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StartupBlink has released its annual Startup Ecosystem Index report highlighting the strengths of countries and cities in relation to technology. And while Israel hasn’t moved in its overall ranking, its new score shows that the small country is catching up with the UK – second place behind the US While the US has a big lead (124,420), the UK and Israel are separated only by a dot, with 28.719 and 27.741 respectively. Overall, the ranking of the top five places – the United States, the United Kingdom, Israel, Canada and Germany – remains unchanged from 2020.
Last year, the UK had a relatively large lead over third-ranked Israel, but that difference has now narrowed substantially with the UK and Israel having nearly the same total score, the report confirmed. Scores are determined by three main ingredients: Quantity, referring to the number of startups, coworking spaces or accelerators; Quality, presence of research and development centers, presence of unicorns, or branches of multinational companies; and Business Environment, which takes into account things like internet speed, internet freedom, and English proficiency.
Photo: Shutterstock 2021 saw Israel’s success attributed to strong performance in quality and quantity scores, even surpassing the UK in quality and now ranks second in the world after the US. From 16th in 2020 to 25th this year mainly due to its infrastructure and regulation.
The report also highlighted Brexit as a major factor in bridging the gap between Israel and the UK. In the post-Brexit world, the UK, represented almost entirely by its dominant ecosystem, London, faces the challenge of preserving its status as a leading global hub … Although Brexit has arguably done more harm than good to the local ecosystem of startups, there are numerous examples of regionally disconnected countries creating strong startup ecosystem environments outside of country unions.
The StartupBlink report also ranks cities within countries, helping to determine the effect local startup hubs have on their regions as a whole. London, which saw a slight exodus of companies after Brexit, saw its global rankings drop from third to fifth in a year, with Tel Aviv also dropping one place to eighth. Notably, Beijing climbed 14 places from 17th to third in just two years.
Jerusalem moved up one place to 54, and Haifa moved up 24 places in one year to reach 119th place. Beer Sheva dropped 39 places from last year to 238th place worldwide.
Many countries try to copy Israel’s innovation model, but this ecosystem is difficult to replicate, the report concludes. It is based on entrepreneurs who by nature take risks and on a geopolitical situation that encourages innovation as a fundamental requirement for survival. In 2020, StartupBlinks CEO Eli David called the Israeli IDF one of the largest accelerators in the world.
The Startup Ecosystem Index Report is updated annually and ranks 1,000 cities and 100 countries based on hundreds of data points from partners like Crunchbase, Meetup, Semrush, and others.
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