Think your startup can only thrive in the USA? Maybe its time to venture beyond borders…
Entrepreneurship is the lifeblood of any economy. In the USA, over 27 million Americans are launching or running enterprises, with rates of entrepreneurship among the highest in the West. The USA is still arguably the world’s most important economy and Silicon Valley is still the global hub for innovation.
At the same time, studies show that startup rates, activity and job creation have been declining in the USA for decades. Reasons for this are legion and include but are not limited to: socio-economic fallout from the recession (especially for millenials), shifting global supply chains, mismatched labor markets and a venture capital industry that fails to allocate capital in line with demographic parameters of the market (i.e. diversity).
As proven by Elon Musk (a migrant to the US!) and Richard Branson, sometimes the key to growth is looking beyond one’s home country. There are tons of other markets that can offer a combination of greater scale, reduced competition, lower costs, higher social impact and/or access to capital. These metrics truly need to be considered based on the specific business model to map out best possible markets and scenarios.
However, for those considering launching or expanding a startup, here’s a curated list of high-potential markets, based on cost of living, ease of doing business, market size and funding opportunities.
GNI per capita- $10,570
Doing Business Ranking- #23
Malaysia has “first-world” infrastructure with low labor costs, as well as great connectivity to Asia, Europe and the Middle East (including low-cost air carriers) and a decent regulatory framework aiming to facilitate speed and ease of investing and running businesses. Quite a few accelerators, angels networks and investment funds are now present and Kuala Lampur is the center of equity crowdfunding in Southeast Asia.
Highlighted sectors/opportunities: Tech startups. Services companies (due to lower labor costs). Access to Indonesian Market.
GNI per capita- $45,790
Doing Business Ranking- #17
Berlin is currently going head to head with London as the future startup capital of Europe right now. Although London has more startups, Berlin counts on over $1 bn in venture funding. Plus, the costs of living are much lower. Plus Brexit is coming.
Highlighted sectors/opportunities: Access to EU market. Tech and creative industries
Doing Business Ranking- #2
Singapore is a no-brainer, given that it has one of the most business-friendly administrations in the world, excellent infrastructure and financial system, plus global connectivity. Also, favorable macroeconomics, in terms of consumer spending and growth trends, along with lots of funding options, including a ton of government-backed schemes. Labor costs are high however.
Highlighted sectors/opportunities: Tech and financial services. Access to Chinese market.
Doing Business Ranking- #26
The UAE is the Gulf’s most open economy and society, extremely well-connected to the growth markets of Asia and Africa and has excellent infrastructure and connectivity. Macroeconomics are positive (for Dubai, especially) and there’s a wide variety of funding schemes, including incubators and accelerators.
Highlighted sectors/opportunities: Trading, consumer goods, tech, access to Asia/Africa
Doing Business Ranking- #57
Chile is one of Latin America’s most prosperous countries- the first one to join the OECD. In addition to a stable, diversified economy, it offers access to the entire MERCOSUR market. More importantly, Chile is working proactively to attract entrepreneurs and through its Startup Chile scheme, even provides visas and funding to launch startups in the country.
Highlighted sectors/opportunities: Tech, consumer goods, manufacturing, social impact
6. South Africa
Doing Business Ranking- #74
South Africa is sub-Saharan Africa’s second biggest economy, after Nigeria. While it has a much smaller population than Nigeria or Ethiopia, and slower growth than many of its East African counterparts, it also has some of Africa’s best infrastructure and most sophisticated financial systems. It is still one of the easiest markets in sub-Saharan African for raising capital and doing business in general. However, from South Africa, one can still expand operations to the rest of the continent as well as access social impact funding, when applicable.
Highlighted sectors/opportunities: Manufacturing, tech, social impact, financial services