The Australian tech sector has experienced record-breaking growth in the last three years, attracting substantial investments, including in companies like Canva, Airwallex, and ROKT. Australian tech businesses have become desirable acquisition targets for established overseas players, further boosting the ecosystem's momentum. The country’s superannuation structures also contribute to its rich investment ecosystem and the impressive number of overseas companies looking to list on the ASX stock exchange. With economic growth expected to continue on its current trajectory, both inbound and outbound tech investment is expected to thrive well into the future.
Investors
Australia has positioned itself as a leading digital economy by embracing emerging technologies at an early stage of development. The country’s rapid digital transformation led to the tech sector becoming the fastest-growing area for skilled development. In the fiscal year 2020-21, the technology sector contributed $167 billion to the Australian economy, overtaking the likes of mining and banking. Australia's focus on renewable energy, high-quality education and research facilities, and a thriving start-up sector are among the factors driving innovation. While the Australian tech ecosystem is known for hosting successful international corporations, the local start-up scene is also a significant driver of innovation.
The technology ecosystem
The Australian Government's billion-dollar Digital Economy Strategy aims to make Australia a global top ten digital economy by 2030. The strategy focuses on digital infrastructure, cybersecurity, skills in emerging technologies, and identifying key digital growth areas and businesses. The government recognises critical technologies' impact on economic prosperity, national security, and social cohesion. It has outlined support for such technologies and created a list of specific fields, including quantum technologies, autonomous systems and robotics, artificial intelligence, and advanced manufacturing. The government aims to leverage the benefits of critical technologies while managing the associated risks, such as cybersecurity and supply chain disruptions. The government has allocated significant investments toward a Critical Technologies Challenge Program and the Australian Centre for Quantum Growth to support the growth of these technologies.
Government support
The Australian technology industry is experiencing significant growth and plays a crucial role in the country's economic prosperity. With a joint goal of reaching 1.2 million people in tech jobs by 2030, the Australian Government and the Tech Council of Australia are actively promoting growth within the sector. The sector's expansion reflects a long-term shift towards greater technology transformation across industries, emphasising the need for skilled tech professionals. Many Australians are early adopters, one of several key factors that support the country's vibrant start-up ecosystem.
The technology landscape in Australia
Canada
United States
Indonesia
Malaysia
Japan
India
Germany
Israel
Ireland
Netherlands
France
Tanzania
South Africa
Australia
The South African Technology development fund supports the development of technologies from proof of concept over product prototyping to real-life demonstration and implementation. Further support comes in many forms, including financial assistance, tax incentives, and access to resources such as mentorship, training, and networking opportunities. There are also several startup development programs being implemented by government agencies. One example is the National Youth Development Agency grant, which allows young entrepreneurs to access financial and non-financial support for their early-stage businesses.
Government support
The technology ecosystem
The South African Startup Ecosystem Report 2022 found that at least 490 tech startups were in operation across South Africa as of May 2022, employing over 11,000 people. Fintech is the most populated sector, with almost one-third of the country’s tech startups active in that vertical. It is also among the region's leaders in the technological development of mobile software, IT security services, and software. The country is home to a rich network of successful accelerators and incubators. Over 25 per cent of South African tech startups have undergone some form of acceleration or incubation.
Investors
Although South African tech startups saw a decline in investment in 2022, it was still a landmark year, with over 600 African tech startups raising a combined $3.3 billion throughout 2022, a YoY jump of 55.1%. Technology infrastructure is a driver of investments, with the likes of Google, Amazon, Microsoft, and Oracle planning to build or expand data centres in the country. 2023 could be a challenging year, but 87% of South African tech startups remain optimistic about growth and investment despite economic challenges.
South Africa is home to a growing and ever-developing technology industry. The country has one of Africa's most extensive information and communications technology (ICT) markets. It shows technological leadership in areas such as mobile software, security software, and electronic banking services. As an increasingly important contributor to South Africa’s GDP, the country’s ICT and electronics sector is gaining sophistication and developing rapidly. South Africa is also the leader in smart city technology in Africa. South African cities recognise that the benefits of smart cities are wide-ranging, affecting a broad spectrum of industries and making life easier for residents in many ways.
The technology landscape in South Africa
US-based or listed companies can leverage competitive corporate tax structures and favourable valuations. Entering the U.S. market requires navigating intricate laws, financial systems and processes that can vary on a state level. One example is the evolving data privacy regulatory landscape, which requires informed counsel and advice to navigate. The same applies to accessing U.S. schemes and grants that support the technology industry. Recent efforts include the Chips Act, a $280 billion funding initiative for chip research and manufacturing. Similar benefits and tax incentives apply to other sub-industries, such as cleantech, where a significant portion of the $369 billion U.S. Climate Act is allocated for technology development and production.
Government support
The technology ecosystem
Distinct technology hotspots with unique specialities and strengths dot the U.S. map. Boston shines in healthtech, New York fintech, and Silicon Valley as the birthplace of global tech industry titans and emerging technologies. A key strength of the U.S. tech scene is the symbiosis between world-class academic institutions, enterprising entrepreneurs, and the investment ecosystem. This synergy leads to the U.S. consistently cultivating more high-value start-up unicorns than any other country. The continued ascent of generative AI companies like OpenAI is grabbing many headlines. However, many other sectors, including cybersecurity, IoT, AR/VR, healthtech, and edutech, also perform strongly, attesting to a vibrant tech ecosystem.
