The tech world used to be synonymous with Silicon Valley. But while the region is still dominant, technology ecosystems have spread around the world, and the Asia-Pacific region is reported to be developing strongly research by startup genome. The story is decades in the making, but Startup Genome's data illustrates the democratization of tech ecosystems or regions with many tech startups and the infrastructure to make them viable.
This democratization is most evident in the Asia-Pacific region, which now accounts for 30% of global technology ecosystems, compared to only 20% in 2012. In addition, in 2013 only four ecosystems produced unicorns (startups with billion dollar exits). Today, more than 80 ecosystems have done this. These ecosystems contribute enormously to economic prosperity. Overall, the global startup economy is valued at nearly $ 3 trillion, a figure that is on par with a top G7 nation. Silicon Valley's tech ecosystem is worth $ 677 billion, compared to $ 92 billion for London and $ 47 billion for Tel Aviv.
Seven of the world's ten leading companies are active in the technology sector, and in 2019 nearly $ 300 billion in venture capital investments were made worldwide, startup Genome said. Seoul and Tokyo have risen to the top 20 among the top ecosystems. Washington, DC posted the largest growth with eight positions, and Seattle and Amsterdam Delta both advanced three positions. Berlin and Bangalore saw the largest declines, but remained in the top 30. China has four cities in the top 30: Beijing, Shanghai, Shenzhen and Hangzhou. Sydney and Melbourne are runners-up.
However, the current economic downturn poses enormous challenges in addition to the systematic inequalities that already exist. Only 14.1% of the founders are women. And 74% of all produced values are concentrated in only 10 of the top cities. Since COVID-19, 60% of startups have cut salaries or fired staff. Startups that fired employees cut 33% of their employees on average. Overall, 71% of startups cut costs in some way. And four out of ten startups only have enough money to last three months or less. Startup Genome warned that the pandemic could trigger "mass extinction".
Demand for goods is also affected: 72% of startups have seen a drop in sales since the onset of the crisis, and the average startup has seen a 32% drop in sales. The report found that nearly 40% of companies experienced a 40% or more decline in sales during the pandemic. However, the tech economy will be critical to the economic recovery, as new jobs are typically created by young companies. Startup Genome also found that more than 50 unicorns were created in the 2008 Great Recession.