The Global Startup Ecosystem Report 2023

Ecosystem Lifecycle Analysis

Ecosystems that don’t sync their initiatives with their lifecycle phase may be doing the right thing but at the wrong time, inadvertently wasting time and money for no improvement in the startup ecosystem.

The evolution of startup ecosystems is a complex and multifaceted process. Like their ecological analogs, they evolve through different phases. Each phase has different features, resource characteristics, and needs. In Startup Genome’s taxonomy, startup ecosystems go through four phases of development: Activation, Globalization, Attraction, and Integration. Each has very distinct characteristics and key triggers that allow them to develop from one stage to the next.

Lifecycle phases are valuable in determining which strategies to apply. Through our years of assessment and consulting, Startup Genome has found that fundamentally different strategies correlate with lifecycle phases (Norm Strategies). Ecosystems that don’t sync their initiatives with their lifecycle phase may be doing the right thing but at the wrong time, inadvertently wasting time and money for no improvement in the startup ecosystem. Our ecosystem assessment services can help policymakers determine the correct strategies for the stage their ecosystem is at, and ultimately help it progress to further stages.



An Activation-phase ecosystem is characterized by limited startup experience and low startup output (<1,000 startups), where the main focus is to grow Startup Output (or the number of startups locally), early-stage funding (Seed and Series A rounds) and a more connected local community. It is the leading ecosystem in the nation and sometimes, in the region. Examples include Manila, Calgary, and Bahrain.

The main challenge of Activation-phase ecosystems is that they experience resource leakages (startups, talent, capital) to later-phase ecosystems nationally and globally. This makes it very challenging to grow the ecosystem to the Globalization phase without important investments by local governments and community leaders.

Startups in ecosystems that are different from or geographically distant to innovation markets (i.e. those in the United States, Western Europe and parts of Southeast Asia) often experience accelerated growth by solving local problems and adapting global innovations to the local reality. Kuala Lumpur-founded Grab is a great example, having built on Uber’s model but solved local payment issues that made it very difficult for Uber to enter the Malaysian market, with Grab later becoming a payment leader across Southeast Asia and setting up headquarters in Singapore.


A Globalization-phase ecosystem is characterized by an output of more than 1,000 startups, increased startup experience in the ecosystem, and a series of exits that trigger national resource attraction. These ecosystems are national leaders, or sometimes regional leaders. Examples include Melbourne, Miami, and Helsinki.

Triggers to this phase include increased Startup Experience (the accumulation of knowledge and resources), leading to the production of a series of regionally impressive exits, usually greater than $100 million.


An Attraction-phase ecosystem is characterized by usually more than 3,000 startups, where the main objective is to drive global resource attraction to significantly expand the size of the ecosystem and address resource gaps. Ecosystems in this phase are usually regional leaders (or nationally leading if they’re in the United States). Examples include Singapore, Amsterdam, Berlin, and Chicago.

Triggers to this phase include a series of globally impressive events such as the creation of unicorns and $1 billion+ exits.


An Integration-phase ecosystem is characterized by more than 5,000 startups, with the ecosystem integrating into the global fabric of knowledge, producing global business models, and achieving higher global market reach. Ecosystems in this phase are globally leading and are considered one of the leading sectors of value creation for the local economy. Examples include Silicon Valley, New York City, and London.

Integration Phase ecosystems should prioritize deeper alignment with the economic, social, and regulatory fabric of the economy to support large-scale innovation and equitable outcomes.

Triggers to this ecosystem phase include self-sustainable Global Connectedness levels and extremely high global resource attraction.


Stephan Kuester undefined
Head of Ecosystem Strategy, Startup Genome

Ecosystem Support Organizations Portfolio Management: Are We Prepared for the Future?

Tech ecosystems have shown sustained growth at a speed exponentially faster than in any traditional industry sector. With tech ecosystems maturing all over the globe and with many more cities and regions having highly functional tech entrepreneur communities, support requirements are changing at pace. It is imperative for ecosystem leaders and policymakers to adapt their development strategies and the support mechanisms that they make available to budding entrepreneurs accordingly. Ecosystem Support Organizations (ESOs) have made great contributions to ecosystem development; however, considering the pace of change it is critical to ask whether an existing ESO portfolio reflects entrepreneurs’ support needs.

Largely Focused on Early-stage Support

Research that we conducted in 2022 showed that current ESO programs are focused primarily on early-stage ecosystems — a staggering 95% of all spending is directed here — and the needs of entrepreneurs starting their businesses. However, with many ecosystems showing significant growth, it is essential to understand development trajectory and the respective implications for founder support needs. Only very few ecosystems globally provide the support needed for entrepreneurs to navigate the critical growth and global expansion phases. Scenario-modeling can help to understand ecosystem growth and the changing composition of the startup community and its evolving support requirements.

It is essential to identify key resource and success factor gaps in order to address them. Ecosystem leaders need to clearly understand what support systems exist and what specific resource gaps remain, be they in funding, access to talent, or a lack of collaboration and Local Connectedness. The ESO portfolio needs to address these gaps, and planning needs to be informed by a deep, data-driven assessment of the existing entrepreneurial ecosystem.

Adapting to the Needs of Deep Tech

Deep Tech has become the major driver of ecosystem growth, and founders working in this area have significantly different requirements from previous generations. Support programs in these new sectors require higher levels of technical depth and expertise, and development and investment cycles tend to be significantly longer. It is crucial that leaders appreciate the opportunities in Deep Tech and adjust support programs accordingly, in terms of both programmatic design as well as recognition of longer-term funding requirements.
With the rise of Deep Tech, we also see specialist ESO programs demonstrating higher participant attraction, satisfaction, and outcomes, e.g., with specialist programs aimed at individual sectors such as Agriculture or Bioscience helping to build bridges and effective collaboration between university researchers and a dynamic entrepreneurship community. Startup community leaders need to provide specializations from incubation to later-stage scaling to more effectively support the complex technical, regulatory, and business model-related requirements of these new ventures.

Creating New ESO Funding Models

In today's economic climate, financial sustainability is critical for ESO programs and the overall program portfolio. Slower economies and reduced tax revenues put pressure on public funding. Furthermore, political leadership and budgets are subject to periodic change, resulting in disruption to ESO funding and performance. Traditional sources of program income, particularly those related to traditional real estate models, have become less attractive since the pandemic. ESOs need to be prepared to pivot accordingly and to develop different and more diversified income streams.

In our opinion, it is a critical task for ecosystem leaders and policymakers involved in ecosystem development to review and to develop ESO portfolios regularly, to track individual program performance, and to drive ESO strategy and change management. Doing so will ensure that we are prepared for the future and can continue to support the ecosystem and our entrepreneurs as they continue to grow and to evolve.