How start-ups can turbocharge global productivity growth
January 2, 2017 Editor 0
Attendees at Republica Berlin 2016, an annual conference on digital culture for entrepreneurs from around the world.
Photo Credit: © Victor Mulas/The World Bank
We have witnessed in recent years the emergence of technology start-up ecosystems across the world. New technology trends are reducing the costs as well as the barriers of access to markets and resources for developing technology start-ups. If in the 1990s an entrepreneur needed $2 million and months of work to develop a minimum viable prototype, today she would need less than $50,000 and six weeks of work.
Entrepreneurs are also surging in emerging economies. India hosts major start-up ecosystems in New Delhi and Bangalore, with their start-ups having raised $1.5 billion in funding in 2016, respectively. São Paulo ranks among the top 20 start-up ecosystems with more than 1,500 active start-ups, closely followed in the region by Santiago and Buenos Aires. Warsaw hosts around 700 active start-ups, and Nairobi is the home of leading African start-ups, such as Ushahidi, M-Pesa or Brck.
Tech start-up ecosystems present new opportunities for emerging economies. Local entrepreneurs develop new business solutions that address domestic demands. For instance, in Kenya, M-Kopa is addressing the demand for energy in off-grid locations, a major issue in the country’s rural areas. Unicorns, those start-ups that raise more than $1 billion, are no longer a U.S./Europe-only phenomenon. Indian, Chinese and Indonesian start-ups, such as Lu.com, Flipkart or Go-Jek, have reached this valuation, and African Internet Group from Nigeria is poised to be the first African unicorn.
Start-up ecosystems also create new jobs. Data from New York City’s ecosystem on employment generated in the tech start-up ecosystem shows that most of the jobs generated by tech start-ups are not in start-ups themselves, but in local traditional industries that either are influenced or disrupted by start-ups. Think about a bank or a retail company that has to react to a mobile app providing finance or retail business and that needs to hire new talent to develop a competing app. More than 40 percent of these new jobs do not require a college degree. These are jobs like building a website, a basic database, a web or mobile app.
- How urban start-up ecosystems help cities adapt to economic transformations
- The start-up bubble: How abundant money is actually not helping
- Four ways start-ups can transform a city
- India, Malaysia share experiences how to support start-up SMEs
- Entrepreneurs slaying dragons in South Africa
- Trends in Private Participation in Infrastructure
Categories: World Bank PSD
Beyond adoption – fruit farmers in Ethiopia are innovating with their Africa RISING technologies How can women empowerment through livestock value chains enhance maternal and child nutrition in Northern Kenya?
Subscribe to our stories
- How Open Innovation Can Be Used in the Financial Sector July 23, 2017
- Nigeria: Nigeria Wins Global Government Innovation Award July 23, 2017
- L’entrepreneuriat demande de l’endurance: Comment un incubateur mauritanien appuie les entrepreneurs en herbe avec son concours « Marathon de l’Entrepreneur » July 23, 2017
- Ethiopia learning alliance to support sustainable agricultural intensification July 23, 2017
- Livestock key to ending poverty and hunger in developing countries July 23, 2017