Luxembourg’s startup ecosystem showed a dramatic improvement in the 2023 Global Startup Ecosystem Index bounding up the rankings.
Luxembourg rose six places to reach 34 in the global top 40 nations. Within the EU, it climbed three rungs to rank 16th, overtaking Czechia, Bulgaria and Romania. And within Western Europe, Luxembourg City raced up 18 places to become the 30th-best startup city in Western Europe and 14 places to be ranked 24th best city in the EU, overtaking Budapest, Oulu and The Hague, and 124th city globally.
“Luxembourg’s startup ecosystem has a bright future. With its multilingual talent, robust economy, and cutting-edge digital infrastructure,” the report said, adding that its small size limits its potential to top the ranking as a regional hub. “Therefore, the success of the startup ecosystem hinges on creative government initiatives to make the ecosystem more global.”
Developed by the research centre and startup map StartupBlink, the report aims to guide founders on where best to establish a startup. “When successful founders share details about their moments of breakthrough, we find many startups were born from chance encounters, unexpected connections, or insights that arrived from a random conversation,” StartupBlink CEO Eli David said, adding: “Those moments tend to happen in thriving startup ecosystems, with a concentration of high quality startup stakeholders and a general mindset of cooperative innovation.”
Here are some of the key takeaways:
Score Gap Between Global Leaders Shrinking
The US retains the global top spot, ahead of the UK and Israel. And though the score gap between first and second place is shrinking, StartupBlink placed the US four 4 times better than the UK. The score gap between UK and Israel shrank from 16.6% in 2022 to 10% in 2023, a result credited to the implications of Brexit on the UK’s ability to attract foreign talent. “The global top 3 countries maintain a significant gap from the countries ranked below them, and are unlikely to be challenged in the rankings any time soon,” the report said.
When ranked by Absolute Ecosystem Power (i.e. not adjusting its total startup output to its population size), China maintained the second position globally, above the UK, India, and Germany. Finland follows China in the 13th spot, climbing one place compared to last year and overtaking Estonia that is now ranked 14th. Similarly, Spain replaced Ireland at 15th.
Iceland’s Momentum
Europe had 410 startup economies listed in the global top 1,000, down from 426 in 2022. Iceland experienced the strongest momentum, climbing 9 rungs since 2022, to 32nd place. Liechtenstein climbed 5 places to be ranked 63rd. Slovakia and Belarus descended the rankings, and currently rank at 65th and 18th, respectively. Sweden, France, Germany, and the Netherlands complete the top five places along with the UK, marking no change since 2022. The top-ranked European cities were: London, Paris, Berlin, Stockholm and Amsterdam.
Smaller Piece Of The Pie
StartupBlink 2022 funding analysis of early and late-stage investments to startups found that while 41% of the 1,000 top startup ecosystems were found in Europe, the continent only received 19.7% of startup funding. This was, however, an improvement on 2022, when the continent’s startups received 18.3% of funding.
Startups in North America, which has 30% of the global top 1,000 cities, received exactly half of all funding. A quarter of global startup funding went to startups in Asia Pacific, which has 15.9% of top-ranked startup ecosystems.
further substantiating the earlier statement about Europe having good startup activity but lagging behind other regions in producing high-impact startup economies. The report suggested that the continent had good startup activity but lagged behind other regions in producing high-impact startup economies.
Two other regions underperform when it comes to investments: the Latin America & the Caribbean region (with 7.7% of cities in the top 1,000 and only 2.2% of startup funding) and the Middle East & Africa (with 6.3% of cities in the top 1,000 and 3.7% of startup funding).
