What is Driving Life Sciences Startup Success?
Startup Genome’s coverage of ecosystems is growing. Our analysis, expanding from 60 ecosystems in 2018 to 150 in 2019, has allowed us to rank the top 30 startup ecosystems globally. In the past, our ranking had included only the top 20. Silicon Valley remains in the position it has held since 2012: the #1 global startup ecosystem. Beijing has risen into the top 3, tying with London. The top 5, however, remain the same as they were in 2017: Silicon Valley, New York, London, Beijing, and Boston.
A key change in this year’s Global Startup Ecosystem Ranking is that we added Life Sciences and Deep Tech factors to our analysis. To do so, we’ve worked with Professor David Rigby at UCLA and Hello Tomorrow, a deep technologies-focused organization. This comprehensive analysis drives part of the changes in rankings. For example, ecosystems such as San Diego and Washington, D.C., now appear in the top 20 due to their strength in Life Sciences.
Life Sciences is the sector concerned with diagnosing, treating, and managing diseases and conditions. This includes startups in Biotech, Pharma, and Medtech (also referred to as a medical devices). The dynamics of building and growing a Life Sciences startup differ from other areas of technology. Timelines are long as intensive research must be followed by rigorous clinical testing and repeated interactions with government. Funding amounts need to be larger, and the payoff period can be more uncertain and farther down the road than in software. Human capital, while important for a startup in any sector, is of overriding importance in Life Sciences because of the in-depth knowledge required. Those dimensions — research, funding, talent, and knowledge — also mean that Life Sciences startups are highly dependent on their surrounding ecosystem. How well a regional startup ecosystem does in providing resources, and access to those resources, will shape the success of local startups.
Where are Life Sciences startups enjoying the greatest access to necessary resources? Which resources matter the most to startup success in Life Sciences? And, where are the hotspots that founders and investors should look to for building a Life Sciences company?
Our deep analysis in Life Sciences of 60 ecosystems from 28 countries, over 30 metrics, finds:
- Resources such as Knowledge and Infrastructure are widely distributed across ecosystems, yet Performance and Funding are not.
- A handful of U.S. ecosystems — led by Silicon Valley, Boston, and San Diego — dominate when it comes to startup success, growth, and exits.
- Relatively small ecosystems, such as Lausanne-Bern-Geneva and even San Diego, can outperform in Life Sciences because of a strong focus on the sector.
The top 20 Life Sciences ecosystems are displayed in the table below. Ecosystems are scored and ranked on six Success Factors. These 20 regions outperform ecosystems from the rest of the world in providing Life Sciences startups with well-resourced environments in which to succeed.
Ecosystems in the United States dominate the ranking, with six spots in the top 10 and nine out of the top 20. European ecosystems (including Jerusalem-Tel Aviv) account for seven of the top 20, while China’s two main ecosystems — Shanghai and Beijing — rank #9 and #11, respectively. The Life Sciences ecosystem in London includes Oxford and Cambridge.
Evident in the overall ranking, there is wide variation across some Success Factors but a tighter distribution on others. The mostly strongly correlated Success Factors with overall scoring are Performance and Funding — this means that startup success and the availability of early-stage funding are highly concentrated, especially in Tier 1 ecosystems. By contrast, lower-ranked ecosystems such as Munich and Singapore perform well in Knowledge and Talent, respectively. Silicon Valley and San Diego score comparatively low on Infrastructure.
Interestingly, two ecosystems that are in the top 20 for Life Sciences are not in our overall top 20 ecosystem ranking: Lausanne-Bern-Geneva and Munich.
You can find more information on what's making Life Sciences startups thrive in the 2019 Global Startup Ecosystem Report. The Report also covers AI, Blockchain, Agtech and New Food, Cybersecurity, Clentech, Fintech, Edtech, Gaming, and Adtech startup sub-sectors.
Editor's Note: This post's content has been largely pulled from the the Life Sciences section of the 2019 Global Startup Ecosystem Report, which was co-authored by Professor David Rigby of UCLA.