The Next Big Thing Will Most Likely Not Be Made In America

It is fair to say that we pay pretty close attention to Silicon Valley and Alley. Perhaps we are even a little obsessed. Sure, the Valley/Alley matters. But they also represent only one slice of the digital innovation pie. A hefty slice, but there is a lot more!

Many will have heard of the Silicon Roundabout in London, or have heard of it by its official name, “Tech City.” In an area of London called Shoreditch, once a downtrodden bit of awfulness, there is now a growing and thriving digital innovation hub. It is in fact growing and thriving so much that many of its smaller start-ups fear that rent hikes will start to prohibit them from staying in the area. There are over 1,000 start-ups currently concentrated here. Apart from rent hikes, the other challenge is that London’s “City” (where the money lives) has apparently not yet really embraced start-uppery, leading to grumblings from entrepreneurs that finding money is not always easy.

Berlin has its own innovation hub in the Kreuzberg area (formerly part of East Berlin). It offers plenty of affordable housing and office space, and Germany has a long history of manufacturing and engineering so you have access to skilled engineers and “makers.” Contrary to London’s government-sponsored Tech City approach, Berlin’s hub has kind of grown organically. The biggest challenge here is that, at its heart, Germany is quite conservative, which means that finding risk-takers can be challenging.

The Hebrew word for valley is Wadi, and hence Tel Aviv is home to Silicon Wadi. According to data from October of last year (via Forbes) it is the number 2 start-up eco-system in the world, and is home to 61 companies that have found their way onto the NASDAQ. Those are impressive stats. The comfortable links between the US and Israel provide an easy (financial) connection for doing business. Also, the government is always on the lookout to stay ahead in technology and security, and spends accordingly. Israel apparently also boasts the highest number of engineers per capita. All this resulted in over $2 billion invested in Israeli start-ups in 2013.

And so the list goes on. Sao Paulo, Shanghai, Singapore, Kiev, Moscow and all other cities in between today have their own start-up ecosystems. The African continent is now coming along as well, with countries like Nigeria, Kenya and South Africa beginning to produce disruptive solutions and services.

An example of African innovation is a mobile payment system called M-Pesa, Swahili for money. Vodafone, one of the world’s largest mobile phone operators, is now bringing M-Pesa to Europe, starting in Romania. PayPal, Square and all other payment systems: Be warned.

On my many trips to Asia and Eastern Europe, I have met with many really smart start-ups who are all working as hard as (if not harder than) their Silicon Valley counterparts. I say “working harder” because they simply have to. Their motivation is often to solve real problems rather than making an app to know where your private limo is. If you don’t have access to “easy” money and still want to pursue your idea, you are going to have to be smarter, nimbler and really driven to succeed.

And as you already know, disruptors like Skype, Last.FM, Summly, Candy Crush Saga and even Flappy Bird did not come from either the East or West Coast of the U.S.

So don’t be surprised if the next disruptor comes from an unexpected corner of the world. In fact, expect that to happen.

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3 comments about "The Next Big Thing Will Most Likely Not Be Made In America".
  1. Pete Austin from Triggered Messaging , April 7, 2014 at 11:40 a.m.
    Triggered Messaging has one office near Silicon Roundabout in London, so this is not a theoretical question for me. I fully expect that we can create a great product, but could it be made the next *BIG* thing without needing American money? That's the real question, because in the end game it doesn't so much matter who invents things as much as who ends up owning them.
  2. Maarten Albarda from MLA Consulting LLC , April 7, 2014 at 6:56 p.m.
    Pete: thanks for adding real life experience. Like I said, proximity to the City apparently is not leading to cross fertilization in terms of vibrant investment. So quite a few start-ups have either attracted VC money from the US to the UK, or have actually moved to the West Coast to find the money that wasn't finding them. I think this will change over time. I hope it happens before your next rent increase... Good luck!
  3. Maarten Albarda from MLA Consulting LLC , April 12, 2014 at 3:14 p.m.
    I have been informed that "Silicon Wadi" is in fact <"gasp"> Arabic. The Hebrew word is Emek. I was told that the term Silicon Wadi just roles of the tongue better in English (and sounds more like the original), which is why Israeli use it in English. Very pragmatic :-)