A recent report by pre-seed investor, Techstars, titled: “Techstars 2023 State of Innovation Survey”, revealed that Silicon Valley’s influence is expected to decline over the next five years despite being viewed as the most innovative global hub today by entrepreneurs and VCs.
The survey included responses from over 1,600 current, past and aspiring entrepreneurs and venture capital investors on their views about innovation on their home turf and around the world.
Irrespective of concurring with Silicon Valley Bank’s innovation, when the same individuals were asked which hubs will be the most innovative in five years, the majority gave a negative response, with just 45% agreeing this time, compared to 65% earlier.
Maëlle Gavet, CEO of Techstars said: “Against a backdrop of ongoing market flux, the results of our survey reflect the shift away from traditional U.S. dominance of innovation, towards a multipolar age in which tech entrepreneurship flourishes globally – a trend which is underscored by our respondents’ conviction that Africa will leapfrog Western Europe this year by producing more startups.”
“With today’s investors being able to source deal-flow worldwide and entrepreneurs able to build global businesses from anywhere, it is not surprising to us that we are seeing the potency of a single technology hub, such as Silicon Valley, recede. The results of our survey reaffirm that outstanding entrepreneurial talent is thriving all around the world, and also that innovation requires the support of an entire ecosystem.”
Key findings from the survey results include:
Regions: The majority of entrepreneurs and VCs surveyed (51%) consider Asia-Pacific (APAC) to be the most innovative region outside of the U.S. today, suggesting that APAC could soon challenge the historic dominance of the U.S.
Sectors: Nearly half of the entrepreneurs and VCs we surveyed predict that five years from now, HealthTech (51%) and Sustainability (44%) will be the two most innovative fields, indicative of the way founders are increasingly pursuing many of the biggest challenges of our era – from health and longevity to climate change and food resilience.
Firestarters: Innovation takes an ecosystem. Only one-quarter (26%) of respondents believe that VCs and angel investors will be the biggest driver of innovation over the next five years, with no single force or influence – such as governments or corporates – emerging as the dominant factor.
Founders’ Attitudes: Companies have been staying private for longer, and our survey confirms this trend with more than one-quarter (28%) of entrepreneurs saying their long-term goal is to remain private/independent. By comparison, just 16% are targeting an IPO and 7% are targeting an acquisition by private equity.
“Looking ahead, we expect competing forces to shape the innovation market in the coming months. The collapse of Silicon Valley Bank, and subsequent fallout, has made what was already a tight fundraising environment even tighter. Unable to fundraise or raise venture debt, some founders will simply run out of road.
However, conversely, the wave of layoffs across the tech industry will help create a boom in early-stage innovation, as significant numbers of laid-off workers become entrepreneurs. We are also seeing increasing numbers of applicants to our programs tackling some of the biggest challenges of our lifetimes in areas such as HealthTech, Sustainability and the resilience of food supply,” added Gavet.
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