SHM2019: Startup Highways Part III

Big cities grow in accordance with smaller places, as we know from a wide array of urban planning literature (e.g. “Planet of Cities” by Vernon Henderson). This means, we see symbiotic relations among large hubs and smaller cities. Looking at the emerging transnational startup networks, we suspect a similar pattern in the growth of startup hubs.

London is considered as the most prominent startup place in Europe for years, but it could not gain this title without accessing resources like talent, capital and ideas from other hubs. Even more so, it probably has been outsourcing some activities that would be too costly to locate in downtown London to other hubs. In a transnational startup world it is not completely surprising to see that founders prefer opening second offices rather in Lisbon than in Birmingham or another UK city.

While maybe traditionally we had seen a strong connection to the Scandinavian region, the Atlantic Triangle has taken this place within the last couple of years, connecting Dublin and Lisbon closely to London. While of course the flows into London are relatively higher, around 3-4% of London-based founders recognize Lisbon and Dublin as desirable startup locations, showing the mutual recognition between them.

The Atlantic Triangle

Lisbon has a clear complementarity with London and Dublin in terms of value for money. While, Dublin might have been a good outsourcing spot for costly activities in the past, the steep rise of cost of living in the Irish capital changed the picture drastically since 2015. Lisbon, apparently won over this recognition as a hip and tech-savvy, but still affordable outpost of the London tech community.

How Does Dublin Fit In?

How does Dublin fare? We have discussed this in an article on irishtechnews.ie last year, and it is time for an update: While Lisbon has constantly been climbing the ranks, Dublin dropped out the top 10 last year and remained on rank 11 in 2019. Compared to London and Lisbon it maintains a competitive edge in terms of business friendly regulation, which 93% of founders endorse. In comparison to Lisbon, Dublin seems to be better positioned with industry and offers better funding opportunities too. However, almost in all verticals, Lisbon reaches more founders than Dublin. Only in the Tech and Hardware sector, Dublin seems to be slightly ahead.

It seems that we observe an adaptation process, where Dublin has lost a comparative advantage in the relation with London, but tries to move to a different value proposition around ease of doing business and industry cooperation. The slow down of Dublin‘s decay in the rankings as well as the mutual recognition between Lisbon, Dublin and London could be signs for this transition to be successful. Finally, also the Brexit might work towards Dublin, allowing it to offer London-based startups a foot in the EU without much bureaucratic and language related hurdles.