The Global Startup Ecosystem Report 2023
A Note From Global Entrepreneurship Network
The Global Entrepreneurship Network (GEN) is proud to partner with Startup Genome for the eighth year on this highly regarded research, which benchmarks and monitors the state of startup ecosystems worldwide. GEN's work empowering entrepreneurs in nearly 200 nations tells the same story and echoes similar conclusions as this 2023 report.
Trouble is Opportunity
As investor Jack Templeton once said, “trouble is opportunity” — a fitting quote for these turbulent times. Research from the Kauffman Foundation shows that while recessions and bear markets bring pain and can lead to short-term declines in business formation, they do not have a significant negative impact on the creation or survival of new businesses. Over half of the companies on the 2009 Fortune 500 list, and just under half of the 2008 Inc. list, launched during a recession or bear market. Airbnb, Uber, WhatsApp, Slack, and Square started in 2008–2009 with other success stories such as Instagram following in 2010. The research also shows that startup job creation is much less volatile and sensitive to downturns than job creation in the overall economy.
The economy, much like farming, must endure fallow years. For centuries, farmers have planned around fields being fallow 25% of the time and adapted to hard growing seasons with conditions too wet, dry, or nutrient deficient. For startups and their ecosystems there is much to learn in lean economic times: redundancies to eliminate, and efficiencies to gain, usually resulting in more investable cohorts when bullish capital returns.
Inclusivity Accelerates Innovation
Simple math tells us economies suffer when anyone is left out. Innovation ecosystems benefit from wide engagement by the most diverse array of communities. In fact, world-changing ideas emerge faster when we acknowledge unconscious bias and meaningfully engage people with unique experiences and histories. After all, by definition, entrepreneurship is messy, and while ecosystems benefit from systems thinking, big and creative ideas bubble up from disorder and serendipity.
Lightning-Speed Resilience
We must keep studying and listening to entrepreneurs as our North Star. Recently, GEN convened 100 founders from 55 nations to compete for funding, mentoring, and support. In reality, they did most of the teaching. The pace at which innovators in numbers are calmly adapting to major global developments is staggering. Shocks to the global entrepreneurial ecosystem are being absorbed faster than ever, which is good news for economists. We are no longer concerned about a big bubble bursting, but rather about adjusting to regular bouts of bumpy air that keeps everyone on their toes. The actions of fast-adapting entrepreneurs result in shorter-term macroeconomic disruption.
Despite recent downturns in investment, the state of the global entrepreneurship ecosystem is strong. Provided we continue to welcome everyone, encourage experimentation, and let our most fearless founders guide us along the path to solving the world’s biggest challenges, global economic growth will keep pace with the solutions society needs to address climate change and geopolitical divides and create sustainable local economies for all.