Investors
A slowdown in overall deal numbers should not overshadow that venture capital and private equity firms sit on massive dry powder stores and continue to show great interest in U.S. deals. Companies that succeed in securing investors can acquire substantial growth capital. Effectively conveying a strong value proposition and ROI projections are essential to ensure investment. Both investors and companies are adapting to new business realities. Investors may need to recalibrate some investment models, especially in the context of leveraged deals, which have become pricier. For companies, careful planning and preparing the business for a sale or investment have taken on added importance. Such steps can bridge existing valuation gaps between buyers and sellers. Thorough deal preparation can also be advantageous to both parties regarding post-acquisition and post-merger integrations. Concrete integration plans and strong performance during a merger are effective ways to mitigate M&A risks and enhance overall performance.
The U.S. technology ecosystem has long been recognized as the global leader. Its indigenous enterprises power the American economy and influence the global financial landscape. America continues to draw in tech organizations looking to scale up, foster new start-ups, and create groundbreaking innovations. Continued macroeconomic disruptions influence the tech industry, leading to unavoidable corrections, including layoffs and falling valuations. Emphasis on profitability and sturdy business operations symbolize that efficiency and sustainability are prioritized over prior years' pursuit of exponential growth. However, it is more of a recalibration than a systemic issue, and the demand for technology services and digital transformation remains robust.
The technology landscape in The United States
Major incentives for technology companies looked to expand to Canada include the Scientific Research and Experimental Development (SR&ED) program. Canada's SR&ED program provides credits and additional tax incentives, some of which may provide cash value when a company is not taxable. The incentives are available to both Canadian-owned and foreign-owned companies. Canada has cultivated a robust ecosystem of partners and suppliers through a range of incentives, investments, immigration policies, and efforts to attract large foreign-owned technology corporations to Canada. This commitment has helped establish a strong foundation for an increased technology presence in Canada, ensuring ample resources for emerging companies to thrive. Companies can navigate through the necessary steps to expand to Canada in a painless manner by seeking reliable professional advice.
Government support
The technology ecosystem
Canada offers a rich pool of skilled professionals from its existing technology sector and excellent universities. The country's immigration system facilitates the entry of technology-oriented employees, streamlining visa processes. A number of Canadian markets are listed in various publications as part of the top technology markets in North America from a talent and company perspective. Sub-sectors include AI, gaming and esports, Augmented Reality (AR)/Virtual Reality (VR), digital media, IT, software, telecommunications and fintech.
Investors
Capital and investment opportunities continue to be abundant in Canada, with an increasing appetite for technology investments. Investments from foreign jurisdictions, especially from the United States, continue to increase, with private equity firms actively seeking opportunities in the technology sector. There is a good investment community focused on the technology sector including angel investors at the start up stage, venture capital as they start to scale, and private equity as they mature and grow. Canada offers specific advantages from a Tax and Audit perspective. Statutory audits are not required. The country also boasts one of the lowest corporate tax rates among international business destinations. Accounting Standards for Private Enterprises can be used in Canada for private companies, and IFRS and US GAAP can be used as well for entities.
Expanding your emerging and scaling technology company to Canada comes with many advantages that make it an attractive proposition for businesses. The country offers a highly business-friendly environment. The country’s innovative technology industry includes significant mature businesses in hubs including Toronto, Montreal, Vancouver, and Ottawa, and a vibrant start-up scene. Canada has a strong ecosystem of universities and research institutions. This focus on technology education contributes to the sector’s performance. Data from Statista shows that Canada’s Information and Communications Technology (ICT) sector generated revenues worth $242 billion CAD in 2021.
The technology landscape in Canada
Brazil offers state-supported tax incentives for technology companies, which can demonstrate a commitment to investing in R&D and technological innovation that will benefit the region. The ‘Law of Good’, introduced by the Federal Government, includes a possible 50% tax reduction on Industrialised Products (IPI) and up to 34% reduction in income tax for payments incurred in connection with R&D. In reporting terms, Brazil follows International Financial Reporting Standards (IFRS) as adopted by the International Federation of Accountants (IFA), with a few minor exceptions. This facilitates smooth market entry for foreign companies looking to consolidate Brazilian operations.
Government support
The technology ecosystem
Fintech is a leading sub-sector in the Brazilian tech space. David Velez's neobank, NuBank, provides an excellent example of the growth potential. It has become the world's largest digital bank in the ten years since its foundation, with over 80 million customers in Brazil, Mexico and Colombia. Other notable sub-industries and trends include the increased interest and investment in agritech. Internet of Things, cloud computing, and business process outsourcing are also performing particularly well. Brazil’s technology ecosystem has seen increasing unicorn numbers ($1 billion+ valuation in the private market). Simultaneously, several major players have IPO’d on the New York Stock Exchange.
Investors
Rather than focusing on mature businesses in traditional, stable sectors such as manufacturing, local investment bankers continue to show significant interest in technology companies and disruptive start-ups. US and European investment firms have historically been the major players, but there is increased activity from Asian entities. Interest tends to focus on fintech and smaller businesses. A small but significant group of international companies also invest in Brazilian fintech and hardware. Another significant source of investment is private equity (PE) funds and family offices investing in start-ups and small, growing businesses. Fintech entities in digital payment, such as Stone and PagSeguro, have achieved high IPOs in recent years on the back of PE funding.
Brazil continues to be a hotspot for growth opportunities and Latin American expansion. The country's size and population’s openness to technology provide a perfect platform for businesses to expand their tech offerings. Brazil has the world’s fifth-biggest consumer landscape for mobile phone usage. Brazilians are also frequent international travellers, exposing consumers and investors to emerging technologies they cannot yet access back home. 5G technology implementation opens the further potential for technology companies and investors, extending data reach, increasing the need for data protection, and growing market opportunities for technology businesses.
