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Silicon Valley to lose its tech centre crown to global cities

22 Feb 2019
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It would seem Silicon Valley as the world’s ‘tech centre of innovation’ is on the verge of being usurped by other cities around the world - that’s if a recent global survey of 740 technology industry leaders is to be believed.

For the first time in KPMG’s annual Global Technology Industry Innovation Survey, more than half of the respondents believe Silicon Valley will no longer be the technology innovation centre of the world in four years.

"The belief that Silicon Valley will be displaced as the leading hub underscores the continuing decentralisation of technology innovation, spurred by investment in other cities and regions globally, as well as contributing factors in Silicon Valley," says KPMG Global and US technology leader Tim Zanni.

“Several much-discussed factors ranging from the cost-of-living to an overmatched infrastructure to questions about corporate culture are contributing to the perception that Silicon Valley may not continue to dominate tech innovation in the coming years."

Almost 60 percent of respondents believe that in four years’ time it is likely or very likely that the technology innovation centre of the world won’t be Silicon Valley.

While not specifically addressing which city would usurp Silicon Valley, in a separate questions respondents earmarked the top 15 cities to become the top tech hubs in addition to Silicon Valley, which are:

1) New York 2) Beijing 3) Tokyo tied with London 5) Shanghai tied with Taipei 7) Singapore 8) Seoul 9) Boston tied with Austin 11) Berlin 12) Hong Kong 13) Washington D.C. 14: Paris 15) Tel Aviv

The study shows that countries outside of the US and China are rapidly closing the gap in the race to become technology innovation leaders.

When considering the most promising market for tech innovation and breakthroughs that have a global impact, 23 percent of those surveyed named the US compared to 34 percent in last year's report. China remained second at 17 percent compared to 26 percent a year ago, followed by the U.K. at 9 percent, with Japan ranked fourth and Singapore and India tied for fifth.

"Even when faced with pressing issues that call for funding, cities and countries are carving out significant investment to become a technology innovation hub due to an expected broad economic impact," says Zanni.

"They are acting on the Nobel Prize-winning theory that investing in tech innovation, the knowledge sector and human capital will drive long-term economic growth."