For those of you who are new to this ranking, StartupBlink, developed an algorithm which ranks startup ecosystems across the globe and every year it publishes its findings.
This algorithm processes a lot of data to crunch out these rankings. It factors in the quantity and quality of startups, accelerators, and co-working spaces to understand what’s going on.
And right off the bat, we’ll tell you a lot has changed in one year. There’s been some reshuffling among the top contenders from the region.
Intros aside, here are the top 10 countries of Latin America with the most robust ecosystems. And of course, while we’re at it, we’ll also cover their most startup-friendly cities.
Ranked 20th globally
Brazil has jumped 17 places and made the top 20 globally this year.
The sheer size of its market, large number of startups plus the high amount of venture capital (VC) firms in the region give it the first place slot. São Paulo is its biggest startup hub ranked 18th worldwide, followed by Rio de Janeiro (93rd), and then Belo Horizonte (101st).
It’s also hard to overlook the large number of unicorns that have recently emerged—most of which tender to the local population. Given all the startup funding we tend to report on Brazil, we’re not really surprised.
Ranked 34th globally
Chile has fallen four places in the global standings and lost first place in Latin America to Brazil. One of the key programs that gives it a high standing is its Start-Up Chile program that mentors entrepreneurs and provides them with funding. Note that this program is open not only to Chileans, but also foreigners, thus diversifying its startup scene.
Its capital of Santiago continues to be at the epicenter of the country’s startup activity and is ranked 60th worldwide. Although after it the next Chilean cities appear far later on the global ranking: Viña del Mar (453rd) and Valparaiso (594th).
Ranked 38th globally
Like Brazil, Argentina is also climbing the rankings. This year it went up two places and is considered one of the fastest growing ecosystems in the region. Its two biggest setbacks are the size of its population and its bloated government bureaucracy.
As far as how its cities stack up, Buenos Aires is (of course) the place to be and is ranked 46th globally, followed by Córdoba (319th) and then Mendoza (431st).
Ranked 41st globally
This Latam country has its work cut out to rekindle its startup scene.
It’s fallen nine spots in the global ranking this year. While Mexico does have a large population, numerous startups, as well as a few country-based VCs. It also has something other Latam countries lack: direct access to the US market with a trade deal to boot. Not to mention an effective fintech law.
With so many factors to potentially favor its startup ecosystem it’s a real bummer it’s slipping and not living up to its potential
Naturally, Mexico City is its biggest hub and takes the 53rd spot globally. After which come Monterrey (109th) and then Guadalajara (114th).
Ranked 46th globally
Like Mexico, Colombia too has fallen in the ranks having slipped 12 places in comparison to last year. The government’s spat with Uber didn’t paint it in a favorable light either. To recover, investing in public infrastructure to keep attracting foreign talent will be critical.
On a more positive note, its cities of Medellín (ranked 131st) and Cali (ranked 330th) have grown in global rankings. Colombia is best known for last-mile delivery unicorn, Rappi and recent investments in its startups suggest there’s potential in this Latam country to take the regional lead.
Ranked 56th globally
This Latam country climbed one spot in the global standings. However, its only startup hub, Lima, slipped 43 places and stands at 111th worldwide.
Certainly there are government initiatives like Innóvate Perú and Startup Perú to promote its ecosystem. Likewise there’s the Peruvian government’s fund of funds to help in that direction. Efforts like these should continue or increase in order to boost Lima’s standing, not to mention add more of its cities to the global rankings.
Ranked 66th globally
Uruguay has something many Latam countries don’t: relative stability. That has helped it rise five spots in the global rankings. In addition, the government has been supportive of its startups so extra points for that.
However, its small market size and low number of startups don’t bode well. It’s important that public programs be launched to ensure its talent doesn’t go abroad in search of more opportunities. Not to mention attract foreign talent and investors to bet on its ecosystem. The only city to make it into the global rankings is of course Montevideo at 275th place.
Ranked 71st globally
Country-level wise, Ecuador rose six places and there are a few factors that paint it promisingly. For one, its population has a deep entrepreneurial culture wherein 3 out of 10 Ecuadorian adults take up a business.
It also has a growing number of inhabitants from the US working remotely on their businesses. They, if properly courted by the government, can play a crucial role in building its startup ecosystem.
Like Lima and Uruguay, only Ecuador’s capital, Quito, made the city rankings at 272nd place. Note that it dropped 89 places in comparison to 2019 and Guayaquil dropped off the rankings completely. These issues must be addressed in order for it to climb higher in the global and regional standings.
9. Dominican Republic
Ranked 78th globally
This Caribbean and Latam country jumped one spot ahead in the global rankings. However its capital, Santo Domingo, fell 65 places and sits at 353rd. The country’s geographical location favors it to lead within the Caribbean. Like other small countries, significant efforts must be made to stimulate the rise of new startups, as well as attract investors.
Ranked 80th globally
Paraguay had a pretty good year. It rose 16 spots in the global rankings. Like neighboring Uruguay, kudos to this Latam country for its relative stability. That’s where the good news ends.
It needs to strategize and find ways to attract investors and foreign talent. On a similar note, it must also bring other cities into the startup loop as Asunción is the only place that made the global rankings at 455th place.
The government must make efforts to stimulate its startup scene, attract investors, as well as foreign entrepreneurs.
What next for the tech hubs of Latin America?
Clearly, 2020 has been a weird year for everyone.
The coronavirus outbreak has accelerated tech adoption across the world. And I’m not one to doubt that it will surely leave an impact on next year’s rankings. There are also other factors in the air that may affect the rankings for 2021’s edition: pending fintech regulations and the economic slowdown, for starters.
Also note that there tends to be a major difference between the largest startup hub city (often the capital of a Latam country) and surrounding areas. A greater effort is needed to strengthen other hubs as well as create new ones. Otherwise, governments risk creating digital divides within their own country.
So that’s it for this year’s tech hub rankings!
What do you think Latin American ecosystems need to climb the global rankings?
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