The technology landscape in Brazil
The Tanzanian government recognizes the crucial role of technology in driving economic growth and has actively supported the development of the technology sector. The National ICT Policy and the National ICT Broadband Backbone (NICTBB) project are some of the initiatives aimed at promoting ICT infrastructure and digital literacy across the country. Through the Tanzania Communications Regulatory Authority (TCRA) and other bodies, the government has implemented policies and regulations that encourage innovation and safeguard consumer interests. It also actively collaborates with private stakeholders to promote digital innovation and technological advancements.
Government support
The technology ecosystem
Tanzania boasts a blossoming technology ecosystem that nurtures innovation and entrepreneurship. The country is home to various tech hubs, co-working spaces, and incubators that foster collaboration and networking among tech enthusiasts and professionals. These hubs provide support, mentorship, and resources to startups and aspiring entrepreneurs, creating a conducive environment for technological innovation. The local developer community in Tanzania is thriving, organizing numerous tech-focused events, hackathons, and workshops. This community-driven approach to learning and skill development has contributed to the growth of the technology sector.
Investors
Tanzania has attracted significant interest from both local and international investors in the technology space. Startups and technology companies in the fintech, agritech, health tech, and e-commerce sectors have garnered substantial investment, propelling their growth and expansion. The influx of investors has further strengthened the technology ecosystem, creating a positive feedback loop for further growth and innovation. In conclusion, Tanzania's technology landscape is experiencing a rapid evolution, driven by increased connectivity, a supportive ecosystem, government initiatives, and the influx of investors. As the nation continues to harness the power of technology, it is poised for further development and prosperity in the digital age.
Tanzania has experienced a rapid increase in mobile phone usage and internet penetration, particularly in urban centers. This surge in connectivity has opened opportunities for various digital services, such as mobile banking, e-commerce, and online platforms. As a result, more Tanzanians are gaining access to the digital world, leading to increased efficiency and convenience in their daily lives. The government and private sector have invested in expanding the country's digital infrastructure. Efforts have been made to improve internet connectivity in rural areas, promoting digital inclusion and bridging the digital divide. The introduction of 4G and the groundwork for 5G technologies have further accelerated the nation's digital progress.
The technology landscape in Tanzania
Offering free assistance, the Netherland Foreign Investment Agency (NFIA) helps businesses through every growth stage. It also connects companies with commercial service providers, tax authorities, regional investment agencies, and more. Dutch regional innovation funds, like the Brabantse Ontwikkelings Maatschappij (BOM), also help nurture tech innovation and companies through knowledge sharing and venture capital. The country's cooperative tax administration and investment-friendly system encourage business growth, featuring nearly 100 bilateral tax treaties to prevent double taxation. Specific R&D tax incentives foster innovation throughout a business's lifecycle, with the WBSO tax credit reducing wage costs and investments.
Government support
The technology ecosystem
Amsterdam is the epicentre of the Dutch technology scene. A mix of local companies and international powerhouses comprise its $22 billion tech ecosystem. The city is a hotspot for unicorns like Just Eat Takeaway, Gitlab, and Elastic. Other technology centres include Intelligent Community Forum world's smartest region winner, Eindhoven, home to semiconductor giants ASML and NXP. Rotterdam excels in life sciences, cybersecurity, and telecoms, while Wageningen is a food and agrotechnology innovation hub. Affordable living costs, a favourable ex-pat tax program, and high quality of life contribute to the Dutch technology sector attracting foreign talent. In total, the industry employs over 69,000 people across 1,600 companies.
Investors
The Netherlands' thriving tech ecosystem draws substantial foreign investment, accounting for 8% of all Foreign Direct Investment (FDI) into the European Union. Over 400 active national and international venture capital and private equity funds invested over €2.6 billion in Dutch start-ups in 2022. Notable sectors include software, technology, healthcare, fintech, agritech, and logistics. The Netherlands also boasts a significant pension fund market, ranking second in the EU, with €1,935 billion reported in 2021. Dutch insurance companies also contribute to the investment ecosystem, reinvesting approximately 40% of their capacity into the country. These investments contribute to a robust financial environment for companies at all growth stages in the Netherlands.
Despite its small size, the Netherlands is a bustling hub for start-ups and scale-ups. The country offers excellent access to European consumer markets, supported by robust government support and ample capital. Companies can benefit from an attractive business environment bolstered by a mature financial sector, wide-spread English proficiency, advantageous tax efficiency, and top-tier academic institutions. The country is ranked as Forbes' fourth-best country for business and boasts an advanced digital business infrastructure. Despite its compact size, the Netherlands is among the world's premier economies, leading in European developer capital and ranking fourth in global innovation.
The technology landscape in The Netherlands
France has many public and private initiatives for technology businesses. Support programs focused on solidifying France's place as a scale-up nation include public spending through Bpifrance, the French national investment bank, to strengthen start-up financing. France also has a popular R&D tax credit that helps entrepreneurs innovate and create new products. It also attracts research investment from international enterprises to set up labs in France. Continuing reforms aimed at eliminating wealth tax outside of property, a flat tax on dividends, expanding schemes for foreign businesses with employees based in France or special tech visas for non-EU start-ups are other support initiatives.
Government support
The technology ecosystem
In this global marketplace, French innovation carries a distinct signature: The French touch. "La French Tech” (start-ups) and “French Healthcare” (biotech, MedTech, digital health) are widely recognised stamps of quality. Other strong sub-sectors include internet services, software and fintech. The three sectors have raised €2.98 billion, €2.94 billion, and €2.34 billion, respectively. Healthy competition exists between various chambers of commerce, cities, departments, and regions – each looking for recognition as the "hub" of a particular technology sub-industry. Biotech and MedTech are strong in the east of France. Lyon, Toulouse, Bordeaux, Nantes and Lille are other hotspots. Of course, Paris remains a natural centre for technology businesses, start-ups, scientists, entrepreneurs, and incubators.
