Vancouver and Toronto each fall for second consecutive year in global rankings of startup ecosystems

The Swiss-based data-research firm StartupBlink has become a popular source of information about how tech-friendly cities and countries are.

And its recently released global rankings of startup ecosystems do not carry good news for Canada, which fell from third to fourth place.

It was passed by Israel, with the United States in first place and the United Kingdom ranking second.

StartupBlink's 2020 report shows that among cities, Toronto dropped from 15th to 24th place in the world, while Vancouver fell from 25th to 37th. Montreal held its position in 49th place.

It means there's not a single Canadian hub in the top 20 cities.

Vancouver managed a fifth-place ranking, however, among cities with a population between one and three million.

In the 2019 report, Toronto fell four spots, Vancouver went down by six, and Montreal fell by 15.

It means that since the tech-friendly Gregor Robertson was replaced as Vancouver's mayor by Kennedy Stewart, the city has fallen from 19th to 37th place.

San Francisco leads the pack

The StartupBlink rankings are compiled through an algorithm that relies, in part, on "a geographic crowdsourced database of tens of thousands of startups, accelerators, and coworking spaces, among other entities".

"The algorithm is supplemented by data received from integrations with global data partners such as CrunchBase, SEMrush, Meetup, and Coworker, each a global leader in their field," the report states.

This is StartupBlink's third report ranking startup ecosystems.

In 2020, four of the top five cities and eight of the top 20 cities are American, led by San Francisco and New York.

China (Beijing and Shanghai) and India (Bangalore and New Delhi) are the only two other countries with two cities in the top 20.

"To our fellow startup founders, we can only tell you that a crisis provides you with the biggest opportunity to find your unique place in a new reality," StartupBlink CEO Eli David wrote in the report. 

"We run small and flexible businesses, and we can pivot much faster than established companies," he continued. "Each and every one of us should look at how reality has changed and, instead of hoping it will go back to 'normal,' adjust our business model for the new situation."

The report points out that Slack, which originated from a Vancouver-based startup is now headquartered in the United States. This was taken as a reflection of the challenge in keeping Canadian companies from leaving the country. 

The report also notes that Shopify, described as an "e-commerce platformed behemoth", was launched in Ottawa, which isn't considered a national hub for startups.

Ottawa rose from 63rd to 57th, Edmonton moved up from 95th to 91st, and Calgary jumped from 111th to 97th.

The four next-highest ranked Canadian cities were Kitchener Waterloo (120th), Quebec City (139th), Kingston (144th), and Victoria (145th).

On the upside, there are 29 Canadian cities in the top 1,000, which StartupBlink describes as an "impressive achievement".

"Canada has massive potential," the report states. "Considering the substantial interest of the relatively efficient public sector in the growth of the ecosystem, and relative abundance of resources, there is no reason Canadian startup ecosystems should not take an even more substantial role in creating massive global hubs.

"In order for this to happen, there will have to be more Canadian startups making a real dent in the world, and that might only happen by being
less risk averse and adopting the mentality of US entrepreneurs."