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THE FIVE MOST PROMISING STARTUP CITIES IN EMERGING MARKETS
These Cities Have the Ingredients to Become The Next Silicon Valley
When asked to name the world’s startup capitals, people normally think of Silicon Valley, London or New York. But with innovation on the march globally, the emerging markets have strong potential to become the next hotspots for entrepreneurs.
According to World Bank data, there are now more than 90 tech hubs across Africa. Regions such as South East Asia have also caught the eye of both investors and intrepid entrepreneurs. The following five most promising tech cities in emerging markets have all the right ingredients to become future startup capitals. It may only be a few years before we see the next entrepreneurial hub emerge from Asia, Africa or Latin America.
Medellin – Colombia’s cultural capital city – was named 2012’s innovative city of the yearby the Wall Street Journal Magazine and Citibank. The appearance of Colombia’s second biggest city has changed dramatically during the past 20 years. Public libraries, parks, schools and museums – as well as a series of transportation links from the suburbs to the center – have been built. The Grupo Empresarial Antioqueño, an accumulation of Medellín-based companies, now generates seven percent of Colombia’s gross domestic product. Leaders such as Diego Angel, creator of Angel Studios and a role model in the Medellin startup scene, help young entrepreneurs to found startups in order to support the city’s fast-growing tech scene.
Across the Middle East, entrepreneurship is on the rise. Amman, the capital city of Jordan, is the leading startup hub in the region. Trying to fill its natural resources gap with human capital, the government has invested in infrastructure, education and also reformed regulations, meaning Jordan is now one of the easiest and cheapest regions to register a business. The outcome is the best Internet connectivity in the Middle East, as well as good universities producing many young, skilled entrepreneurs. Women in the workplace is still a controversial topic in the Middle East. Although over half of the region’s university graduates are women, only one fifth can find a job in the market. One key benefit of online startups is the opportunities they create for women at work. One of the most successful startups in Amman is Zaytouneh (“olive” in Arabic). It was founded by Fida Taher and offers videos on how to cook by only showing the ingredients and the hands of the cook.
Since 2012 there has been a massive shift in the Pakistani startup scene. Lahore, Karachi, and Islamabad – the three major cities – have become home for many new startups in Pakistan. Lahore, the capital city, is especially interesting because of its urban development, adding industrial areas, new university campus and airport to the cityscape. The strong infrastructure has helped to create a dynamic market for startups, with many incubators launching fascinating business ideas. With the young population – two thirds is under 30 – of the country as well as strong support from the government, Lahore has potential to be one of the most innovative startup hubs in the world. Big companies such of Microsoft already have their eye on the country, with the tech giant hosting a Windows phone hackathon in Lahore last year.
The largest city of Indonesia, Jakarta is also known as one of the biggest megacities in the world. One skyscraper after the other keeps rising into the sky of Jakarta, showing the massive demand for space. The country’s growing middle class keeps flocking into the city,bringing with them a strong purchasing power, high penetration of mobile phones and an enormous demand for online service – presenting plenty of opportunities for new business ideas. The outcome is a strong market for tech startups to explore. Although there is no government funded support, more and more Indonesian investors including Merah Putih Incubator, GDP Venture, East Ventures and GREE Ventures are entering the market. Solving the upcoming challenges caused by the city’s fast growth means startups have to be practical, because they need to pay off since day one. For this reason, Jakarta is home to a number of startups focusing on travel, e-commerce and lifestyle, including property portal Jumia House which launched locally in late 2013.
Nigeria has now taken the lead as the largest economy on the continent. Lagos, the most populous city with over 20 million people, illustrates the country’s strong economic development. It is the second fastest growing city in Africa and the seventh in the world. One reason for its success over the past decades is the fast growing tech startup scene, especially in Yaba, a suburb in the port of Lagos. Residents have nicknamed the area Yabacon Valley because of its likeness to Silicon Valley. In Yabacon Valley you can find the financial and banking center of Nigeria, several education institutions as well as a cluster of technology startups. An unique place for high-tech innovation and development, buoyed by the country’s growth, the middle-class affinity towards technology and massive online population of 45 million Internet users. No wonder coworking spaces and events pop-up in Lagosattracting many angel investors, venture capitalists and entrepreneurs.