Helsinki
Helsinki is the capital of Finland and is quickly emerging as a technology startup hub. Helsinki has always had a reputation as one of the most educated workforces in the world, a key ingredient for technology startups. The country has made startups a priority, and while the venture capital market is small compared to Berlin or London, the combination of government support and venture capital is providing the needed money. The location means Helsinki is less than an 8-hour plane ride to New York and has easy access to Asian markets. While small, it has already had an impact. Forbes reported that Finland was home to 10% of all startup exits in the world, and in 2017, Helsinki had more than 500 startups alone.
Tel Aviv
Silicon Wadi, a pun on Silicon Valley in California, is a local term for the area in Israel where there is a concentration of high-tech companies. “Wadi” is an Arabic word for “dry riverbed or valley.” Tel Aviv, which is part of Silicon Wadi, is where there is a large number of high-tech companies, and it is being recognized as a sister city of Silicon Valley. In 2019 according to IVC (www.ivc-online.com), Israel raised $8.3 billion in venture funding that was spread over 522 deals. To put this in the proper perspective, Israel ranks second in availability of venture capital next to the U.S. Israeli-based companies are common acquisition targets for the major Silicon Valley companies that have become household names, such as VMware. Israel, as a nation, is committed to education, and institutions such as the Weizmann Institute of Science and Technion (the MIT of Israel) consistently place in the top 100 of world universities—not an easy feat for a county that is little more than 70 years old. For every 10,000 employees, Israel has 140 scientists and technicians—one of the highest ratios in the world. This is substantially more than Japan or the U.S. With more than 200 days of sunshine, a huge pool of STEM (science, technology, engineering, and mathematics) talent, world-class educational institutes, and vibrant venture capital community, it is no wonder that this is considered the tech hub of the Middle East. This is why Tel Aviv has earned our recognition as a sister city of Silicon Valley.
Other Cities
Throughout EMEA, there are many other cities that are worthy candidates for this elite list, and we are certain readers will make passionate arguments for their inclusion. These include cities such as Walldorf/Heidelberg in Germany, the home of the ERP giant SAP, which is arguably the world’s most important tech-related business. Also in Europe, there is Eindhoven and Rotterdam/The Hague in the Netherlands. Africa has a couple of candidates as well. Investors from Silicon Valley are flocking to Cairo, since the combination of an inexpensive, highly educated workforce far outweighs diminishing fears of political instability. Finally, there is what many consider the miracle of the 21st century: Kigali, Rwanda. Twenty years ago, Armageddon seemed to be the tone of a nation that history would try to forget. However, far exceeding the proverbial phoenix rising from the ashes, Kigali’s youthful and aggressive population, driven by the survivors of genocide, has brought that city to global recognition with innovation and aspiration.
Let’s consider these last cities for honorable mention but with the caveat that we remember that the spirit of Silicon Valley has driven change and the creation of wealth faster than any force of nature that has appeared since the Medicis more than 600 years ago created the model for Western civilization’s finance that we now call free enterprise. It is uncertain for now how the positions on the list of the cities of Silicon Valley may change, but what is clear is that the list will continue to grow.
Key Takeaways
Money is mobile: There are a few lessons to be learned from this. Money is a mobile resource that will go where it has the highest potential to create the most significant return for its investors. For this reason, at each of these locations, an essential ingredient to success is active venture capitalists. While Dublin and Helsinki are far behind the others in the amount of venture capital available for new ventures, both governments have stepped in with favorable tax treatment and provide additional capital to help fuel this success in attracting and nurturing startups.
Connectivity: With the internet came the creation of inexpensive and secure connectivity, making new approaches to conducting business possible. Each of these cities is highly connected and has clusters of technology companies able to feed off of each other’s energy.
Education: Each of these cities has strong ties to education. A necessary ingredient to fuel innovation is an educated workforce. An added benefit is the natural diversity that happens at any major university. Each of these cities offers a high quality of life and is a place that people want to live in or near, making it easier to attract and retain people who have recently graduated from the local universities.
Globalization is here to stay: No nation or continent has a lock on talent or capability. It is possible to replicate many of the factors that enabled Silicon Valley and its success. From each of these locations, the next technology could emerge that makes the world a safer and better place.
Photo by Mario Gogh on Unsplash