Silicon Valley and San Francisco have long been the world’s epicenters for tech innovation and one of the largest startup cities anywhere, generating some of the world’s most successful tech companies. It’s still home to the globe’s largest tech titans—but it can no longer lay claim to being the world’s most innovative city. 2thinknow’s 2018 rankings of the world’s most innovative cities revealed that Silicon Valley (namely the San Francisco metro area) had been dethroned as the world’s most innovative region, with Tokyo replacing the United States’ west coast innovation giant. Silicon Valley still ranks well—though other cities across the globe are beginning to emerge as some of the world’s most innovative hotspots.
Emerging Innovation Epicenters
Tokyo’s first-place position wasn’t just a shift in city rank; it was also the first time an Asian city took the top spot. 2thinknow’s Innovation Cities found that Tokyo’s ascension was the result of high rankings across the 162 indicators used to measure cities’ innovation outputs. Specifically, Tokyo’s focus on applied technology towards addressing urban issues helped propel it to the top position; 2thinknow’s Director Data, Christopher Hire, stated in a media release that “They showed clear direction by embracing smart technology change to lead innovation. . .”
But it isn’t just Tokyo that’s rising to the forefront of global innovation: Sydney rose in rank four places, Chicago by nine, Melbourne by nine, Austin leaped 18 spots to number 29, edging out Scandinavia’s innovation hub, Stockholm. And though the United States’ collective city rankings help it remain the global leader in innovation (thanks in large part to population, investment, and a well-established foundation and history of ingenuity), innovation hotspots across the globe are inching ever closer to top spots.
Innovation Rising in Startup Cities—and College Towns
The Center for American Entrepreneurship’s (CEA) Rise of the Global Startup City rankings found “a substantial globalization of startup activity and venture capital” across the board. It found that the top six cities that receive the most venture capital investment—San Francisco, Beijing, New York, San Jose, Boston, and Shanghai—make up over half of the globe’s venture capital investment—and four of these cities made up over half of venture capital investment growth over the last half-decade.
In terms of percentage, lower-ranked and emerging dominant cities are experiencing the most growth in venture investment, most of which are located in Asia. The United States, on the other hand, saw only nine of its cities break into the top 50; APAC led the way with 19, Europe with 16, and EMEA and LATAM each with three. But when looking at investment dollars per capita, the United States significantly surpassed other global cities—and not just in major population centers; CEA found that U.S. and UK college/university towns—Boulder, Durham, Oxford, and Cambridge—were included in the top ten alongside population-dense cities San Francisco and Beijing.
“The Rise of the Rest,” and Getting There with an Experienced Partner
It may come as no surprise that the term “the rise of the rest” originates from the United States, as Silicon Valley and east coast cities have long been innovation epicenters—but “the rest” is rising quickly, and doing so on a global scale. CEA’s data shows that “the rest” are bucking the notion that successful startups and scaleups must originate from the U.S. Indeed, if CEA’s and 2thinknow’s data offer any indication, innovation hotspots will continue to emerge and grow outside of the United States’ borders—and its influence.
For organizations that are looking to these and other regions as part of their global expansion, taking the first step with an experienced partner makes all the difference. Velocity Global’s International PEO (Professional Employer Organization) solution has helped hundreds of businesses expand overseas quickly, compliantly, and without entity establishment. Are you ready to tap into some of the world’s most innovative locations? Let’s make it happen.