. cities. Culminating in a yearlong research process that included 10,000 startups and 300 partner companies, the research examined cities’ efforts to lift up startups based on eight factors: funding, market reach, global connectedness, technical talent, startup experience, resource attraction, corporate involvement, founder ambition and strategy.
Overall, the U.S. is falling behind in the startup scene to Asia and Europe with places like Los Angeles and Chicago seeking a severe drop in the list. One of the main factors contributing to Asia and Europe’s startup uprising is both countries’ government commitment to support innovation ecosystem growth. Even though the U.S. primarily depends on the private sector for startup growth, this doesn’t mean the U.S. is completely out of the competition as there were seven of its cities in the top 20 startup locations.
Although Silicon Valley is seeing a drop in tech startups due likely to global connectedness, it’s also because startups looking to make a breakthrough can’t afford the typically high salaries associated with the area.
Given global connectedness along with lower costs to market entry, the likelihood of Silicon Valley retaining its top startup spot isn’t looking good unless the city makes a serious effort for long-term nurturing initiatives.
What does this mean for the U.S. in terms of startup proponents?
It may mean that the U.S. government needs to start thinking along the same lines as other countries by putting together a comprehensive long-term startup development plan. If not, it will risk getting left behind in global innovation.