Innovation hotspots in Europe and Asia are signaling an end to the America’s near hammerlock on global technology startups, according to a survey of venture capitalists worldwide.
The study, released Tuesday by Deloitte LLP and the National Venture Capital Association, found that while the United States retains the lead in each of six broad innovation categories, other countries are mounting strong challenges.
For instance, 21 percent of the 398 VCs surveyed said Germany had the best clean technology versus 56 percent for the United States. Excluding U.S. VCs, however, the gap narrowed to 35 percent for the United States versus 24 percent for Germany.
Though 70 percent of respondents gave the United States highest marks as the primary innovator in semiconductors and electronics, Taiwan’s combined primary and secondary score was 31 percent, while Japan’s was 26 percent.
In a conference call accompanying the report, Mark Jensen, national managing partner, Deloitte & Touche, said the VCs’ responses on secondary hotspots are significant in identifying “spikes in innovation.”
The survey also found that U.S. VCs are putting their money where their map is, with 57 percent investing in foreign markets.
Dixon Doll, general partner at DCM (an investor in Red Herring), noted that as Asian countries have grown indigenous venture capital ecosystems, U.S. companies like eBay and Google have taken their lumps in those markets.
“The real point is no U.S. technology company should ever assume you can just on in there and export to China the same algorithms and business models you did in the U.S.,” he said. “All the local ground rules are a little different. The consumers and mobile users are, just by definition, different.”
Jean-Francois Formela, general partner, life sciences, Atlas Venture, noted that the third largest life sciences cluster beyond Boston and San Francisco is not the U.S. hotbed of San Diego. Instead, he said, that slot goes to two European regions: the area around East London and Manchester and the area around Germany’s Munich and Switzerland’s Basel.
Although 87 percent of VCs called the United States the leader in software, 35 percent viewed India as the secondary market, with the United Kingdom (13 percent), Israel (11 percent) and Germany (9 percent) trailing behind.
The survey, conducted in March, drew 41 percent of its respondents from the United States; 20 percent from the Asia Pacific region; 19 percent from Europe excluding the United Kingdom; 10 percent from the Americas excluding the United States; 6 percent from the United Kingdom, and 4 percent from Israel.