Investors
France has proven its ambition to produce tech companies that scale and build global brands. In 2022, France attracted a record number of foreign investments, with 1,725 projects. The United States, Germany, the UK, Belgium, the Netherlands, and Italy are the highest contributors. Venture capital (VC) deal activity in France remains high, and Paris continues to defend its position as a top VC hub in terms of deal value. Private equity (PE) activity in France is also vibrant. For example, Q1 2023 saw 309 PE deals worth €25.3 billion. France accounted for two of the three Europen megadeals and saw a surge in €25-€100 million deals. In total, 44 technology M&A deals were announced in Q1 2023, worth a total value of €4.5 billion.
Technology has been a priority for years in France, and it is paying off. It's well-oiled market, stable economy, impressive infrastructure, governmental support, and talent pool offer attractive opportunities for businesses and investors. In 2022, €13.5 billion was raised for 735 operations, an increase of 17%. The French technology industry welcomed a further eight unicorns in 2022. One of the country's strengths is its vast engineering talent pool that excels at combining theory, practical skills, and a pragmatic approach. Their multi-capacity professional profiles are rare – and top talent comes at a price lower than the likes of Silicon Valley.
The technology landscape in France
German national and state authorities actively promote tech innovation, including supporting the development of ideas generated in universities into marketable products. Idea clusters created through joint efforts of several specialist university faculties attract extensive investment. There are both national and local levels of support for these clusters and federal initiatives. One aspect that might surprise international businesses is a higher mix of state funds available in earlier rather than later funding stages, which is less common in other countries.
Government support
The technology ecosystem
Germany has leading businesses in many sectors, providing fertile ground for tech innovation. SAP (the third largest software company by revenues globally) and companies like BMW, Siemens, Volkswagen, and Deutsche Telekom are complemented by successful start-ups and scale-ups, including over 30 unicorns. The German government has created a network of twelve digital hubs to foster innovation in multiple sectors, including logistics, FinTech, AI, healthtech, and cybersecurity. There are over 90 more clusters around the country, supported by states or cities, creating a vast network of collaborative tech hubs. Competition for German talent is fierce, but the quality of life, excellent economy, and prevalence of English encourage significant inflows of talent.
Investors
2022 was characterized by significant macroeconomic challenges for the VC market as it grappled with the impact of Russia's attack on Ukraine. Investors became more cautious and selective regarding VC/growth investments, with a noticeable preference for well-established start-ups instead of early-stage ventures. In 2022, the VC market saw €5.9 billion of funds invested, compared to 2021’s €8.5 billion peak. The top 100 German start-ups recorded accumulated funding of US$27.6 billion. While the number of new funding rounds roughly matched 2021 levels, the average funding round size decreased notably. Funding continued to focus on FinTech (28%), Software & Analytics (23%), Mobility (19%), and E-Commerce (11%). The funding environment for start-ups/scale-ups has continued to be challenging in 2023, with some start-ups filing for insolvency. On a positive note, this opens up opportunities to acquire exciting technology.
Germany is the fourth-largest economy in the world and home to 83 million consumers with high disposable income. With a well-developed economy and a significant export market – the third largest in the world – the country offers a lot to tech companies. An additional bonus is a highly developed manufacturing sector (its 18% gross value added is more than twice that of the UK or France). Over €112 billion invested in R&D annually puts Germany fourth behind the US, China and Japan, cementing its reputation for innovation. With six cities in the top 25 on the Global Mercer Quality of Living Survey, tech talent can also enjoy a great lifestyle beyond work.
The technology landscape in Germany
From a fiscal policy perspective, the Indian landscape is relatively stable. An aligned political landscape helps to welcome large multinationals and smaller businesses from overseas. The business tax rate is now close to 22% for companies in India – down from a one-time 40% - which, combined with an income tax of 20%, makes the country a relatively tax-friendly location. Special "economic zones" have also been created to reduce the cost of operation. Since 2015, smaller businesses have had support from the government’s Startup India initiative, which provides access to tax benefits, easier compliance and IPR fast-tracking.
Government support
The technology ecosystem
HP, Cisco, Microsoft, SAP and many others have a strong presence in the Indian market. The scope is incredible, particularly for IT and the service technology sector. India is the third-largest and fastest-growing hub for technology startups. In 2022, over 1300 startups were founded. 23 Indian companies achieved unicorn status in 2022, the second-highest figure in the world. Fast-rising Bangalore, Mumbai and New Delhi are increasingly recognised among the world’s top technology ecosystems. It is said that if you walk down the streets of the Koramangala neighbourhood in Bangalore, there are three things there’s an abundance of – bars, engineers and entrepreneurs. The vibrant startup ecosystem is supported by one of the world's most numerous and talented workforces. Over four million graduates join its predominantly English-speaking workforce every year.
Investors
Bullishness about India is in the air. Noted columnist Noah Smith wrote in a recent post, “India has arrived on the world stage, in a big way.” Smith is hardly alone in pointing out the monumental shift. From Apple CEO Tim Cook to global investment banks like Nomura, there is substantial enthusiasm about India and its economy. A transformed market with untapped potential, the country appeals to investors because of its growing consumer power, youthful and skilled workforce, and low operation costs. It is projected to have the world’s largest talent surplus by 2030. With an approachable investment climate, clarity on foreign direct investment policies, and a focus on establishing infrastructure, India has much to offer potential investors.
Far more than a back-office support hub, India has made incredible strides in technology and the digital economy. The country’s digital transformation (DX) adoption landscape keeps evolving rapidly, with DX spending projected to reach US$23.6 billion in 2025 at a CAGR of 17 per cent. By then, India is expected to be among the world’s largest consumer markets. A large, continually growing consumer base enjoys ever-increasing purchasing power. An extensive middle-income group with a significant migration to urbanisation contributes to an inviting market for technology companies. It's relatively low operating costs increase India's attractiveness, which helps attract many international technology companies.
