Atlanta Gives Startups Great Odds To Thrive, Report Finds

When it comes to startup success, Silicon Valley gets all the glory. The area is home to Apple, Google and Facebook, which you may have heard of, and even inspired the eponymous TV show, “Silicon Valley,” on HBO. But while the world fawns over the Bay Area, a new report found that Atlanta also has one of the best startup ecosystems in the world.

Startup Genome, a company that aims to help cities better support startups through data-driven strategies, last week released its “Global Startup Ecosystem Report 2019,” ranking the 30 best startup ecosystems in the world.

Atlanta ranked 26 in the world, the report found, just ahead of Barcelona and behind Hong Kong. The rankings were based on metrics in nine “success factors”: performance, funding, market reach, talent, experience, connectedness and knowledge, all of which are explained below. The researchers placed cities into a tier for each category, with first tier representing the best.

Here are the tiers for Atlanta:

• Performance: 5th
• Funding:5th
• Market Reach: 4th
• Connectedness: 5th
• Talent: 2nd
• Experience: 4th
• Knowledge: 5th
• Growth Index: 4

Silicon Valley and New York City were, perhaps unsurprisingly, ranked as the top two startup ecosystems in the world, with the former holding the top spot since 2012. Boston ranked No. 5 and Los Angeles tied for 6th. Here are the overall ranks for every American city:

1. Silicon Valley
2. New York City
5. Boston
6. Los Angeles
12. Seattle
16. Austin
17. Chicago
19. Washington, D.C.
20. San Diego
21. Denver-Boulder
26-30 range. Atlanta, Miami

To put it plainly, the rankings mainly show which cities have ecosystems where a new startup has the best chance to become a global success. The company defines a startup as a temporary organization looking for a repeatable and scalable business model.

In that regard, North America “continues to dominate,” the report said. The continent is home to 14 of the top 30 startup ecosystems and a dozen of those are in America alone.

The global startup economy is expanding and created about $2.8 trillion in value between 2016 and 2018, the report said. That’s about 20.6 percent more than the previous period and more than double what it was five years ago.

The list of largest corporations worldwide is now dominated by tech companies. In 2008, Microsoft was the lone tech company to make the list of the 10 largest companies across the globe. Today, seven of the 10 largest companies are tech-based, and three of them are in Silicon Valley.

Interestingly, nearly half of startups being created are in sectors related to “deep-tech.” This includes industries such as advanced manufacturing and robotics, blockchain, agtech and new food, artificial intelligence and big data and analytics.

And perhaps just as importantly, while Silicon Valley was home to the biggest winners in the last decade, the next big winners will likely be somewhere else.

“While the reigning generation of tech ecosystems came largely from innovations in silicon microchips and the internet, the next 30 will start from that foundation but ultimately grow from completely different innovations,” the researchers said. “Deep Tech will be a key part of that.”

The overall global ecosystem rankings were developed using a weighted average of the factor scores. Performance accounted for 30 percent of the rank — more than any other category — followed by funding at 20 percent and market reach and connectedness at 12.5 percent each.

The performance category attempts to capture indicators of ecosystem success. Funding looks at measurements that are key to the success of early-stage startups while market reach consists of metrics related to how much access early-stage startups have to customers, which will allow them to scale up and grow internationally. The connectedness category, meanwhile, assesses how well each ecosystem is connected to the “global fabric of knowledge” as well as within the local ecosystem. Talent tries to evaluate the ability of the workforce that startups have access to while experience tries to capture the degree of startup experience in an ecosystem and how much founders preach practices that are known to lead to success. Lastly, knowledge looks at indicators such as patent volume and complexity.

Patch national staffer Dan Hampton contributed to this report.