Venture capital firms view several emerging markets as having highly sophisticated pockets of technology, but still see the US as the world’s dominant source of innovation, according to a survey of venture firms conducted by the National Venture Capital Association and Deloitte.
More than 41 percent of respondents said that India was either the first or second “best” country in terms of software technology, trailing the US by a wide margin but still beating the UK at 13 percent, Israel at 12 percent and Germany at 9 percent.
Although less impressive than India’s showing, China fared similarly well when respondents were asked which countries possessed the best semiconductor technology, garnering 16 percent of respondents ranking it first or second and overall ranking third among all countries.
“[Asian countries] have very large quantities of well-trained and reasonably priced engineers,” said Dixon Doll, founder of global venture firm DCM. “But the biggest advantage of all is that these countries know and can figure out the real ways to build local services in their respective geographies that are optimised for the requirements of the local user.”
Conducted in March, the survey asked 398 general partners to rank which countries they believed had the “best” level of development across several technology sectors. Not surprisingly, the US came out on top in every category, usually beating European and Asian counterparts by wide margins.
The only notable exception was in alternative and clean energy, where only 56 percent of respondents ranked the US as having the best technology. Twenty-one percent of respondents thought Germany had a more sophisticated green technology sector.
Taiwan ranked second in semiconductors, the UK second in pharmaceuticals, Germany second in medical devices and equipment, and Japan second in telecommunications.
In an attempt to create a representative cross-section of the global venture community, 41 percent of survey respondents were based in the US, 20 percent in Asia Pacific, 19 percent in Europe excluding the UK, 10 percent in Latin America, 6 percent in the UK and 4 percent in Israel.
Respondent firms ranged from those with less than $100 million in assets under management to greater than $1 billion.
The survey also found that 57 percent of US and 58 percent of non-US venture firms were currently investing outside of their home country.