Forbes recently compiled a list of the ten best cities to launch a startup around the world with surprising results. No American cities were listed, but London – with its extortionate rent and limited space – was praised, due to its surge of investments in 2015. Some have argued that new businesses are finding creative ways around being unable to rent formal office space.
However, entrepreneurs have admitted to a fear that the impending Brexit referendum may have a negative impact on their future prospects to the point that they may even relocate their businesses altogether.
So why aren’t the merits of those other locations as fiercely contested by startups? What are they doing right that the UK isn’t?
How are European entrepreneurs coping?
Certain critics have claimed that mainland Europe is finding it difficult to develop a startup culture to rival Silicon Valley. One German business lobbyist observed that “Americans are fine with selling something that is 50% done.
The German guy waits until it is 100% done.” Small pockets of European cities are finding their feet, though. Much like how a younger generation of artists are taking their wares to Berlin, startup culture is beginning to permeate the German capital.
Berlin itself is not Germany’s financial centre – Frankfurt is – but its low cost of living and influx of young creatives has made it a melting pot for new businesses to make a start in spite of this.
Amsterdam is also being hailed as a hotbed of tech creativity. As home to the EU HQs of both Uber and Netflix, as well as a supportive infrastructure for new businesses, everything is in place, apart from easy access to the one thing all startups need: capital.
Startup culture makes its mark further afield
The Forbes article notes the difference in views between generations in parts of the world where the buck continues to stop with parents. However, attitudes towards the inherent risks and relative lack of security in entrepreneurship are softening.
A total of $4.5 billion investment capital was given to Asian financial tech startups in 2015, a 400% increase on the previous year. Over half of this came to China, where the city of Shenzen – one of the country’s primary Special Economic Zones – has developed loan structures and incubator-style working spaces for their young entrepreneurs.
Meanwhile, the Australian government are taking a far more proactive role in improving the lives and growth of its nascent businesses.
The country’s Prime Minister Malcolm Turnbull announced new tax laws, which “plan to encourage greater risk-taking” amongst its venture capitalists.
A similar law was introduced in George Osborne’s budget in mid-March, the British chancellor’s amendments to “Entrepreneur’s Relief” may not directly aid business-owners.
Instead, it has offered a 10% rebate to investors who do not directly work for a company, alongside its existing rebate for those who do.
While this may allow new businesses to be funded in the future, it isn’t the most encouraging development for a country whose small business owners are already seeking a new place to set up shop.