Relax. There Is No Other Silicon Valley in Sight
Something is changing though.
Silicon Valley is the global epicenter of innovation. We don’t need a report to state that. With that being said, there are some questions that need proper data to be answered.
• How large is the gap between Silicon Valley and the rest of the world?
• Will there ever be another Silicon Valley?
• Is Silicon Valley losing its edge?
• What are Silicon Valley’s tech bets?
In seeking to answer these (and other) questions, Mind the Bridge dug even deeper into the Crunchbase database to try and collect more data points and trends. The result is our new report “Tech Scaleup Silicon Valley” which was presented on September 15th at the Opening of the Scaleup Summit, San Francisco. The extended benefit is represented by the fact that we have adopted the same methodology to map all other world ecosystems. The outcome is the possibility to benchmark all of the world’s ecosystems with Silicon Valley and track evolution patterns.
Here some report highlights:
Silicon Valley confirms its supremacy as the world’s disruptor.
Silicon Valley hosts 7,894 scaleups. Elsewhere, it takes an entire continent or country such as Europe or China to provide similar figures. Silicon Valley has about 5 times more scaleups than Israel (the so-called “Startup Nation”).
The gap is even wider in terms of investments. Scaleups headquartered in the Bay Area raised $501.3B in capital, which is about half of the total capital made available to US scaleups. This is about 2.6 times more than the amount raised by their European counterparts ($195.5B) and 1.1 times higher than China ($468B).
Relax. There is no other Silicon Valley in sight.
The tired narrative of ‘the next Silicon Valley’ has become outdated. Planners from all over the world trying to replicate the success of the Bay Area had limited success. No ecosystem realistically has the possibility to close the gap with Silicon Valley and reach the density levels of the Bay Area. That said, as Sam Altman points out, there will be likely 30+ clusters in different places able to get beyond critical mass.
Are startups leaving Silicon Valley?
More and more tech startups are leaving California. Behind this choice, are several factors: the first being the insane cost of living. Large companies have made the leap as well.
Does it mean that a democratisation of tech hubs is taking place across the US? Although New York, Los Angeles County area, Boston and Cambridge, Austin (and Texas in general), Seattle, Atlanta, Chicago, and the North Carolina tech triangle have all emerged as alternative centres of innovation, our data confirms
that the Bay’s dominance still looks formidable. Investments in Silicon Valley scaleups are 4.9 times higher than in New York, about 7 times more than in LA, 10+ times more than Boston/Cambridge and Austin, and 30+ times more than the other hubs.
Tech trends? More deep and transversal
Silicon Valley tech scaleups are increasingly focusing on the development of deep, cross-cutting technologies and becoming more vertical-agnostic. Looking at the recently founded fast growing scaleups, 25% develop Artificial Intelligence technologies. Security, Cloud, and Blockchain do follow. Predominant areas of application are Health, Finance, Mobility and Energy.
Alberto Onetti, Chairman, Mind the Bridge
Genè Teare, Senior Data Journalist & Research Lead, Crunchbase