How Tech Hubs Create Wealth
In my blog: www.thenobeleconomist.blogspot.no I
went through examples of successful Tech Hubs in different regions: Santiago de
Chile, Dublin, Singapore, Hong Kong, Bangalore, Tel Aviv, Barcelona, Buenos
Aires, London, and the infamous Silicon Valley. A Tech Hub is a place to
Network with likeminded people, which should serve to escalate your business and
have things happen faster. Support from the community will help businesses
thrive, as you meet people with different types of education and skill-sets
from which you can benefit. Tech hubs host people from different areas of the
IT landscape, and encourage them to gather and stay in the city. From
web-designers and digital marketers to developers and angel investors, a growing
company needs to have access to the best talent in all aspects of the sector. A
recognized University in the area could help as well by providing a constant
flow of high skilled labor, as well as access to facilities.
If the conditions are given, Tech Hubs rapidly
create wealth. Consider the case of Dublin. A relatively small city, Dublin
attracts a lot of attention in the Tech World. 4 out of 5 Ireland's top exporters
are technology companies, the sector responsible for 40% of the Nation's total
exports. A Start-Up scene composed of 1200 companies is impressive for a city
of 500.000 inhabitants. Since the Financial Crisis in 2009, Ireland has been an
exporter of talent. Now, with a Euro Zone hovering recession, the Irish are
starting to head back home as economic recovery gains ground[1]. Technological
Development is not the only reason, but clearly the fast growth of it's
technological industry has contributed to job and wealth creation, in a few
years time situation having improved so much that it might not be worth it
TODAY for Irish people to work in other countries.
Wealth distribution, however, is another issue
and depends on the government. Different models can be applied to varied
success. Ireland offers tax-breaks to make it easier for entrepreneurs to
establish their companies. Tax burdens can vary, to different results. The
entrepreneurs must be focused on wealth creation, and leave the distribution of
that wealth in the hands of the government. The government must of course
invest that money wisely and transparently. If the tech industry grows at a
sustained pace and for a long period of time, the city will eventually feel the
impact of development.
Consider the case of Buenos Aires: a city known
for it's artistic design and creativity, the Tech industry counted only 20.000
people in 2003. Making the most of the lower costs of the economic downturn
after the 2001 crisis, the industry started by outsourcing to position itself
as South America's most technological developed city in a period of only over
10 years of time. TODAY, Argentina's Tech field employs more than 80.000 people
in an ecosystem of over 4.000 Tech companies and adds 7.000 jobs each year. It
houses International Tech Giants like HP, Oracle, Cisco Systems, Teletech,
Motorola, Sony, America Online and Google. Once again, good universities, good
talent and a good support group appear as KEY to success. 4 out of 5 Latin-American
Tech Giants are Buenos Aires born.
Technology is not the solution to ALL problems,
but it certainly helps. My VISION of the WORLD, is that in the NeXT 20 years as
natural resources represent a lower % of GDP and Revolution 4.0 takes off, the
cities that produce the most successful TECH ENTREPRENEURS will rapidly take
the lead, at least in developed countries. This does not mean that it will come
easy, or fast. Some regions present tremendously low levels of development,
especially in Africa (4th World), and are still fighting problems that have
been resolved in developed Nations (starvation, famine, diseases). But we can
easily see that countries that are 1st or 2nd World will rapidly benefit from
the changing environment and conditions, by leveraging on their educational
systems to switch as many people as possible to the technology field, and focus
on the efforts of Wealth Creation. I cannot say the same about 3rd or 4th World
countries. The case of Bangalore shows us how Technology is also having a
positive effect in India. However, only 1 million people actually work in the
Tech field in a total population of over 1.2 billion people! Technological
development will have an impact in countries like India as well, but they will
take many decades to catch up. However, their situation will also improve
substantially.
Successful models should be tried to be replicated,
but can be challenging. The Silicon Valley success case has even been tried to
be replicated in the US, to no result. The success of the city will depend on
the people IN the city (locals, but foreigners as well). As cities are getting
smarter, the people IN those cities are getting the benefits of a life of more
comfort. You can imagine that a country that has several Tech savvy cities will
easily accomplish de-centralization and offer ALL it's citizens a much higher
standard of living. After all, that is what the 4th Industrial Revolution
should be about.
Cristian Bøhnsdalen
CMO/CFO and Co-Founder @ITRevolusjonen
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