The technology landscape in India
The Irish government offers investment and support for STEM education and staff relocation. Several government bodies, including the IDA, Enterprise Ireland, and the sovereign wealth fund ISIF back the vibrant tech ecosystem. These organisations have seeded most of Ireland's venture capital and growth capital funds over the last 25 years. Ireland’s corporate tax rates, solid R&D tax credit and tax depreciation for the IP acquisition add to the country’s attractiveness. So too does the Knowledge Development Box scheme, which can reduce the tax rate to 6.25% on some IP exploitation. Navigating businesses is relatively straightforward, but companies coming into the market should be aware of Ireland’s account audit and filing requirements.
Government support
The technology ecosystem
Over the last 20 years, the Irish tech industry has witnessed an explosion of start-ups and scale-ups. Almost all the world’s largest tech companies, including Google, Apple, Facebook, Twitter, and Amazon, have chosen Ireland as a base for their European and American connections. Dublin attracts the bulk of tech activity, but tech clusters have formed across Ireland, offering cost savings on rent and salaries and a more attractive work/life balance. Cork’s tech businesses tend to focus on cybersecurity. In Galway, MedTech reigns, while there are growing clusters of e-payment and fintech companies in Dundalk and Drogheda. Ireland’s position at the doorstep of Europe offers access to 250 million people. Despite its relatively small population, the country’s connections have drawn in tech talent, although significant competition for skilled employees remains.
Investors
Despite its relatively diminutive size, Ireland commands impressive interest from international capital. With incubators, start-up funds, R&D support and more, angel investor groups can easily find well-supported tech innovators. Aside from the US, the UK is a potent funding source; European investors primarily come from France, Germany, the Netherlands and Scandinavia. Ireland’s attractive corporate tax rate brings in significant investor interest. So does the uniquely collaborative connections and community within the foreign direct investment. For example, global funds often work in tandem with local investors to support early-stage investment, which supports the growing tech scene and widens the international institutional investor base.
‘Geographically, we are closer to Berlin than Boston. Spiritually, we are probably a lot closer to Boston than Berlin.’
This quote from former Minister for Enterprise and Employment, Tánaiste Mary Harney, epitomises a key driver for Ireland’s Foreign Direct Investment (FDI) policy. Today, Ireland is considered a solid location for international businesses to establish themselves. Its attractiveness is bolstered by a global familiarity with and affection for Irish culture, the country's English-speaking Eurozone position, and common law jurisdiction. With Irish and European universities providing talent, relative ease of doing business, and well-established precedents of major tech businesses, Ireland attracts plenty of foreign direct investment.
The technology landscape in Ireland
The Israeli government has supported the technology sector for decades, focusing on establishing and solidifying the necessary infrastructure. As a testament to this commitment, Israel ranks first among OECD countries in R&D expenditure relative to GDP. In addition to tax incentives, the government operates tech incubators and acceleration programs to stimulate local tech companies. In 2022, the Israel Innovation Authority allocated approximately US$410 million to local firms. The results are palpable. Governmental incentives, technology hubs, accelerators, a highly educated workforce and an entrepreneurial spirit all contribute to making Israel home to 9,200 technology firms and about 450 incubators and accelerators.
Government support
The technology ecosystem
The Israeli technology ecosystem includes global companies, start-ups across growth stages, and midmarket companies. Cyber, agritech, and foodtech are among the highest-performing sectors. In 2022 alone, roughly 400 new tech companies and start-ups were formed, most founded by local, often young, entrepreneurs. About 20% of Israelis under 34 work in tech roles, and computer science is the most popular major. Israel is a hub and R&D centre for many global companies, including giants like Google, Microsoft, Meta, SAP, and Intel. One standout feature of the Israeli ecosystem is its mutual support. Collaboration between established companies and fledgling start-ups is a common sight. BDO Israel plays an active part in the ecosystem, supporting local firms and entrepreneurs and bridging the gap between entrepreneurs and investors.
Investors
2022 posed challenges to the global technology industry. Still, Israeli high-tech companies and start-ups received US$15.4 billion in investments. Since the start of 2023, there have been 111 exits worth US$1.7 billion. While this marks a decline from the preceding years, it's a clear sign of the prevailing optimism and positive sentiment in the market. Israel continues to draw interest from oversea investors led by VCs. The uncertain macroeconomic environment has increased focus on preparing companies for due diligence, investment and M&A processes to create optimal outcomes.
Despite its mere 22 thousand square kilometres – slightly less than New Jersey - and 9.5 million residents, Israel is a technology industry powerhouse. The tiny nation is among the world's leaders in creating and producing cutting-edge technological solutions. Israel's technology industry has grown over the past decades, transforming the country into the globally recognized 'Start-Up Nation.' Technology contributed around 54% of Israel's exports in 2022 and employs roughly 10% of the population. The industry's heartland is a dense concentration of start-ups and high-tech firms in and around Tel Aviv. However, prolific tech hubs are found from Jerusalem to Haifa and Herzliya - and even in the Negev Desert.
The technology landscape in Israel
The Japanese government provides grants to help small and medium-sized companies, both domestic and international. The country encourages inbound investments and is keen to attract foreign investors and workers. Japan focuses on incentivising new businesses to stay in the country long-term. Some time, patience, and consultant support will likely be necessary to reap the optimal benefits of a supportive business environment and a very deep Japanese home market. Making good use of the country’s generous grant systems and working with Japanese customers, banks, investors, and service providers requires a keen understanding of its business culture and norms.
