Bengaluru set to pip Shanghai in global startup ecosystem index: Report
Two new Indian cities have entered the top 100 list to take the total count to five: Pune at 90th and Hyderabad at 97th
Bengaluru, ranked eighth globally, has emerged as the strongest startup ecosystem in India, increasing by two spots this year and solidifying its position in the global top 10 cities, according to a report.
The Startup Ecosystem Report 2022, released by Israel-based organisation Startup-Blink, showed that India continues to improve its standings in the global index, and is now ranked 19th after an increase of one spot this year. India is the fourth highest-ranked country in the Asia-Pacific region, after Singapore, Australia, and China.
The gap between the total scores of India, Japan, and South Korea, which are ranked 4th, 5th, and 6th, respectively in Asia-Pacific, is small. This signals a competitive environment for India, especially considering its massive population, which is factored into its national rank, the report stated.
The Global Startup Ecosystem Index by StartupBlink has been updated annually since 2017. It ranks the startup ecosystems of 1,000 cities and 100 countries. The report takes into account three parameters – quality of startups, quantity of startups and business environment.
“Each ecosystem has a total score, which is the sum of 3 subscores measuring Quantity, Quality, and Business environment,” the report said while explaining the methodology.
Bengaluru on the ascent
Bengaluru continues to be the highest-ranked city in India. It has strengthened its position in the top 10 and improved by two positions to rank eighth globally. It is also the third-highest ranked ecosystem in Asia-Pacific, after Beijing and Shanghai, the report said.
“Bangalore overperforms in the edtech industry with a global rank of five. While Bangalore’s rank in the Asia-Pacific region remained unchanged at third, its relative position definitely improved. Last year, Shanghai’s score was 66% better than Bangalore’s score. Now, this gap has been reduced to less than 12%, thanks to the good performance of Bangalore and less impressive results in Shanghai. Consequently, Bangalore is now well-positioned to overtake Shanghai next year as the second highest-ranked city in the Asia-Pacific,” it added.
New Delhi is the second-highest ranked city in India, and fourth in the Asia-Pacific. It has increased by one place to rank 13th globally. The gap between the scores of Bengaluru and New Delhi was relatively small last year, but increased significantly in 2022, strongly positioning Bengaluru as the top ecosystem in India.
Pune, Hyderabad new entrants
Two new cities from India have entered the top 100 list to take the total count to five: Pune at 90th and Hyderabad at 97th. Pune has seen an improvement of an impressive 14 spots and Hyderabad has seen an increase of nine spots. Chennai is not far behind, with a massive jump of 31 spots to rank 102nd. The 2nd tier ecosystems of India have all seen healthy growth, the report said.
India has the second-highest number of cities in the global top 20 with three, a distinction it shares with China. Only the US has more cities ranked in the top 20 than India.
The Asia-Pacific region has a total of 159 startup economies in the global top 1000, slightly declining from 161 in 2021. At the country level, the region is home to an incredibly diverse range of countries, with some home to more than one billion citizens (China and India), and some with high average incomes compared to most countries in the world (such as Australia and Singapore), as well as 19 countries in the global top 100, the report said.
In the Asia-Pacific region, Singapore is the top country, with a total score of 23.408. It has jumped three places in the latest report. Australia (total score 22.454) is number two followed by China (20.663), India (12.476), and Japan (11.947). India has moved up one place since 2021.
South Korea, Taiwan, New Zealand, Indonesia, and Malaysia complete the top-10 list in the Asia-Pacific region.
At the city level, China dominates the regional top 20 with seven cities, including the two highest-ranked: Beijing (6th in the world) and Shanghai (7th). India (with 5) and Australia (with 2) are the other countries with more than one city in the regional top 20.
Beijing and Shanghai are the top two cities in the Asia-Pacific region while Bangalore is third (two places up) followed by New Delhi (one place up) and Tokyo-Yokohama Area. Mumbai is placed sixth while Pune, which gained 14 places to be at the 19th position, and Hyderabad 20th (a jump of nine places).
Bengaluru’s ecosystem value
According to another report, The Global Startup Ecosystem Report 2022, released by the policy advisory and research firm Startup Genome, Bengaluru has an ecosystem value of $105 billion.
“Several Indian ecosystems have risen in the rankings, most notably Delhi, which is 11 places higher than in 2021, entering the top 30 for the first time at 26. Bangalore has moved up one place from last year, to 22,” the report said.
“India has seen a rapid rise in the number of large exits and early-stage rounds, and a substantial increase in Ecosystem Value. The nation produced 44 unicorns in 2021, and exits rose to $14 billion — a 10-fold increase over 2020. Delhi and Mumbai joined Bangalore in the top 40. Ecosystem-creation initiatives and startup-friendly policies are helping to drive this movement,” it added.
Bengaluru ranks eighth among cities globally in the amount of VC investment attracted by its Fintech sub-sector, according to an analysis by research firm London & Partners and Dealroom.
“Bengaluru-Karnataka Innovation Ecosystem has catalysed and scaled up startups at an unprecedented pace. This nurturing ecosystem has steadily given birth to numerous unicorns and is now evidencing signs of logarithmic growth,” Dr. C N Ashwath Narayan, Karnataka Minister of Science & Technology, Higher Education & Information Technology and Biotechnology, was quoted as saying in the report.
Karnataka is ranked third in the Institute for Competitiveness Export Preparedness Index 2021 and the state hosts 44% of India’s R&D centres, including Google’s first AI and machine learning-focused centre and Intel’s largest 5G technology design centre. Karnataka accounted for 45% of total FDI in India for the first half of fiscal year 2021–2022, the report said.