An ongoing question these days is why technology clusters, innovation and M&A hubs arise, and what the secret sauce is, to creating and sustaining such successful hubs.

As a wider group of tech-savvy cities and regions now aspire to become the coolest innovation hubs, to foster economic development, efficient access to capital markets, entrepreneurship, job creation, talent acquisition, R&D, cross-border M&A deals and other favorable exit strategies, the answers to these questions are still a matter of debate.

Equally controversial is the question as to what metrics or selection criteria should be deemed more reliable, to objectively rank these hubs or ecosystems.

As recently reported by DealmakersHubthe most attractive innovation hubs and tech cities are not necessarily the largest. Indeed, according to Savills and WSJ.comTel Aviv, with a population of merely 400, 000 has been ranked as the 3rd Top Tech City in the World, and 3rd Best Place Globally to Work in Tech.

The 12 Cities at the Forefront of Global Tech. Source: Savills World Research - Feb 2015

The 12 Cities at the Forefront of Global Tech – Savills World Research, Feb 2015

Savills selected 12 top tech cities on the basis of their consistent appearance at the top of global shopping lists for tech companies looking for space in which to locate. Each is notable for having startup and incubator communities in the creative tech sector, as well as a very broad range of other attractions to both large and small companies.

Top Cities for Tech Business - Savills/WSJ. March 2015

Top Cities for Tech Business – Savills/WSJ. March 2015

In contrast, in November 2014 CB Insights had analyzed cities globally to learn which had experienced the largest growth in tech deals and transaction values over the previous two years.

International cities dominated the top 3, with Beijing (165% deal growth), Stockholm (127%), and Tokyo (126%) topping the list. On the other end of the spectrum, some of the more established cities in tech saw little or negative growth, like New York (6%), Cambridge (-12%), and Los Angeles (6%), as illusrated below.

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next-SV-deal-growth CB INSIGHTS Nov 2014

The Next Silicon Valley – CB Insights, Nov. 7, 2014

Meanwhile, according to MIT Tech Review, “there is a spot just off the MIT campus in Cambridge, Massachusetts, that is home to what may be the world’s densest concentration of startup companies.” According to MIT, an innovation cluster’s chance of flourishing is contingent upon factors such as strong IP protection, good weather, liberal immigration laws, venture capital financing, and entrepreneurial culture.

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World Innovation Clusters - MIT-Tech Review, Jul 30, 2013

World Innovation Clusters, July 30, 2013 (compiled by MIT Tech from multiple sources)

MIT Tech also ranked the world’s top innovation hubs, based on a breakdown of venture capital investments by region in 2012:

VC Investments in Top Hot Spots 2012 - MIT Tech Review

2012 VC Investments in Top Hot Spots – MIT Tech Review

Finally, according to the Startup Ecosystem Report 2012, published by the Startup Genome in partnership with Telefonica Digital and researchers at Stanford University and University of California, Berkeley, these 20 ecosystem hot spots were considered a few years ago, the most active startup hubs in the world. Rankings were calculated based on success in 8 key areas: startup output, funding, performance, entrepreneurial mindset, trendsetting, support, talent, and differentiation.

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the-worlds-20-hottest-startup-scenes - 2012 STARTUP GENOME PROJECT

Startup Ecosystem Report 2012. Infographic Sources: Startup Genome, Telefonica Digital, Intuit. Infographic by Column Five.

Not surprisingly, the answer to the secret sauce appears to remain elusive.

Norbert Mehl Norbert Mehl, CEO at Global i Ventures, is a New York-based serial entrepreneur and investor engaged in start-ups, M&A, venture finance and real estate. He was born in Zurich and raised in Buenos Aires.



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