Government support
The technology ecosystem
Technology R&D in Japan is strong across sectors, including semiconductors, software, content, robotics, AI technology, cybersecurity, fintech and cryptocurrency. Incumbents like Sony, Toyota, and Hitachi have large R&D operations. Japan is home to many other, less internationally well-known companies that contribute to the country's innovation and IP power. The start-up ecosystem is smaller and less mature than the likes of the US. However, younger generations have proven more open to working for start-up companies, spurring start-up ecosystem growth. Japan also has strong synergies and close ties between established companies and entrepreneurs, including robust corporate venture capital structures.
Investors
Start-up venture companies will be interested to learn that Japan’s IPO market is very active with relatively low economic entry bars. Listings backed by funding from $10 million up to a billion dollars occur regularly, and the Japanese market is very conducive to further investments post-listing. Japan is home to a healthy habitat of strong tech incumbents interested in M&A. Local companies looking to go public or secure investment may draw interest from companies like SoftBank, Rakuten, and Sony. They, and many more large corporations, are actively looking to invest in start-ups and scale-ups.
Japan is one of the most technologically advanced countries in the world, with tech expertise across industries, education, IT, patents and more. Tech drives investments of all sizes in Japan. Technology solutions also see strong incentives and potential in contributing to Japan’s futuristic Society 5.0 plan, which puts technologies such as AI, robotics and fintech at the centre of a country-wide infrastructure and financial performance revolution. With the world’s third-largest GDP, Japan is self-reliant with robust infrastructure and stable politics. It is known for first-class talent and desirable levels of education.
The technology landscape in Japan
The Malaysian government supports the technology industry through initiatives and legislation. One example is creating a safer digital ecosystem to build trust among consumers, businesses, and investors. To achieve this, it has allocated RM10 million in the 2023 budget to establish a National Scam Response Centre (NSRC) and strengthen cybersecurity measures. The government is also actively promoting the digitalization of public services and financial inclusion through initiatives such as the MyDIGITAL blueprint, Integrated Data Exchange, and ePermit to further encourage the growth of a skilled and digitally empowered nation and enhance Malaysia's competitiveness in the digital economy. Financial inclusion through digital banking is another focus area, exemplified by the digital banking licenses issued in 2020 by Bank Negara Malaysia, making banking services accessible through online and mobile platforms.
Government support
The technology ecosystem
Malaysia and the World Economic Forum collaborated on establishing the Centre for the Fourth Industrial Revolution (“C4IR”) in Malaysia, the first of its kind in the ASEAN region. The centre focuses on the digital economy, energy transition, and digital transformation. Malaysia is rapidly adopting digital technology solutions, with over 82% of businesses utilizing digital tools. The country has one of the highest e-commerce adoption rates in Southeast Asia. Over 45% of the population engages in online transactions. A thriving business environment and rapid economic growth make Malaysia an attractive destination for technological companies looking to establish headquarters or expand their business in Southeast Asia.
Investors
Malaysia's progress as a thriving digital and technological hub is evident through its expanding role as a global business destination, technological readiness, and focus on digital transformation. The country's efforts to improve cybersecurity, digitalize public services and foster financial inclusion demonstrate its commitment to creating a competitive and digitally empowered nation. Malaysia has also been recognized in the World Bank Doing Business 2020 rankings as the 2nd best country for protecting minority shareholders, contributing to its attractiveness for private equity and venture capital firms.
With a significant shift of European companies to Southeast Asia, Malaysia has rapidly expanded and thrived as a global business hub and continues to do so. This trend is expected to bring more employment opportunities and investment into the country. Malaysia is 32nd in the United Nations Conference on Trade and Development for frontier technological readiness (2nd among ASEAN countries). It is 27th among 64 of the world’s most competitive economies (2023 IMD World Competitiveness) and 12th for business accessibility (2020 World Bank Ease of Doing Business). The results mirror the government's objective to enhance Malaysians' living standards by attracting foreign investment and promoting the development of science, advanced technology and services.
The technology landscape in Malaysia
The Indonesian government has shown strong support for the technology sector. The Omnibus Law, in particular, has streamlined licensing processes, reduced bureaucracy, and provided greater flexibility for foreign direct investment. These measures have attracted local and foreign technology companies, encouraging innovation, job creation, and economic development. Indonesia has also launched initiatives to enhance digital literacy, provide training opportunities for entrepreneurs and tech professionals, and foster collaboration between the public and private sectors. Such support has created a conducive environment for technology companies to thrive and expand their operations.
Government support
The technology ecosystem
Indonesia is vibrant and diverse, encompassing e-commerce, fintech, agritech, and edtech. Startups and established companies are leveraging digital innovation to address societal challenges and drive economic growth. The country is home to numerous unicorns, such as Traveloka and GoTo. The Omnibus Law has helped simplify regulations and improve the business climate, making it easier to found and operate technology companies in Indonesia. As a result, numerous startups have emerged and established companies have grown, contributing to the technology ecosystem's performance.
Investors
Investors have demonstrated increasing interest in the Indonesian technology sector. Both domestic and international venture capital firms are actively investing in promising startups and established technology companies. Fintech is a prime example. Fintech Global Research figures show a 75% increase in investments in Indonesian fintech companies between 2021 and 2022. The introduction of the Omnibus Law, which has improved the business climate and regulatory framework, has further attracted investors, leading to increased funding opportunities for technology companies. These investments provide the necessary capital for companies to scale their operations, develop innovative products and services, and expand their market reach.
