Six alternatives, local startups and government support – in Rest of World retelling .
The largest city in the country, its cultural, industrial and technological center. It is home to the oldest bank in Nigeria and the largest local film studio. According to statistics, 77 people from different cities of the country move here every hour.
The popular Jumia marketplace is located in Lagos. There are also many fintech startups like OPay, PalmPay and others, trying to solve the problem of money transfers in Africa.
The local IT market is known abroad:
- In 2016, the Y Combinator venture fund came to Lagos – here it held its only event in Africa.
- And in 2015, entrepreneurs founded the Paystack payment service in Lagos – and five years later it was bought by the American company Stripe for $ 200 million. At that time, this was the largest deal in Nigeria in the technology sector.
Nigeria started entrepreneurship earlier than other African countries, journalist Alex Onukvue said. According to him, the Nigerians built banks on their own in the 1980s and founded IT companies in the 1990s and 2000s.
But not everyone likes Lagos. The founder of the Konga e-commerce platform, Sim Shagaya, has launched an EdTech project in another Nigerian city, Jos. He chose it to avoid the stress of the metropolis and traffic jams in Lagos.
Lagos became an IT hub not because it was planned, but out of necessity. Next time, we will plan everything and distribute the market among all cities in Nigeria.
– Adewale Yusuf (founder of TechPoint)
IT center in the suburbs
Yaba is a suburb of Lagos. Its narrow streets and “ancient” infrastructure do not immediately give the impression of an IT center, writes Rest of World. However, two universities are located here – the University of Lagos and the Yaba College of Technology. And there is also a stable internet on the outskirts.
Here, African companies began to open headquarters, such as the Jumia online store and the Co-Creation Hub, a business incubator for startups – it has released more than 120 projects and received the nickname “Yabakonovaya Valley”.
The University of Pernambuco, where Recife is located, graduated many IT professionals in the 2000s. But they all traveled every year to the larger cities of Brazil, such as São Paulo, or abroad.
To keep talent in the city, the authorities established a Porto Digital IT center in Recife. The government, university and local business established the independent organization Núcleo de Gestão do Porto Digital (NGPD) in 2000. She is responsible for:
- Attracting companies to the region.
- Partnerships with universities, search for qualified students.
- Connecting companies to local supply chains.
- Connecting startups with investors.
Porto Digital has transformed a coastal city in Brazil’s impoverished northeast into a thriving center for the IT and AI market. The project received $ 430 million in revenue in 2019.Rest of world
Thanks to NGPD, abandoned buildings and historic sites in Recife have been transformed into offices, coworking spaces and cafes. The state has cut local and federal taxes by 60% for companies located in the city center. Also, businesses can use the conference rooms and laboratories from the authorities for free.11659People from over 300 companies are eligible to vote on the Porto Digital board.
IT center problems
However, the head of Porto Digital, Pierre Lucena, admits that it is extremely difficult for them to compete with the richer cities in southern Brazil. In his opinion, in that area, startups are invested much more actively than in Porto Digital, but at the same time they expect less in return.
Most successful Porto Digital company
Tempest is the largest cybersecurity company in Brazil, which sold a majority stake to the aerospace conglomerate Embraer in 2020. Tempest was founded at Porto Digital. Its executives received business training, received tax breaks and hired staff from local universities.
Over the past twenty years, Bangalore has become the center of the Indian IT industry, estimated at $ 200 billion. But if it was previously known as an outsourcing center, today Bengaluru seeks to become a center for startups, the newspaper writes.
In the mid-2010s, young IT professionals emigrated from India. “I just felt like I had no opportunity in India,” says Hemant Mohapatra, one of those who went to work in the United States. But over time, he and others returned to invest their funds and expertise in their home country.
Since then, unicorn companies such as the Flipkart online store and the Ola delivery service have sprung up in India. The publication calls Bengalur the world startup capital: there are 14 unicorn companies in the city.64Companies are vying to be unicorns soon. Their cost is estimated at over $ 100 million.
Stories of people
Hemant Mohapatra, a partner at the venture capital firm Lightspeed, recalled that in the 2010s, when he was a student, being an entrepreneur was synonymous with unemployment. “I couldn’t even get married, no one would want to date me,” the businessman added. He also revealed that he held technical meetings in cafes and pubs and traveled 40 km to discuss Android development.
Rishab Ramanathan, 24, grew up in Bengaluru and now works for Apple overseas. He hopes to return home one day.
Silicon Valley is focused on technology and deals with everything related to it. But Bangalore has more movement, chaos and vibrant colors all around.Rishab RamanathanApple developer
Bengaluru IT Industry Center is a 325 hectare “Electronic City”. In the 1970s, it was founded by Ram Krishna Balig, the first chairman of the Electronics Development Corporation of Karnataka. He deliberately chose a name for the city so that everyone would immediately understand its essence.
Today, more than 200 IT companies are headquartered in the area, including software developers Infosys and Wipro. Also nearby is the residential area of Koramangala – with palm trees lining the streets and many bars.
Most expensive startup in India
This is considered Byju’s educational project. It is named after the founder of Bijuu Ravindran, known for being part of a new wave of Indian IT entrepreneurs left to pursue a career in their home country rather than leave for the United States.
Over the past two years, the company has attracted more than $ 1 billion in investments. The director said Byju’s plans to hire about 7,000 people next year.
Shenzhen is the world capital of equipment manufacturing with a frantic pace of life, according to Rest of World.
When, just a month before the iPhone launched, Steve Jobs wanted his smartphone to have a glass screen, thousands of engineers in Shenzhen switched to almost 24/7 operation. The project, which usually takes months, here in Shenzhen, took only a few weeks, if not days, the newspaper notes.
