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  • Nesta and European Digital Forum’s second city ranking sees London score top again for startups and scale-ups
  • Nine UK cities feature in European ranking including Bristol, Cardiff and Edinburgh
  • Policy guide helps policymakers map improvements to attract digital business

London remains the best city in Europe for digital entrepreneurs because of its access to capital, vibrant entrepreneurial culture and access to a skilled workforce according to the European Digital City Index. Launched today at the Startup Nations Summit and available at www.digitalcityindex.eu, the ranking of 60 European cities features nine in the UK.

The second Index compiled by innovation foundation Nesta and the European Digital Forum, includes 28 EU capital cities and 32 digital innovation hubs ranked according to what entrepreneurs said was important to them. The 40 separate measures span ten core themes, including mentoring and managerial assistance, business environment and digital infrastructure with varying weightings for startup and scale-up businesses. Nesta has also published an accompanying policy booklet which details what policymakers should do to encourage digital startups and scale-ups according to the themes measured in the ranking.

Nine UK cities feature in the ranking, with six scoring in the top 20. Based on its access to mentoring networks, knowledge spillovers from the nearby University and market conditions, Cambridge is ranked in 12th place for startups, just ahead of Bristol (13), Oxford (15) and Manchester (16). Other UK cities featured are Edinburgh (19), Birmingham (23), Glasgow (36) and Cardiff (40).

The ranking also reveals an east, west continental divide: Eastern European cities do not feature at all in the top ten despite large sums of investment by those governments in digital infrastructure.1 Of the dozen Eastern European cities included in the Index, Tallinn was deemed the most attractive in 18th place, followed by Budapest (33) and Prague (37). This is in spite of a significant number of digital businesses being based there such as mobile TV projector app Flipps (Sofia), Skype (Tallinn) and cloud-based presentation platform Prezi.com (Budapest).

Visitors to www.digitalcityindex.eu can customise the Index by attributing more or less weighting to the factors they consider important to their business needs to establish the best city for them.

Top 10 European Cities for Digital Startups and Scale-ups

Ranking

Startups

Scale-ups

1

London

London

2

Stockholm

Stockholm

3

Amsterdam

Paris

4

Helsinki

Helsinki

5

Paris

Amsterdam

6

Berlin

Copenhagen

7

Copenhagen

Berlin

8

Dublin

Munich

9

Barcelona

Dublin

10

Vienna

Vienna

Chris Haley, head of startup and new technology research at Nesta, comments: "London remains the most attractive European city for digital entrepreneurs in 2016, but Stockholm is snapping at its heels. Government must continue to invest in digital skills and digital infrastructure, as well as addressing the cost of office space, if it is to continue to attract the next Deliveroo or FundingCircle, with many competitor cities in Europe, China and the US working hard to attract young firms. Of course, it also remains to be seen how a ‘hard Brexit’ will impact on the UK’s business allure for digital startups, given that access to markets is also hugely important.”

Rajesh Agrawal, Deputy Mayor of London for Business, said: “This is yet more evidence that London is open for business. It is fantastic news, but no surprise, that London remains the highest ranked city in Europe for digital startups. When you consider our vibrant entrepreneurial spirit, huge talent base and access to capital it is clear that London is the number one place to start and grow a tech business. 

“As a fintech entrepreneur myself, I know that there is nowhere better to do business. London is open to all manner of technological innovation and has the perfect time zone to trade with all four corners of the world. I am sure that this crucial part of our economy will only go from strength to strength in the coming years.”

Nesta and the EDF published the first European Digital City Index in 2015 when it included 35 capital cities and known innovation hubs. In addition to featuring 25 new cities, the measures in the Index have been updated in 2016 to include the availability of business angels funding and crowdfunding, entrepreneurial education and training, and a culture and recreation popularity scores. Nesta also sourced bespoke data sets from Crowdsurfer, Ookla, Statista and FollowtheHashtag.

The 2016 European Digital City Index is published after the European Union launched a venture capital fund of 400 million euros to help regional startups grow and address a capital shortage in Europe for such firms compared with the United States.

The Startup Nations Summit is a gathering of policymakers, advisors and entrepreneurship experts from more than 75 countries. The annual event will this year be held in Cork, Ireland on November 18-20.

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Footnotes:

  1. Broadband Coverage in Europe 2014: Mapping progress towards the coverage objectives of the Digital Agenda

About Nesta: (www.nesta.org.uk) is the UK's innovation foundation. We help people and organisations bring great ideas to life. We do this by providing investments and grants and mobilising research, networks and skills. We are an independent charity and our work is enabled by an endowment from the National Lottery. Nesta is a registered charity in England and Wales 1144091 and Scotland SC042833

About the European Digital Forum: The European Digital (www.europeandigitalforum.eu)  is a think tank dedicated to empowering tech entrepreneurs and growing Europe’s digital economy. It is led by the Lisbon Council, Open Evidence and Nesta, in collaboration with the European Commission’s Startup Europe initiative. It was inspired by the Leaders Club, an independent group of founders in the field of tech entrepreneurship, and first called for in the Startup Manifesto for entrepreneurial excellence. The European Digital Forum has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 645099.

For all media enquiries please contact Laura Scruby in Nesta’s press office: [email protected] / 0207 438 2697