Indonesia is experiencing a transformative phase, driven by the introduction of the Omnibus Law and Data Protection Law. Implementing the law challenges technology companies and opens up new opportunities. The new regulations protect individuals' privacy rights and regulate personal data collection, use, storage, and transfer. Companies must obtain explicit consent, ensure data security, and enable individuals to exercise their data rights. Compliance with the Data Protection Law has necessitated significant investments in data infrastructure, security measures, and internal processes. However, the regulations also create opportunities for companies to build trust with consumers, enhance data protection practices, and differentiate themselves in the market. Overall, the technology sector in Indonesia is poised for further growth and advancement, contributing to the country's economic development & global competitiveness.
The technology landscape in Indonesia
Digital transformation is a vital priority for governments and companies across the world. Columbia is no exception, and The Ministry of Information and Communication Technologies (MinTIC) has projects focused on facilitating and increasing citizen access to technological environments across areas that support further growth of the technology sector. Initiatives include creating digital centres, installing free internet points, and strengthening the telecommunications industry. Similarly, new regulations applicable to Information and Communication Technologies (ICT) have been introduced to help strengthen existing models and regulate new programs that promote digital evolution.
Government support
The technology ecosystem
Colombia – in particular, Medellín – is a hub for the "fourth industrial revolution, " notable for its innovation and entrepreneurship, attracting a presence by technology heavyweights like Apple, IBM, and HP. E-commerce is one of the main sub-industries contributing to Columbia’s rapid technological development. Softbank's 2019 investment of US$1 billion in Rappi, a Colombian delivery application, was an international stamp of approval and signalled the vast potential in the space. Another strong growth catalyst is fintech, with digital payments, alternative financing models, and neobanks being the most potent market accelerators.
Investors
Colombia's technology investment landscape is thriving, with key investors such as Tiendex and Gol2Soul striving to bridge technology gaps. They focus on aiding remote regions, empowering small entrepreneurs, and enhancing tech education. Internationally, Colombia's drive for growth, efforts to bridge technological divides, and initiatives to foster local businesses make it an attractive destination for global investors. Its commitment towards a technologically sustainable future and the growth potential of its emerging TMT sector further boosts its appeal on the international investment stage.
The breadth and scope of Latin America’s business potential continue to attract businesses to the area, especially those looking to establish themselves or expand into new markets. With strong trade links, an enviable geographical position and an ever-increasing middle-class market, Columbia provides an excellent foundation for local and international businesses. According to the World Bank data, Columbia ranks among the region’s top countries for ease of doing business, scoring particularly high in areas such as access to credit and protection of minority investors. Among the main drivers for companies – and investors – looking to establish a foothold in Columbia is the potential for services and products to reach an extensive population. Other draws include access to the country's highly skilled, relatively inexpensive workforce and the possibility to use operations in Columbia as a springboard to further Latin American expansion.
The technology landscape in Colombia
The Costa Rican government has implemented various initiatives to promote the technology sector's growth. One example is innovation funds established by the government to support start-ups and technology-based projects financially. Well-known funds include the "Technological Innovation Program" (PROINNOVA) and the "Seed Capital Fund. Costa Rica has developed a favourable regulatory framework for technology-based businesses. The country has strong intellectual property protection laws and streamlined business formation and operation processes. These regulations provide a stable and supportive environment for tech companies. The Costa Rican administration also promotes technology-related education and talent cultivation through programs and schemes to improve education standards in science, technology, engineering, and mathematics (STEM) fields.
Government support
The technology ecosystem
Costa Rica has a vibrant technology ecosystem. It is also a hub for user experience (UX) and user interface (UI) for front and back-end development, along with R&D operations. The nation's higher education and research bodies actively participate in technological exploration and progression. Institutions such as the Costa Rican Institute of Technology (TEC) and the University of Costa Rica (UCR) foster innovation and generate intellectual property. Simultaneously, organizations like "ParqueTec" provide entrepreneurs with resources, mentorship, and networking opportunities. The Costa Rican Chamber of Information and Communication Technologies (CAMTIC) helps tie all parts together and promote synergies across educational institutions, commercial sectors, and governmental agencies.
Investors
Several venture capital firms have recognized the potential of Costa Rica's tech ecosystem, and the country has seen investments in local start-ups. Simultaneously, multinational corporations and global technology giants have established a presence in Costa Rica. The presence is in the form of both the likes of research and development centres and regional headquarters. Companies such as Intel, Amazon, IBM, and Microsoft have invested in the country and contributed to the tech ecosystem's continued growth and the creation of new job opportunities.
Over the past ten years, Costa Rica has seen considerable evolution of its technology sector. Its comprehensive telecommunications framework and extensive internet accessibility form a fertile ground for tech-based businesses. The country's emphasis on education, ingenuity, and digital metamorphosis has further augmented its stature as a significant technology centre. Costa Rica has embraced technological development across the board, leading to an expansion in sectors such as biotechnology and environmental technology. Today, Costa Rica's economy thrives on knowledge, exporting services at twice the rate of OCDE nations, and has a presence from 16 of the top 100 global IT corporations. This contributes to growth in fields like software, data interpretation, cloud, and cybersecurity services.
The techology landscape in Costa Rica
The Argentine government has shown interest in and support for the development of the technology industry. Programs and policies that promote innovation and technological entrepreneurship have been implemented across the board. Highlights include the creation of technology hubs and city districts to encourage the growth of start-up and company ecosystems across the country. Argentina also boasts of specific tax benefits and other government support schemes that support companies in the so-called "knowledge industry." Similarly, Argentina is encouraging and supporting training plans and training of human resources aimed at developing IT capabilities.
Government support
The technology ecosystem
The Argentine tech ecosystem is robust, hosting numerous technology companies and start-ups. In a Latin American context, Argentina has a strong position with continent-leading companies in powerful spaces such as fintech. The country is also home to a well-educated population and a rich university system, which has helped the technology industry continually increase its financial performance even as the country struggles with increased economic volatility. New unicorns keep appearing despite the challenging economic context. Argentina is home to 11 companies with a stock market price greater than a billion US dollars (all within the technological category).
