A Note From a Founder

We stand at the beginning of the AI era – one that will define the economic trajectory of nations for decades to come. 

Global startup Ecosystem Value has decreased by 31% in aggregate since our last report, a correction to the COVID-induced inflation in valuations. But the big picture is this: since the 2019 pre-COVID GSER, global Ecosystem Value has grown at a compounded annual rate of 11% – about four times faster than our economies. This moment feels remarkably like 1994, two years after Netscape launched the Web era. Two years after the launch of ChatGPT, the third wave of exponential growth of startup ecosystems has started.

What sets this cycle apart is the scale and speed of transformation AI brings. Leading institutions estimate that over 30% of jobs in every country will be affected at an accelerated pace, leaving many unable to reskill or upskill in time – but AI will create almost as many new jobs. 

The question for all of us is: where will those new jobs be created?

Across the world, AI transition budgets are being spent almost entirely on infrastructure, research, and adoption – investments that will protect national competitiveness by increasing productivity, i.e., reducing headcounts. These budgets are focused on adopting existing AI solutions developed in the U.S. and China.  Our research shows that unless you act, it will not get better: over 90% of venture funding to AI-native startups formed in 2023 and 2024 went to U.S. and Chinese startups – Silicon Valley alone captured 63%. 

Entrepreneurial AI policy – your engine of local job creation – is being overlooked.

Government and agency leaders in charge of startup ecosystems have, in this critical moment, the most important job of steering their societies to invest locally to produce long-term prosperity. Instead of investing 100% of the AI budget in U.S. and Chinese innovation – the value of which will be eroded by next  year – allocate at least 25% of that investment to building your local AI-Native startup ecosystem. The tradeoff is clearly positive. Local entrepreneurs will invest into local talent, creating jobs, developing the local AI experience, and creating some of the future AI solutions adopted by local and international customers.

Let’s support them. For this very purpose, we have formed the Entrepreneurial AI Policy Coalition. If you’re a minister or agency leader, contact us. Together we will make the case to increase the budget for your local AI-Native startups. We will craft and implement the new policies and programs needed to accelerate the transition of your startup ecosystem to AI-Native. 

Let's shape the AI era into one where every country and city captures its fair share of new jobs and economic growth.

Join us in this mission. 

JF and the Startup Genome Team