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Asian Countries are Heading Past the US in Gaining Entrepreneurial Edge China has gained the most ground, attracting nearly a quarter of global venture capital investment in recent years

By Komal Nathani

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You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.

The world's technology capital takes over Silicon Valley by gaining its entrepreneurial edge. A study conducted by the "Centre for American Entrepreneurship" and "NYU's Shack Institute of Real Estate" reveals that the US is losing the first spot of always being the tech capital as the Asian countries gain its competitive edge over the US. While some of the Silicon Valley's unicorns are witnessing a decline in the global dollars invested, Chinese startups are working to improve their own country's economy.

"While the U.S. continues to generate the largest amount of startup and venture capital activity, its share of the global total has fallen significantly, from more than 95 per cent in the mid-1990s to more than two-thirds in 2012 to a little more than half today. Among other nations, China has gained the most ground, attracting nearly a quarter of global venture capital investment in recent years," states the study.

The report adds that China has gained the most ground, attracting nearly a quarter of global venture capital investment in recent years.

With India and the United Kingdom top the share in the most global venture, a capital investment with nine per cent alone, Germany, France, Israel and Singapore, Sweden, and Japan collectively contribute another nine per cent to the global total.

Global Cities v/s Chinese Cities

While the US still accounts for a major contribution in venture cash, which is about half of the $171 billion invested globally in 2017, the study says, it has declined by more than 95 per cent from the early 1990s.

The country that is surging ahead with full force in China. The report says, "Beijing tops the list of cities that in the last half decade have shown the biggest increases in attracting venture dollars, accounting for 21 per cent of venture capital investment growth. San Francisco accounted for 16 per cent of the growth, and New York 7 per cent."

"The notion that successful startups must launch and scale in Silicon Valley or another leading American city no longer holds true," Ian Hathaway and Richard Florida wrote in their study, compiled for the Center for American Entrepreneurship, a research group based in Washington. "Increasingly, the world's high-tech entrepreneurs are able to stay in their home city or nation and raise venture capital," Hathaway adds.

Asia – The Next Frontier for Impact Investors

In the last three years, Southeast Asia has become a hotbed of investments for venture capitalists around the globe. This year's annual survey of Global Impact Investment Network (GIIN) shows forty-four per cent of the survey participants want to increase their allocations to Southeast Asia this year, which was higher than that of any other region.

Asia has seen a massive investment in the past three years, which leaves behind the USA's Silicon Valley in the race. For example, late last year Beijing-based Didi Chuxing, a ride-hailing service, raised $4 billion from Japan's SoftBank Group Corp. and Abu Dhabi's Mubadala Capital.

The study by "Centre for American Entrepreneurship" also states, over the last decade, San Francisco startups won the most investment dollars $81.8 billion. But Beijing area startups came close behind at $72.8 billion, and New York ranked a distant third with $33.8 billion, followed by San Jose, California; Boston; and Shanghai, all of which attracted close to $25 billion.

Komal Nathani

Former Correspondent, Entrepreneur Asia Pacific

A firm believer of hard work and patience. Love to cover stories that hold a potential to change the momentum of business world. Currently, a part of all-women web team of Entrepreneur’s Asia Pacific edition to jig the wheel of business journalism!


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