Faced with economic uncertainty, increasing geopolitical polarization, and rapid introductions of deep technologies, more than ever policymakers responsible for driving and managing their national innovation ecosystem performance in a global ecosystem need more timely data and analysis to drive decisions. After an eight-year hiatus from publishing this data on a national basis, this month, GEN in partnership with Startup Genome introduced the APEXE Nations Report.
This initiative, unveiled as part of the G20 Social Summit in Rio de Janeiro, represents a leap forward in our collective understanding of startup ecosystems across for now the G20 nations. For the first time since our work ranking ecosystems began, we have a standardized methodology for measuring and comparing startup economies at a national scale, providing a view of the entrepreneurial landscape across the world's leading economies.
Key Insights and Rankings
The APEXE Nations Report offers a wealth of insights into the state of entrepreneurship across the G20. At the forefront of the rankings, as perhaps expected, we find the United States claiming the top spot, followed closely by the United Kingdom and Canada. This trio of nations demonstrates a powerful combination of innovation potential, robust startup ecosystem performance, and effective policy actions.
India ranked 4th overall and 3rd in Lab-to-Startup Conversion. This achievement underscores India's remarkable ability to translate innovation potential into tangible startup success, despite facing challenges in other areas. With an impressive Ecosystem Value to GDP ratio of 10.8% and three ecosystems in our current cities analysis – the Global Startup Ecosystem Report (GSER), India exemplifies the power of effective ecosystem development.
China's position at 7th place tells a nuanced story. Although its normalized Innovation Potential is lower than the peer average at the country level, China's Startup Ecosystem Performance outpaces expectations, boasting four ecosystems in the GSER Top 40. This suggests that with targeted improvements in startup policies, China will potentially vie for a top three APEXE ranking.
The report also reveals the underperformance of several highly innovative economies in again, translating their potential into startup activity. Countries like Australia, Germany, and Japan – despite their strong innovation foundations – are not fully capitalizing on their potential when it comes to fostering thriving startup ecosystems. This disconnect signals a critical need for more precise and targeted policies to bridge the gap between innovation capacity and entrepreneurial output. To underscore the importance of this point, the report estimates that a staggering $2.7 trillion in global Ecosystem Value would be unleashed if lower-performing G20 nations could elevate their Ecosystem Values relative to GDP to match the current top quartile. This figure represents not just abstract economic growth, but real opportunities for job creation, technological advancement, and increased economic resilience worldwide. It underscores the immense value that can be unlocked through strategic policy interventions and ecosystem development.
Innovative Framework
At the heart of the APEXE Nations Report lies a framework designed to provide a holistic view of national startup ecosystems. This framework is built on three main pillars:
- Innovation Potential: This factor measures the ingredients or components valuable for entrepreneurship that typically lie outside the direct control of entrepreneurship ministries. It includes sub-factors such as Business Foundations, Talent, Infrastructure, Knowledge and R&D, and Market Access.
- Startup Ecosystem: This represents the activity and output of a country's startup sector, encompassing sub-factors like Funding, Programs, Performance, and Talent experience.
- Startup-Relevant Policy: This factor evaluates the sophistication of a country's startup-relevant policies and government interventions, focusing on areas that can be directly influenced by policymakers.
A key element of this new framework is the Lab-to-Startup Score, which measures how effectively countries are converting their innovation potential into startup ecosystem performance. This score is calculated as a function of the Startup Ecosystem Score (weighted 2X) minus the Traditional Innovation Ecosystem Score, providing a nuanced view of ecosystem efficiency.
Crucially, the framework normalizes metrics by population size and GDP, allowing for fair comparisons across diverse economies. This approach quantifies how effectively a country's resources across the whole nation are being utilized to produce economic impact through entrepreneurial innovation.
The Way Forward
I believe the potential of this report for all nations is substantial as we witness a further leveling of the innovation ecosystem playing field globally. This year, we have provided G20 leaders with actionable insights and comparative data that equips them with the tools to make informed decisions that can shape the future of their startup ecosystems. Learnings from this analysis can help us make this report a valuable policymaker tool, driving harmonization and collaboration across national boundaries.
The launch of the APEXE Nations Report at the G20 Social Summit in Rio de Janeiro will mark a pivotal moment in our collective efforts to nurture global entrepreneurship. It represents not just a compilation of data, but a shared vision for a future where innovation knows no borders and where every entrepreneur, regardless of their location, has the opportunity to thrive. Since deep tech and related technologies are driving new levels of caution among security sensitive investors and governments, the US rule of law and venture capital and will continue to attract some of highest potential companies to its shores. A global APEXE report over time hopes to enable all economies to flourish through their innovators by providing more data as to how to enable open and fair environments for such prosperity.
As we embark on this ambitious project, we invite feedback. Your insights, experiences, and collaboration will be crucial in ensuring that the APEXE Nations Report captures the diversity and dynamism of our global startup ecosystem.
In these challenging times, entrepreneurship remains our greatest asset in driving economic growth and addressing global challenges. The APEXE Nations Report will serve as a beacon, guiding us towards a future where innovation flourishes, economies thrive, and the entrepreneurial spirit knows no bounds. Together, we can unlock the full potential of our global startup ecosystem and pave the way for a more prosperous and innovative future for all.
Join GEN and Startup Genome for a webinar on Nov. 26 to hear insights from the APEXE Nations Report and explore how the framework can help advance the entrepreneurial landscape in your country.