The third wave of the Internet has started to transform the fundamental aspects of our daily life. The new era of Tech will go further than building businesses that function entirely on the web. According to the Global Startup Ecosystem Report 2018 (GSER), we are witnessing the global entrepreneurial revolution where emerging subsectors like Robotics, Biotech and Agtech are influencing our activities outside of the web, starting from the way we work, eat, learn and maintain our health.
Based on the assessment of 43 startup ecosystems in 23 countries and the interview data of over 10,000 startup founders across the world, the results of the GSER 2018 showcase how digital media and gaming sectors are slowly declining and subsectors like Fintech, Cybersecurity and Blockchain are becoming the scenes for the new era of Tech with Blockchain alone having 163% 5-year increase in early-stage funding deals.
Furthermore, GSER 2018 demonstrates that the shift towards Deep Tech does not only change the economic landscape of the startup activity, the geographic map is being altered as well. While Silicon Valley, New York and London remain the top locations of entrepreneurial activity, new hubs of excellence have evolved with their growing startup ecosystems where Fintech, Cybersecurity and Blockchain flourish. Amsterdam is one of the capitals which is expected to become one of the European alternatives of Silicon Valley alongside London and Berlin.
Why is Amsterdam a potential scene for the new era of Tech? The Netherlands’ capital city is the base of StartupDelta, an area with over 10 tech clusters which represents one of the top ecosystems in the world. The city has consistently maintained its high rankings on its entrepreneurial environment. In the period 2016-2017 Amsterdam held the status of the European Capital of Innovation awarded by the European Commission. In 2017, the Global Entrepreneurship Monitor (GEM), the largest study of entrepreneurial activity in the world, noted positive entrepreneurial perceptions in the Netherlands with 81% of the Dutch adult population (18-64 years of age) rating entrepreneurship as a natural career choice. In 2018 OECD Better Life Index puts Amsterdam on the 1st place of its list for the city’s healthy work-life balance. In the meantime, Forbes announced the location of its first European edition of Under 30 Summit for more than 300 young changemakers from the Forbes 30 under 30 Europe lists. And guess where? Amsterdam!
Based on the information provided above, you might have questioned what’s behind the success of Amsterdam’s entrepreneurial ecosystem? What makes this city attractive for tech entrepreneurs to start their ventures? In this blog post, we are presenting 3 major characteristics of Amsterdam’s ecosystem which make it a place to recognize an opportunity and implement creative ideas into life!
Cooperation with the government
The residence permit for startup entrepreneurs was introduced by the Dutch government to attract entrepreneurs outside of the EU in 2015. In addition to the permit, the government offers mentorship programs so that a new business has more chances to succeed and enter a mature stage of development. The mentorship program includes guidance from experienced facilitators. Furthermore, there is StartupDelta which is an independent public-private partnership between Ministry of Economic Affairs and Climate Policy and the Ministry of Education Culture and Science, corporations, innovation hubs, universities, research centres and investors. Both entrepreneurship researchers and practitioners note that the support of a country’s and city’s formal institutions has a direct impact on its productive entrepreneurship. And Amsterdam excels in this regard by attracting international entrepreneurial talent!
Local connectedness / Entrepreneurial network
Entrepreneurial networks are one of the pillars of a strong startup ecosystem. In a study conducted by the Economist Intelligence Unit, for 78 % of startups networking was crucial to their success. Social networks provide a cluster of knowledge and opportunities and help entrepreneurs get an access to funding and reach out to potential clients. Due to an importance of entrepreneurial networks in the organization of a startup ecosystem, GSER 2018 came up with a new metrics called Local Connectedness that measures the level of interconnectivity between all the stakeholders of the startup community. Amsterdam got into the Top 10 ecosystems with the highest degree of Local Connectedness out of 43 assessed ecosystems. The Next Web Conference, one of Europe’s leading technology events, takes place annually in Amsterdam where 15,000 entrepreneurs, developers, marketing managers, CEOs and policymakers, and 3,500 companies from all over the world come together.
Read what we thought were the highlights of 2018’s TNW in our previous blog post.
Consequently, it comes as no surprise that Amsterdam will be hosting the first European edition of Forbes Under 30 summit this month. Amsterdam’s high level of local connectedness, top technology conferences and festivals increase the potential frequency of interdisciplinary communication and collaboration. And it makes this city a place to be!
Financial capital, access to highly skilled labor and orientation towards innovation
Home to Adyen, multichannel payment provider, and Booking.com, a global travel metasearch engine, the Netherlands has been known as the hubspot of where innovation meets opportunity and Amsterdam being the buzzing centre of entrepreneurship. According to GSER 2018, the Dutch financial industry has a potential of at least $112 billion. Knowledge and science-based startups capitalize on this opportunity with excelling mostly in payments, digital identity and security. In 2017, Forbes named the Netherlands the 3rd best country in the world for doing business. Amsterdam has established itself as the new scene for Fintech and Cybersecurity with Ohpen, the cloud-based banking engine startup, and EclecticIQ, cyberthreat analysis company, making it to the top 10 largest rounds in the Netherlands.
Highly skilled international talent is one of the underlying factors that stand behind the success of Amsterdam’s startup ecosystem as well. The Netherlands is home to 12 research universities and entrepreneurship programs are taught at the leading educational institutions. Universities contribute to the development of a thriving startup ecosystem by providing human capital with an entrepreneurial mindset and founding innovation hubs where entrepreneurs and students exchange knowledge and expertise through workshops and public talks. Amsterdam Center for Entrepreneurship (ACE) connects students, academics, tech professionals with venture capitalists and corporations. Named #1 Incubator in the Netherlands, ACE helps young tech talent during their entrepreneurship process starting from initial concept to founding a company. The collaboration between businesses and prospective science-driven startups in Artificial Intelligence and Data Science is going strong with 4 million euros investment from the city of Amsterdam.
Orientation towards innovation in Amsterdam is remarkable and present in almost each aspect of this city. The city has Europe’s fastest broadband speed, plenty of research centres, accelerators and incubators and the top the Global Entrepreneurship Monitor. Amsterdam’s startups and scaleups added 10,000 jobs to the labor market in the last two years.
Are you passionate about technology and how it is changing our daily lives? Read more about Amsterdam as Europe’s tech hub in our previous blog post.