A new index measuring what startups and scale-ups feel is important to them has ranked London as the best city in Europe for digital entrepreneurs.
The European Digital City Index has been launched by UK innovation foundation, Nesta, as part of its work on the European Digital Forum – an initiative with the Lisbon Council to promote the digital economy. It measures and ranks the EU’s capital cities and known digital innovation hubs against ten criteria set by nearly 100 digital entrepreneurs, policymakers and academics.
Non-capital cities included in the index were Barcelona, Cambridge, Cologne, Milan, Munich, Oxford and Stuttgart.
London scored highest overall for both startups and scale-ups, as well as in more specific areas such as access to capital, entrepreneurial culture and knowledge spillovers. It fared less well when it came to lifestyle, which assesses standard and cost of living – its lowest score across the ten criteria came there. Cambridge and Oxford were 11th and 13th respectively on the list.
The capital’s “substantial” financial sector was cited as a major plus, with its VC industry the most developed in Europe, along with the presence of many financial services firms helping to promote numerous fintech and crowdfunding startups like Funding Circle, Seedrs and DueDil.
Its success has come at a price though – attracting talent from the rest of the UK and overseas, has, the report said, pushed up housing and office rental costs.
Amsterdam was ranked in the top three for both startup and scale-ups, scoring strongly for capital, culture and connectedness.
Chris Haley, head of startups and new technology research at Nesta, said: “Entrepreneurship, particularly digital entrepreneurship is vitally important for innovation and growth, but not all cities provide equally fertile ground for these businesses.”
He added that the research shows location matters as well as indicating how the top cities foster a supportive environment for early-stage firms.
Despite Berlin producing a range of billion dollar startups, including ecommerce site Zalando and delivery service Delivery Hero, it only came in at seven for new businesses. It was held back because of expensive and relatively sluggish digital infrastructure, as well as the high cost associated with employing staff.
Brussels trumped the German capital as a better place for scale-ups due to its greater access to capital.
Top Ten Cities for Digital Entrepreneurs
For startups: For scale-ups:
(1) London (1) London
(2) Amsterdam (2) Stockholm
(3) Stockholm (3) Amsterdam
(4) Helsinki (4) Helsinki
(5) Copenhagen (5) Copenhagen
(6) Paris (6) Paris
(7) Berlin (7) Brussels
(8) Dublin (8) Dublin
(9) Brussels (9) Berlin
(10) Munich (10) Munich
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