Lagos Leads As Africa Performs Poorly On 2021 Global Startup Ecosystem Rankings
Lagos leads as Africa performs poorly on 2021 global startup ecosystem rankings
It has been determined that Lagos, the commercial capital of Nigeria, has the best startup ecosystem on the African continent. Nigeria's capital, Lagos, was ranked 52nd out of the top 100 emerging startup ecosystems worldwide in the 2021 Global Startup Ecosystem Report (GSER); it was just a hair ahead of Cairo (55th), Nairobi (77th), and Cape Town (78th) (81).
It's worth noting that these four ecosystems were the only ones from Africa listed among the top 100 emerging ecosystems around the world. There was no African startup ecosystem among the top 100 global startup ecosystems.
In 2019, the Global Entrepreneurship Network published the Global Startup Ecosystem Report, which can be found here (GEN). This annual publication is produced in collaboration with TWC, Crunchbase, Dealroom, Bella Markets, and Tech Nation.. Based on interviews, surveys, and research conducted with hundreds of startup support organizations, thousands of startup founders, and millions of companies, the report was created.
For the report, 275 ecosystems from more than 100 countries were evaluated in order to determine the top global 30, runners-up, and top 100 ecosystems in the world. A new top-level segment, Emerging Ecosystems, was introduced in 2020 to place a special emphasis on ecosystems that hold significant potential.
It is not surprising that Lagos has been included on the list of emerging ecosystems. In 2019, the city was named one of the top 30 Challenger startup ecosystems in the world. The challenger list is comprised of ecosystems that are not currently ranked among the world's top 30 ecosystems but have a realistic chance of making the list in the future.
Nigeria's capital, Lagos, has consistently appeared on the list, despite the introduction of a number of regulations that many have criticized as stifling freedom of expression and thought. Remember that it recently surpassed Nairobi, Kenya, to become Africa's top startup ecosystem, according to the StartupBlink Ecosystem Index Report 2021, which ranked it second.
What happened to the emerging ecosystems
Emerging startup ecosystems are so named because they have the potential to become the world's leading global startup ecosystems in the near future. These companies were evaluated based on the same criteria used to evaluate the Global 100 companies: performance and funding; market reach; talent and experience; connectedness; and knowledge.
All of the factors in this category are intended to rank ecosystems based on where early-stage startups are most likely to build globally successful businesses.
According to the report, Mumbai outperformed all of the other ranked ecosystems to take the top spot.
According to the Ecosystem Value Index, the top 100 emerging ecosystems are collectively worth more than $540 billion, a 55 percent increase over the previous year. 124 billion-dollar startups were founded in the Top 100 Emerging Ecosystems between 2011 and 2020, with 53 ecosystems accounting for the vast majority of these venture capital-backed enterprises.
Asia is currently in the lead in terms of economic development. Following that, North America accounts for 30% of the billion-dollar club and Europe accounts for 27%.
Europe and North America continue to hold the majority of the positions on the list. Argentina's capital city joined Mexico City and Bogota as the third city in Latin America, with Buenos Aires, Santiago-Valparaiso, and Rio de Janeiro as the other two. There are a total of four in the MENA region.
According to the report, the top 100 Emerging Ecosystems are collectively worth more than $540 billion in Ecosystem Value, representing a significant 55 percent increase in value from the previous year. This indicates that the effects of the pandemic are beginning to wear off more quickly.
In addition, they have generated 124 unicorns (billion-dollar startups) between 2011 and 2020, with 53 ecosystems accounting for the vast majority of the total number.
The tech ecosystem accelerator AfricArena estimates that African startups will have raised a total of $2.8 billion this year, with Nigeria and Kenya serving as the epicenters of fundraising activity.
African investment is expected to reach more than $10 billion by 2025, according to projections.
A visual representation of the global ranking
Although the year has been a turbulent one, the top five global startup ecosystems from 2020 continue to dominate our rankings. Despite the fact that the top seven global ecosystems have remained the same for three years in a row, This indicates that the COVID-19 pandemic did not have a significant impact on the world's political and economic order.
According to the report, each leader's Ecosystem Value is worth at least $110 billion, with a median value of $157 billion for the entire group. In total, the seven leaders are responsible for an Ecosystem Value of more than $2.2 trillion, an increase of half a trillion dollars from the previous year.
Six countries will have two-thirds or more of the world's top startup ecosystems by 2020. For example, the United States has 15 of the world's top startup ecosystems, which is one more than the previous year. China, India, Canada, Germany, and Australia all maintained their positions as the world's most productive ecosystems.
As was expected, Silicon Valley is the world's most important ecosystem. It is followed by New York City and London, which have tied for second place in the rankings for the past two years. Beijing is ranked fourth, and Boston is ranked fifth.
By continent, it is clear that North America continues to be the dominant region in the Global Rankings, with 50 percent of the Top 30 ecosystems located within this region. Asia comes in second with 27 percent of the market and has the potential to catch up with North America, as evidenced by the steady increase in the value of exit transactions.
The total value of exits in the first half of 2021 is more than $423.5 billion.
The top performers of this year outperform their peers in terms of the Success Factors of talent and experience. It also indicates that ecosystems such as New York City, London, and Boston are successful in attracting high-quality tech talent to their respective cities. in the year 2021
Tokyo is the only newcomer to the Top 10, having risen six spots to take over as the world's ninth most populous city. The primary driver is an increase in the number of successful exits, which is contributing to an increase in the value of the ecosystem.
Excellent policies are the way to go forward
The bane of African ecosystems has been bad policies, skewed legal systems, and an uncertain political environment since the continent's colonial days. Previous reports have highlighted the enormous potential of ecosystems in places like Lagos, Kigali, Cairo, and Cape Town. However, these had either faded away in subsequent years or had remained in emerging categories without experiencing significant increases.
African countries have been implementing Startup Acts that appear to be beneficial for several years, offering tax breaks and grants to entrepreneurs and policies that assist founders with financial and legal support during the early stages of their companies' development.
Examples include Kenya's introduction of a bill in December that, among other things, establishes a National Innovation Agency to encourage collaborations between startups, incubators, and investors.
Ethiopia's proposed version addresses a wide range of issues, from streamlining processes to increasing foreign investment to covering fees for intellectual property registration and protection. The Nigerian government was mulling over a similar bill that would have included private sector participation.
The implementation process has proven to be a significant drawback in almost all cases.