Investors
Investors have shown a growing interest in the Argentine tech ecosystem. However, the lower appetite for risk, influenced by recent years’ macroeconomic developments and economic uncertainty, has led to some slow-down. As a result, there is an increased focus on in-depth due diligence, financial analysis, and financial projections ahead of M&A deals. Competent consultation and expert advice are extra important for companies seeking optimal funding and deal outcomes. National and international investors have continually financed start-ups and technological projects in Argentina. In addition, investment funds specific to the technology sector have been established, providing additional capital to drive the growth and expansion of start-ups.
Digital services and solutions are rapidly transforming Argentina and the rest of South America. Companies are increasingly focused on achieving higher levels of operational efficiency to meet emerging challenges. To achieve this, they are implementing cutting-edge technologies and working on innovative ways to address the ever-evolving needs of their customers. Continuous improvement is the goal across solutions and user experiences. In this context, technological innovation is a crucial factor for success that helps guarantee customer and user retention. These dynamics all contribute to the growth of local technology companies, which provide services transnationally. Simultaneously, Argentina’s relatively low costs help heighten interest in the technology industry.
The technology landscape in Argentina
The UK government aims to ensure the UK's place as a global tech superpower by 2030. Priorities include AI and semiconductors. The UK will soon host its first global summit on AI safety. The UK’s Enterprise Investment programme provides investors in smaller businesses with a 30% or 50% reimbursement. Generous SME R&D taxes increase the UK market’s competitive edge. A myriad of research grants and corporation tax incentives are also available. The Patent Box scheme is noteworthy, offering a 10% tax break on profits from patented technology. The UK tax system may seem complex, but it is manageable - especially with good advice. The UK’s world-leading networks of tax treaties also promotes international trade and investment.
Government support
The technology ecosystem
Synergies between London's traditional finance powerhouses and its vibrant fintech scene are a core driver for Britain's technology industry. However, the sector continues to go from strength to strength across geography and sub-industries. A tech hub rich in digital media, software, cybersecurity, AI/machine learning, and emerging tech companies runs through London from Shoreditch, Clerkenwell, to Southwark. Further out, the 'Heathrow Airport effect' has created a tech belt housing large US tech firms from west London to Bristol. Brighton, Southampton, the Midlands, and Manchester are vibrant tech hotspots; so is a 'brain belt' from Oxford to Milton Keynes, notable for life sciences.
Investors
The UK has a sophisticated, diverse investor landscape. Crowdfunding, angel investors, and investor clubs cater to the sub-£1 million segment. At the VC and the PE end of the spectrum, a wide range of highly expert and experienced professionals, backed by well-regarded houses, have no shortage of funds. The UK PE and VC community holds a large proportion of the US$3.7 trillion global dry powder (funds yet to be invested). Businesses with good ideas, plans and teams stand to benefit from advice from globally leading growth professionals. BDO UK has an excellent track working with companies and investors, assisting both optimise investment outcomes.
In 2022, the UK technology industry become the only third in the world to surpass US$1 trillion in market value. In short, the UK is very much open for business. Tech hubs dot the British map, with businesses of all sizes performing strongly. English remains the business lingua franca. The country is home to world-leading universities and has a rich science, culture, and research history. All contribute to Britain's ability to produce and attract some of the world’s premier technology talent and companies. A positive entrepreneurial loop characterises the UK technology industry. For example, ex-Googlers often establish start-ups in London. Google’s AI division is also firmly rooted in London. Similarly, European HQs of big US tech firms spawn many Thames Valley start-ups.
The technology landscape in The United Kingdom
Brazil
United Kingdom
Costa Rica
Colombia
Argentina
The Spanish government has shown a clear interest in promoting the technology sector and has implemented various initiatives to drive innovation and entrepreneurship, including an innovative Startup Law approved at the end of 2022. Financial and fiscal support programs have been established for startups and technology companies, along with measures to attract foreign talent. In addition, specific investment funds have been created to support technological projects, and public-private collaboration has been encouraged in strategic areas such as AI and digital transformation.
Government support
The technology ecosystem
Spain has a solid telecommunications infrastructure and broadband connectivity, which has facilitated Barcelona and Madrid becoming important technological hubs, ranked between the top 10 cities in Europe, attracting entrepreneurs, investors, and international talent, thus fostering the development and presence of incubators, accelerators, and coworking spaces that promote entrepreneurship, collaboration, and innovation. This generates a broad technological ecosystem where numerous technology-related events and conferences provide networking and learning opportunities. This ecosystem also benefits from the presence of universities and centers that promote research and technology training (more than 60% of Spanish classrooms are facilitated through IDS – Interactive Digital Systems), while also promoting collaboration with the business sector, thus producing highly skilled professionals
Investors
This technological ecosystem in Spain has experienced a significant increase in interest from national and international investors, with numerous venture capital funds and business angels, as well as large companies and corporations, investing in the technology sector and establishing innovation and transformation programs. 2021 (4.3 billion euros) was a record year in this regard compared to 2022 (3.5 billion euros), which saw a 20% reduction. In summary, Spain has experienced notable growth in its technological landscape, with a strong presence of startups, an expanding technological ecosystem, government support, and growing interest from national and international investors.
In recent years, Spain has experienced significant growth in the technological landscape. Spanish startups and technology companies have emerged in various sectors, but the focus on 2022 was in the field of Wellness & Health (55% of Spaniards prefer to have online medical consultations), LegalTech (more than 140 projects ongoing) and ecommerce & retail (growth of 35%), among others.
The technology landscape in Spain
Spain