The Economist April 16th 2022 53
BusinessThegeographyofinnovation
A new atlas
T
ake an eveningwalk on 17th Cross
Road in Bengaluru’s hsr Layout dis
trict, and you bump into tech types step
ping out of their startup’s office and into
one of the local microbreweries. They
might work for Udaan (ecommerce), Ve
dantu (education technology) or another
of the growing herd of private startups val
ued at $1bn, whose proliferation in the area
has prompted locals to dub it “Unicorn
Street”. That name might be outdated, says
Mohit Yadav, cofounder Bolt.Earth, a un
icorn wannabe housed in the MyGate
building. “Unicorn neighbourhood” would
be more apt, he chuckles.
hsr Layout was not always the startup
hub of Bengaluru, itself the startup capital
of India. Five years ago Koramangala, a few
kilometres to the north, was the place to
be—until rising office prices pushed out
new startups. The fact that young firms are
beginning to eye an everwider region to
set up shop hints that Bengaluru is matur
ing as a venue for ambitious technologists.
The city is home to 26 unicorns, and last
year attracted $13bn in venture capital (vc).
For decades Silicon Valley’s position as
the birthplace of highgrowth technology
companies was unassailable. The small
patch of land has given the world, among
others, HewlettPackard (founded in Palo
Alto in 1939), Intel (Mountain View, 1968),
Apple (Los Altos, 1976), Google (Menlo
Park, 1998) and Uber (San Francisco, 2009).
Mark Zuckerberg moved in only four
months after founding Facebook in Cam
bridge, Massachusetts, in 2004. As recent
ly as 1999 the valley attracted a third of glo
bal vcinvestment. In 2011, 20 of the world’s
27 unicorns had their headquarters in
America, according to cbInsights, a data
provider. Only four other countries boast
ed even one. San Francisco is home to 136 unicorns
(see chart on next page), with 220 in the
Valley as a whole, more than any other
place in the world. But as Bengaluru
shows, such clustering is no longer con
fined to a strip of land in California. Uni
corns can be found in 45 countries. Over
1,000 trot the globe; nearly half are outside
America. The share of all vc flowing into
American startups has declined from 84%
two decades ago to less than half.
The diffusion of capital reflects huge
growth in tech in recent years that lifted
many boats. But it will endure beyond the
ups and downs of the investment cycle.
Even as tech valuations slid during the
fourth quarter of 2021 and first quarter of
2022, the share of funds flowing to firms
outside Silicon Valley and America has re
mained high at 82% and 51%, respectively.
Of the places that have burst onto the
startup scene, some are mature, such as
Beijing, London or Tel Aviv, and often glo
bal in their ambition. Others, including
Bengaluru, Singapore or São Paulo, are in
earlier stages of hubdom. All enjoy a broad
pool of technical talent, deep links to other
parts of the world and local risk capital. To
gether, they are redrawing the map of glo
bal innovation—creating one that is more
dispersed, diverse and competitive.
Many of the new clusters look different
from Silicon Valley—although some share
its pleasant climate. They also differ from
each other. The more mature hubs tend to
spawn more “deep tech” firms working in
complex areas like artificial intelligenceB ENGALURU AND SINGAPORE
Startup hubs are mushrooming around the world. For real this time
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