Emerging markets are at risk of premature de-industrialisation, a situation in which they shed manufacturing jobs before fully developing industrial economies should technological growth not translate to individual improvement according to a new report.
The Global Startup Ecosystem Report 2017 received by BusinessDay was first released in March 2017 and updated in April is a collaborative effort between Startup Genome and Global Entrepreneurship Network (GEN).
“It is a leap forward in our understanding of startup ecosystems and the global network of capital and connections that drive them. It also provides advanced analysis of the specific drivers of startup ecosystems, based on survey responses from thousands of technology start-ups from around the world,” said Jonathan Ortman, president, GEN.
In two years time, the reported stated, the global technological sector could double its share of world GDP as expansion of software innovation continue to rake in trillions of dollars in economic value. Tech start-ups are expected to drive this growth.
“Yet if current concentration levels persist, 80 percent or more of the value created by the tech sector will accrue to only a few cities in only a handful of countries,” the report said.
It noted that 60 to 80 percent of jobs in the emerging markets are at risk of automation.
Inequality could arise in a situation where markets are shedding manufacturing jobs because of the need to automate. This therefore calls for an urgent attention in building stronger startup ecosystems. To achieve a thriving startup ecosystem, the report noted, there should be aggressive investments to ensure that more people at the bottom are part of the wealth creation.
“The world needs more vibrant startup ecosystems to be part of the global circulation of innovation. This can be done if we work together to build a more distributed global startup ecosystem. We know this is possible because a handful of places have successfully taken steps to foster thriving start-up ecosystems,” the report said.
It takes about 20 years to develop a thriving startup ecosystem. Hence countries can build on prior knowledge and lessons, adapting them to different contexts and local strengths and weaknesses, and investing scarce resources in a way that create more start-up ecosystems in more places.
