Friday, April 02, 2010

Berlin or Stockholm?

A lot of cities around the globe would love to become one of the hotbeds of innovation and creativity for the digital world. San Francisco and Silicon Valley have been long established in North America, Bangalore in India has had a strong reputation for the last decade, Shanghai has made huge strides over the last 5 years, now Sao Paulo and Buenos Aires are trying to get some well deserved recognition for digital expertise and innovation.

Good old Europe has been always more fragmented with almost every European capital claiming to be on the forefront of digital brilliance. Realistically there are currently two cities that are thriving for this European lead position: Berlin and Stockholm. It’s less an outright competition than the moderately passionate debate by citizens of both cities over dinner tables and bar stools. Both cities have the advantages of large numbers of educated young people with entrepreneurial drive, Berlin has the advantage of lower living expenses and a significantly larger domestic population, Stockholm had an early start in focusing on digital services and products, and has the advantage of high affinity for anything English and American.

The key hurdle for a true lead position in the digital arena is the emergence of one true global digital company that changes consumer behavior in most countries. It is not a coincidence that Silicon Valley has such dominant role due to the fact that almost any leading digital company has been started there: Yahoo!, Google, Facebook, Twitter, and now we have to count even Apple as part of the digital 800 pound gorilla family. Can Berlin or Stockholm generate a company that is as groundbreaking as these firms or are they going to solely focus on being digital service innovators who work with these large players as their center of universe?

The good thing is that innovation is not a zero sum game. That’s why it’s not Berlin or Stockholm? It’s hopefully Berlin and Stockholm.


Anonymous Anonymous said...

Are you talking about IT? A little unsure what you mean by Digital. In the US, TV is digital! And what do you mean by counting Apple? It is confusing, Mr. Fassnacht.

Michael, your last blog post was fantastic. This one is so so.

You should probably have fewer posts to keep up the standard and make it fun for us to follow you.

5:25 PM  
Anonymous Leo said...

Hey Michael, there was a piece in the FT last weekend on Saul Klein and Index VC that also raises some of the issues around the difference between the US and EU in terms of innovation and capital raising.
I also had an interesting chat with one of O'Reilly's staff here in the UK about this issue and he raised the point that in order to get critical mass OpenSource is what EU startups do instead of VC. Anecdotally it feels to me like Australia was in the same boat as EU. I'd love to create a map of where OpenSource VS funded projects occur and the prevalence of capital in those markets. #IfIonlyhadthetime

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