In the space of just a few years, mobile phone apps, once the domain of an unnoticed group of start-up specialists, have become a popular and valuable mainstream investment prospect. This has left many locations asking themselves, do they have the 'app-titude' to foster the start-ups working in this new sector?
These creative new start-ups require an environment that encourages open debate, a strong tech community that supports collaboration and a specific talent pool. Take Amsterdam, for example. It was in the Dutch city that former Apple employee Mike Lee, who hails from the US, co-founded a non-profit meta-organisation, Appsterdam. He chose Amsterdam because he says it offers the right environment to provide a common ground for app makers. The group now has more than 2500 members.
One of the advantages of Amsterdam, says Mr Lee, is its gezellig – or cosiness. He adds that the city’s tradition of openness creates an environment where people can meet at a middle ground.
“We’re at the forefront of app software development, and we need to be able to coordinate and operate in an environment where we do not bicker about things such as IOS versus Android, Mac versus PC, or design versus engineering,” says Mr Lee, adding that Amsterdam is already filled with creative and marketing people, and has the right level of affordability.
Space to invent
Berlin is another European city that is developing an impressive tech ecosystem. Recently, innovation magazine Red Herring named Berlin-based app start-up Zoobe as one of the 100 most promising technology companies in Europe. In 2012, Zoobe released an app that turns personal voice recordings into free animated video messages using patented speech-recognition software. The company has since raised a seven-digit sum to further develop its animated avatar messaging service.
Recognising the talent and opportunities available, global tech giants have started to take note of Berlin's start-ups. For example, late last year Google pledged $1.3m to the Factory, a 12,000-square-metre property development in central Berlin that aims to bring established companies and new start-ups together in a work/play environment.
These sorts of communal spaces are widely seen as a vital part of any successful tech hub. In Copenhagen, a group of tech executives have created the Founder's House, an invitation-only workspace designed to incubate up-and-coming tech entrepreneurs.
Copenhagen has already had one major tech success story in the shape of cloud-based collaboration service Podio, which allows workers to collaborate as well as create their own apps to assist with specific tasks. Today the online work platform, which has received $4m in venture capital funds, is split between its large Copenhagen headquarters and San Francisco in the US.
Podio executives report that Copenhagen is a good start-up city because of its culture and tradition of collaboration, as well as its strong coding and design skill base. As in Amsterdam, English is widely spoken in the Danish capital.
Across the Atlantic in New York, a monthly event – the New York Tech Meetup – has been running since 2004, and offers easy entrance into the city's tech world.
“It’s often the first place people get exposure to the scene,” says Rameet Chawla, an architect with Fueled, a mobile app developer. “For example, finance is considered a big brain drain. When talent wants to leave the finance world, one of the first places they consider going is the Meetup. It provides a way to connect people in person and is a great gateway to the rest of the technology space.”
New York is already considered a global hub for multiple industries and is well positioned to become one of the leading global tech hubs. “Tech in New York is booming,” says Mr Chawla. “The New York Tech Meetup has proven itself by getting people from many different industries involved in the tech community.”
Not only is the city home to large numbers of creative artists, it also houses to many of the world’s largest companies and their clients. The city is also filled with students who attend some of the best institutions in the world. “Students in New York have access to incredible facilities and schools are growing their engineering programmes,” says Mr Chawla.
For example, Cornell University plans to build a campus on Roosevelt Island devoted to technology. “There are also foundations in place that are leading it to be a substantial tech hub for the world,” adds Mr Chawla.
Mr Chawla says that another benefit of New York is that it “feels” a lot closer to European tech hubs than it perhaps is, and scores of other global industries from consultants to media conglomerates and fashion houses are based there. “San Francisco just has technology,” says Mr Chawla. “If you have a business-to-business or software-as-a-service business, it makes sense to be in Silicon Valley. But if you’re an entrepreneur looking to work with broader industries, you should be in New York.”
There is no disputing that the race is on, for cities to establish themselves as leading global tech hubs. Singapore, which has a long-standing commitment to research and innovation, has set its sights on becoming a hub for health technology. Its government plans to invest some $12.8bn between 2011 and 2015 as part of a research, innovation and enterprise plan.
As part of the plan, the country has developed a package of incentives to attract large employers and start-ups alike, which includes tax credits for R&D spending. As well as these incentives, Singapore also offers investors cutting-edge telecommunications infrastructure and a large talent pool of science graduates from its highly ranked engineering programmes. The inducements seem to be working. In recent years pharmaceutical giants GlaxoSmithKline, Novartis, Abbott, and Roche have all opened major operations in Singapore.
Elsewhere, other tech hubs are in development, including Israel's Silicon Wadi, Moscow's Skolkovo Innovation Center, Dubai’s Silicon Oasis, Malaysia’s Multimedia Super Corridor, Bangalore's eCity, and China's Zhongguancun Science Park.
Silicon Wadi offers an environment where risk taking is rewarded and failure tolerated. It is anchored by elite universities such as Technion. Some 250 multinational companies have R&D centres in Israel, 80 of which are Fortune 500 firms.
Moscow’s Skolkovo Innovation Centre aims to foster science and technology by providing assistance to innovative companies that are project participants. Its strategic goal is to pool international intellectual capital, thereby stimulating the development of breakthrough projects and technologies. The centre is concentrating on five clusters: information, biomedical, energy efficiency, nuclear and space.
Dubai Silicon Oasis, which is wholly owned by the government of Dubai and spans 7.2 square kilometres, is designed as both a living and working integrated community. Silicon Oasis is a free zone authority, which means it provides free-trade zone incentives and benefits to companies operating within the tech park.