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A THREAD (with visuals!) on where the unicorns are around the world:
At #Davos and elsewhere recently, I’ve been in lots of discussions about nat’l competitiveness, innovation policy, etc. as we move deeper into the 4th Ind. Revolution, 2nd Machine Age, or whatever we call it.
There is no shortage of strongly held opinions on these topics, but there’s often a shortage of broad-based evidence. During one discussion, I found myself wondering where the world’s unicorns were and what, if anything, their distribution might tell us.
A “unicorn” here is a privately held, tech-based company valued at >=US$1 billion. @CBInsights recently posted a list of members of the “Global Unicorns Club.” So let’s use it.…
I’d think that all other things being equal richer countries would be more likely to generate unicorns (more affluent consumers, more risk capital, stronger institutions, etc.), as would more populous countries (bigger home market customer base).
So let’s draw a graph: GDP per capita on the x-axis, population on the y-axis (log scale to better show the range from Estonia to China), with each unicorn-having country plotted as a blue bubble, the size of which is proportional to the combined market cap of all its unicorns.
Here’s the graph.
It also has red bubbles; what do they represent? They represent relatively rich countries (i.e. members of the OECD) that don’t have ANY unicorns.
(all data are here:… )
All countries are labelled. The label for unicorn-having countries includes in parentheses the total number of unicorns in the country. The Eurozone also has its own bubble.
I see three “zones” on this graph. The first is closest to the origin, and so contains smaller, poorer countries. We see relatively few unicorns here. Most countries under 100M people and w. GDP per capita under $30k don’t have unicorns (but check out the Baltics!).
The 2nd zone, farther from the origin, contains more populous and/or wealthier countries. Unicorn-havers are the rule here, not the exception. But there are surprises in both directions.
Why don’t Ireland or Norway, both rich, have any unicorns? After all, Switzerland’s blue bubble is right in their neighborhood. Why are Mexico or Russia, both of which have well over 100M people, both red?
The group of relatively rich but small (~10M) countries is a mixed bag. Singapore, Hong Kong, Israel, and Sweden all have multiple unicorns. But Denmark, Finland, New Zealand, Austria and Belgium combine for zero of them.
The more populous countries in this income band are all blue, with the glaring exception of Italy. But the size of the bubbles varies a LOT. The UK completely hides France, for example, and South Korea swamps Spain. Japan’s bubble also looks quite small here.
The third zone, farthest from the origin, is the home of the blue giants: hugely populous China and India, and the big and rich US. China and the US, to no one’s surprise, dominate the unicorniverse. As Chinese living standards rise, its bubble should get enormous.
The Eurozone, which is just as populous as the US and ~⅔ as rich, is not nearly as fertile a breeding ground for unicorns. It has only ~12% as many, with a combined market cap of less than 10% of the American unicorn herd.
How much do these differences in unicorn husbandry matter? I think that’s a great question, and an important one.
Maybe unicorn husbandry doesn’t matter much at all. It’s certainly possible to have a prosperous and inclusive society that doesn’t generate unicorns, or prioritize digital entrepreneurship.
It’s also possible that current unicorns are a lousy proxy for sustained digital entrepreneurship and innovation at the national level. After all, WeWork &etc. Finally, this graph only captures a point in time. Bubbles were differently sized in the past, and some red ones blue.
But even with those caveats, I think this graph is informative. Many now believe that “digital” will be as transformative in the 21st century as electricity and internal combustion were in the 20th, or steam in the 19th (I certainly believe this).
The countries whose companies best mastered these earlier techs became the dominant countries of those centuries. I don’t think this is a coincidence at all.
Countries with dominant tech sectors become economically and militarily powerful. Also, their institutions and cultures shape the technologies that get created and diffused.
When technology is changing the world, in short, you probably don’t want your country to be on the sidelines of this change. I think that unicorn density today is one leading indicator of who’s likely to be on the sidelines in the 21st c, and who isn’t.
I’d love to know what others think. @erikbryn @lhsummers @lagarde @paulkrugman @benedictevans @pmarca @tomfriedman @ianbremmer @noahpinion @paulmromer @mazzucatom @tylercowen @timharford @atabarrok -- what does the global distribution of today’s unicorns tell you?
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