Back in the 20th century, Shenzhen was a small border town with a population of 30 thousand people. However, in 1979 it began to turn into a metropolis and in 2020 it already had 13 million people. The volume of exports from $ 9.3 million in 1979 increased to $ 244 billion in 2017. Today, the city not only manufactures components for the rest of the world, but also creates its own products.
In 2019, China filed more international patent applications than the United States, with half of them from Shenzhen. The year before, 4.2% of the city’s GDP went to research and development.
As China strives for full IT independence, Chinese IT companies, including DJI, Huawei and Tencent, are taking the lead.
But the pace of this city has a downside, the newspaper said. There are also fakes of well-known electronics brands that can enter the market even before the launch of the original product. And the speed of the city is so high that the local work schedule was called “996”: work from nine in the morning to nine in the evening – six days a week.$ 31 thousandGDP per capita in Shenzhen. The highest rate among all Chinese cities.
The market where counterfeits originated
Once in Huaqiangbei there was a huge market for electronics, stalls sold everything – from finished devices to individual parts for them. In this environment, a culture of counterfeiting developed, as factories quickly copied ideas and produced goods for these sellers.
But Huaqiangbei’s popularity is declining. As in many areas of the city, the once cramped electronics markets are gradually emptying . They are being replaced by cosmetics stores.
Largest IT company in Shenzhen
Tencent develops software and operates the WeChat application, without which it is difficult to imagine life in China, the newspaper notes. The corporation is also trying to capture the gaming industry market: it owns stakes in various development studios, including those who own Call of Duty and Pokemon.
Tel Aviv, Israel
Despite having a population of less than 9 million, Israel had more NASDAQ-listed companies in 2015 than any other country except the United States and China.
Many local firms maintain close relationships with Silicon Valley. Top managers often travel there from Israel to get funding and hire a sales force. By some estimates, up to 100,000 Israelis live in Silicon Valley, many of whom work in technology.$ 21.74 billionIsraeli companies received for 2019 as a result of mergers, acquisitions or public sale of shares.
How Israel competed with the United States
Investor Oded Hermoni believes Israel’s small size is an advantage. “There are things that are easier for a small boat to do than for a large ship,” Hermoni said and noted that the country is cooperating with China and the United States.
He believes there are two options for Israeli companies:
- Leave the headquarters in Israel and hire key teams in the United States.
- Relocate the headquarters to the United States while keeping the IT department in Israel.
One well-known example of such international collaboration is the Waze map service. The company officially moved to Palo Alto in late 2010, but most of its employees remain in Israel. In 2013, Google bought it for over $ 1 billion.
In 2014, Waze CEO Noam Bardeen wrote on his blog that the reasons for the move were obvious because the US is the main market for the app and the company needed PR in local media.
Since 1999, the Azrieli Center has been operating in Tel Aviv – many of the country’s largest IT companies are concentrated in it, including:
- Insurance software developer Sapiens.
- AI processor maker Habana Labs, which was bought by Intel for $ 2 billion.
One block away is the gleaming Azrieli Sarona Tower, the tallest building in Israel since it opened in 2018. Some of the largest IT companies, including Amazon and Facebook, have rented office space here. In 2020, Facebook decided to take two more floors as it hopes workers will return to the office after the pandemic.
Wix website builder
The company went public in the US in 2013 and has a market value of $ 16 billion in 2021. Wix is just one of many IT companies, along with Taboola and Waze, founded by alumni of the Israeli military intelligence services.
For a long time Medellin tried to get rid of the reputation of the center of crime and drug addiction, from the story with Pablo Escobar, who organized a cocaine cartel in the city. And he succeeded, the newspaper writes. Now young IT professionals come here for beautiful landscapes, low prices and a tech economy.
However, unlike other popular cities like Bengaluru or Tel Aviv, Medellin has not yet had any successful startups going public. The city does not even have its own unicorn companies. In all of Colombia, there is only one “unicorn” – Rappi, which is located in the capital of the country, Bogota.
But there are good universities and an active local IT community that holds business meetings and conferences throughout Latin America, says Rest of World.
In Medellin, they are actively hiring employees from foreign companies, especially since last year, as many have switched to telecommuting. The new mayor, a former developer, is actively supporting the city’s IT development. As a result, Medellin became known as the “Valley of the Software”.379IT companies have opened offices in Medellin over the past six years. They have created over 11 thousand jobs in the city.
The most significant technology companies in Medellin are international. For example, the investment fund AI Fund and the online educational platform Skillshare, which raised more than $ 110 million and opened an office for engineers in this city.
Not Silicon Valley
“Don’t tell me you’re writing another article about Silicon Valley in Colombia,” political risk analyst Sergio Guzman told reporters. In his opinion, Medellin attracts foreigners precisely because of the legends about Pablo Escobar.
Local entrepreneur Elkin Echeverri Garcia also believes that Medellin does not claim the title of “PO Valley”. He noted that they do not work for the sake of fame, but for the sake of improving the standard of living in the country.
After 16 years in Europe, developer Carlos Alzate returned to Medellin as General Manager of the AI Fund’s 50-employee office. According to him, the city has its own charms: a comfortable size, year-round warm spring weather and friendly people.
Support for local projects
In the 1950s, Empresas Públicas de Medellín (EPM), a public utility company, was created in Medellín. In the 2020s, the company is contributing hundreds of millions of dollars to the city’s development.
EPM is funding the Ruta N project, a hub that helps local IT companies with investors. The center also cooperates with corporations so that they open in Medellin not just technical support offices, but serious engineering departments.