Could Tel Aviv or Berlin become the next Silicon Valley? Cities worldwide are thriving thanks to their tech scenes.
- Silicon Valley may be the world's largest tech hub, but it's not the only one.
- From Tel Aviv to Stockholm, several global cities have come to be shaped by booming tech industries.
- Many of these startup scenes are attracting young workers and creating a new wave of wealth.
- Visit Business Insider's homepage for more stories.
Move over, Silicon Valley — cities across the globe are vying for a spot as the world's leading tech hub. Several have even been called "the next Silicon Valley" or dubbed the Silicon Valley of their country or region.
Major cities like London and New York have witnessed growing tech sectors, while others, like Sydney, are undergoing government plans to become their own Silicon Valley. While it seems that many big cities these days are turning into tech hubs, only a few are truly being defined by their tech industries.
Many of these flourishing tech hubs are not only attracting young workers but also ushering in a new wave of wealth, resulting in changes like luxury property booms and old neighborhoods undergoing revitalization periods.
From Tel Aviv to Berlin, take a look at six global cities that have been likened to Silicon Valley.
Tel Aviv, Israel, a growing tech hub, has seen a boom in luxury real estate.
Called "the next Silicon Valley" and referred to as "Startup Nation," Israel has undergone a high-tech revolution, Daniel Knobil of Home Search Israel previously told Business Insider: "Israel has become one of the world leaders in bio technology, cyber technology, artificial intelligence, online games, and high-tech agriculture."
It's home to more startups per capita than any other country and attracts more venture capital per person, Business Insider previously reported. Evi Angelakis, founder of New York-based Golden Key Realty Group, told Mansion Global that Israel is second in the world behind Silicon Valley when it comes to tech hubs.
At the center of this hub is Tel Aviv. Multinational tech companies like Google, Oracle, and Facebook have research centers in or near the city, which also serves as a home for a plethora of successful local tech companies. Google recently bought GPS navigation app Waze — local to Tel Aviv — for $1 billion, and Amazon opened an office in Tel Aviv in October.
As a result of this tech boom, "there have been extremely successful Israeli companies making extremely successful wealthy Israelis," Knobil said. "The country has gone through a real revolution, which has fueled a demand for luxury houses and apartments."
This is especially true of Tel Aviv, where real estate is the most expensive.
Berlin, Germany, has a thriving tech scene thanks to its bounty of affordable property.
There's been a surge in technology companies based in Berlin, Sam Shead previously reported for Business Insider. As James Cook wrote, Berlin is "home to a mixture of hackers, privacy experts, scientists, and video companies that are making waves in the tech scene."
Tech giants like Apple and Facebook have offices in the city, which is also home to local success stories like music streaming service SoundCloud and to-do list App Wunderlist. Google opened its "Campus Berlin" tech hub in 2017 because Berlin's startup scene grew so rapidly over the last five years, setting it on track to become one of Europe's leading ecosystems.
A number of UK tech startups relocated to the relatively cheap city following Brexit, which could inhibit their ability to access the European market and make it difficult for them to hire, The Financial Times reported.
From 2015 to 2017, Berlin witnessed a 9% increase in startups, higher than any European city, reported Nicholas Borsotto Machado Monteiro for Entrepreneur, citing Creditsafe. The city accounted for 70% of total investments in German startups in 2017, and it was named a banner year for startups by Ernst & Young.
While tech booms usually lead to increased real-estate prices, Berlin had so much affordable property available that companies and their employees were able to easily snap up spaces, Monteiro reported. With such affordability, the city has been able to easily attract global talent.
Shenzhen, China, is the country's main tech hub.
Matt Rivers of CNN called Shenzhen "China's Silicon Valley."
With more than 14,000 high-tech firms, 3,000 of which were established in 2018, Shenzhen's tech industry accounts for nearly 40% of the city's GDP, according to Mansion Global. There are five tech giants fueling Shenzhen's tech hub, and two of them — Tencent Holdings and Huawei Technologies — collectively employ 234,000 people.
The city is part of the Chinese government's Greater Bay Area initiative, a project to develop technology and innovation growth in the country to rival California's Silicon Valley, reported BBC.
The tech scene is contributing to a rise in wealth among some of its residents, according to Wealth-X's 2019 Billionaire Census report. "Shenzhen is a big part of the reason that China has been minting new billionaires at a rate of one per week," Carrie Law, CEO of Juwai.com, a real-estate portal for Chinese buyers, told Mansion Global.
The city's urbanization is driving a boom in luxury property developments while also changing what luxury looks like — smaller properties focusing on amenities and convenience are being favored over villas and townhouses. Shenzhen is now one of the top five cities in the world with the most expensive housing, reported Alice Woodhouse of The Financial Times.
Lisbon, Portugal, has an emerging startup scene thanks to accelerator funding and plenty of coworking spaces.
Lisbon's startup scene emerged five to 10 years ago — today, it's set to become a leading tech hub in Europe, according to Mansion Global.
In 2016, the Portuguese government created a national network of tech hubs and startups in Lisbon thanks to the StartUP Voucher initiative, which offers a yearlong fellowship to 400-plus entrepreneurs, reported Heather Farmbrough for Forbes. They also set up a $225 million venture capital fund to increase foreign investment in startups.
From 2014 to 2016, 700 companies in the high-tech industry were established in Lisbon. Lisbon has 32 tech scale-ups — companies that have raised just under $1 million (USD), which make up nearly half of the companies in the city, according to a Startup Europe report.
A former army food factory will be reconstructed into a huge startup campus, Hub Creativo Beato, and Google recently announced plans to launch an innovation center just outside the city (date unknown), according to Mansion Global.
Tech workers are revitalizing Lisbon's rundown buildings in up-and-coming areas, transforming them into hubs and coworking spaces, as well as affordable places to live.
Bengaluru, India, has evolved from cheap labor to booming startups.
In its 2019 Wealth Report, estate agency Knight Frank referred to Bengaluru as "India's answer to Silicon Valley," thanks to the city's variety of tech sectors across artificial intelligence, food tech, fintech, and robotics. More than 400 multinational tech companies, like Microsoft and Samsung, have offices there. It's also home to local companies like Infosys and Wipro.
"The tech scene and entrepreneurial spirit in Bengaluru are booming," Niketh Sabbineni, a local tech entrepreneur, told Rachel Hall of The Guardian. India's IT industry began here 25 years ago — in 2017, it was named the world's most dynamic city by the World Economic Forum, Hall wrote.
In the beginning, the tech scene included foreign companies looking to cut costs, which gave the city a reputation for cheap labor, according to Hall. Now, it's evolved to take on more of a startup feel.
The city's GDP is expected to grow by nearly 60% in the next five years and the number of ultra-high-net-worth individuals is expected to grow by 40% in the same time period, according to the Knight Frank report, citing Oxford Economics data.