Forget Silicon Valley - The Race Is Now On To Be The Next Silicon Wadi

Those looking to create the next Silicon Valley are missing the point. Americanstartups are now just as likely to spring to life in other cities

By JPOST.COM STAFF
December 10, 2014 14:36
Photo: PR

Forget Silicon Valley. (photo credit: JPOST STAFF)

 
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Such as Seattle or San Diego, as they are in San Francisco. Many simply opt to relocate there. If you want to be in moviesyou go to Hollywood. If you want to be the next Google you go to Silicon Valley.Gentrification is taking its toll, however. If the cost of living was even half as high back in the early days then Silicon Valley might never have happened. 

The Startup Centre Recipe 


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What is the recipe for a great startup location? The first, and arguably most important factor is raw talent, and this is precisely the reason Israel ranks #2 below Silicon Valley. 


The second factor is affordable living. Startups are far more likely to flourish in locations where the cost of living is cheap, to ensure a steadyflow of young, talented people. 


An open and multicultural society that champions free expression is vital, as is a government that provides strong infrastructure and investment, and values innovation. 


A robust economy is also of critical importance, plus a favorable tax rate to stimulate foreign investment. 


Last, but certainly not least, you’ll need plenty of chutzpah. Israeli startup success stories are based on the drive and ambition of young, smart entrepreneurs – something the Silicon Wadi region has no shortage of. Jerusalem is a prime example with hundreds of successful startups and a vast network of co-working collectives laying the foundation for tomorrow’s startup success stories. 


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No wonder then, that while many politicians court votes and investment with promises of building “The Next Silicon Valley” smart nations are instead opting for a more Israeli-inspired approach.


“Silicon Docks” - Dublin


These days you’ll be hard pressed to think of an American technology firm that doesn’t have Ireland as it’s European headquarters. The first wave of US tech firms came for the generous corporate tax breaks, but they stayed for the brainpower. This is because Ireland, like Israel, is a small country of limited resources and therefore emphasizes raw talent as its primary incentive. 


The Irish government is investing heavily in creating domestic startups, while investors from the US and elsewhere recognize Ireland as the next big thing.  




The change has been dramatic. Ireland was hit hard by both a domestic property bubble and the global recession simultaneously and is now clawing its way out of EU austerity. Today the Dublin docklands, nicknamed “Silicon Docks”, plays host to play host to Google and Facebook, among other tech and VC firms. 


Word travelled fast, prompting a second wave of expanding startups, including Dropbox, Hubspot and New Relic, to establish their European operations there.Dublin’s reputation as a party town helped too, its unique character proving irresistible to Valley hipsters. 


Once derelict and decrepit, the docklands area was symbolic of Ireland’s economic downfall. Now the new tech zone is facing an office space crisis. Ireland’s financial woes are far from over, but the small nation shows remarkable resilience and scores full marks for chutzpah. 


“Silicon Allee” – Berlin


The two largest contenders in the battle for Europe’s top startup city are London and Berlin. While mayor Boris Johnson would rather it be called Tech City, London’s prime tech hub is instead known by the typically British moniker “Silicon Roundabout”. As a thriving financial and cultural center, London has no shortage of talent, but it looses out to Berlin as a startup center due to its high cost of living. 


Berlin is considerably cheaper and combines robust infrastructure with a multicultural, tech-savvy populous. It appeals to young people and exudes a punk aesthetic that flies in the face of traditional German conventionalism. 


While German culture generally favors caution over recklessness, newBerlin understands that fortune favors the brave. It is a city once divided by ugly conflict, but united through spirited rebellion.


Hot startupsinclude social/mobile games developer Wooga and 6Wunderkinder, creators of the popular productivity app, Wunderlist. 


Currently Berlin’s most exciting startup is music streaming site SoundCloud, founded by Eric Wahlforss and Alex Ljung. The two Swedes were attracted to Berlin as much by its hip aesthetic as its low costs and high standard of tech workers. They’re not alone. 


Entrepreneurs the world over are flocking to Berlin to found startups, including many Israeli nationals. These newcomerstypify new Berlin; a thriving metropolis that abominates its past and celebrates multiculturalism with an enthusiasm that’s rarely matched elsewhere in Europe. 


“Silicon Cape” – Cape Town


Berlin is not the only city that’s actively seeking redemption through multiculturalism and startup incubation. Cape Townis not only a symbol of the post-apartheid “Rainbow Nation”, it’s also fast becoming the Israel of Africa with startups and incubators such as the The Silicon Cape Initiative and Google-sponsored Startup Grind.


Popular industries include gaming, ecommerce and mobile payments with many companies getting snapped up by global players, while new startups keep materializing to fill the void. 


It’s easy to see the appeal of Cape Town, with its warm climate, breath-taking scenery, affordable living, bustling nightlife and plenty of outdoor activities. It’s also a university city, with no shortage of talented and highly educated young people with a hunger to succeed. 


Residents are fiercely proud of their nation’s dramatic reinvention and are eager to challenge conventional wisdom by positioning South Africa, and the continent as a whole, as a thriving, modern, high-tech economy. If the level of outside investment is anything to go by, it’s clearly working. 


“Silicon Rock” – Gibraltar


Israel has long been a global leader in multi-billion dollar online gaming industry, in particular Tel Aviv, which represents a major logistical center for online gaming. Israelis have also founded many of the gaming industry’s most successful companies, such as 888 Casino, who, like all the industry leaders, are now based in Gibraltar. 


This tiny British territory on the southern tip of Spain is prosperous and multiethnic, with a thriving and influential Jewish community dating back centuries. In recent times it has benefited enormously from both the online gaming sector and Israeli investment, and so naturally looks to Israel for inspiration. 


In addition to being host to all of Europe’s major online gaming companies, new companies are beginning to emerge that champion the Israeli-styled startup model, such as Lottoland, poster child of the new “Silicon Rock”. 


The government, meanwhile, is doing its bit to fast-track development and encourage further investment. As of 2015 the new World Trade Centre Gibraltar will open serving as a home to top multinationals like JP Morgan, Vodafone, Apple and Shell. 


With a robust economy, favorable climate, a welcoming government and a highly competitive tax structure tech companies and investors of all recognize Gibraltar as the next big thing in startups.


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