The best cities for business innovation

An interesting new study reveals which global cities are focal points for conceiving new ideas and solutions in the business world, as well as the industries in which they excel. B2B financial service platform has released a study showing the best cities in the world for business innovation. The study splits the innovation landscape into different areas, including research and development, startup activity and funding availability, in addition to looking at innovation on an individual industry level, for example in artificial intelligence, biotechnology and fintech. The resulting index gives insight into which global cities lead the way in having ecosystems that are fertile for business innovation, and reveals which cities are global leaders for innovation in each industry.


Business innovation rarely happens in isolation. Throughout history successful innovative companies have initiated the development of a supporting ecosystem in their home town or city, for example Ferrari, which brought employment and manufacturing expertise to Modena in Italy almost a century ago. More car companies subsequently moved to the city, including Lamborghini and Maserati, attracted by its deep industry knowledge and skilled workforce. This process eventually led to the creation of the so-called “Motor Valley” in that part of Italy. The same trend continues to be seen today, with different cities leading the innovation landscape in different industries. The study shows that Boston is the leading city for biotechnology innovation, while San Francisco tops the list for green technologies innovation. These cities have significant industry know-how and a wealth of supplier companies that feed into the supply chain.


“Some of the results were expected,” comments FINOM Co-Founder and CEO Yakov Novikov. “For example London’s dominance of fintech innovation and San Francisco’s index high score for green technologies innovation. More surprising were Beijing’s leading scores for innovation in the areas of AI & machine learning, education and mobility, which speak of significant strategic investment being made in the city. Beijing also tops the list for R&D spending by governmental organisations and venture capital funding, giving some indication of the availability of funding for local innovative companies. It is also surprising to see that the EU is lagging behind on business innovation, having only one city, Paris, in the global top 10 of our index”.

On the other hand, as we cannot fail to notice, 35 of the 100 most innovative cities in the long list are in the EU, as compared to 25 (often bigger) cities in the US and 5 in China. Comparing continents shows that North America has 30 very innovative cities, Europe 46, Asia 13 and Australia 5. Asian and American cities tend to be higher up in the rankings.


The tables below reveal a sample of results for the 10 best scoring cities out of the 100 cities in the index, and the 10 leading cities for venture capital funding, indicating a high amount of VC funding. All scores are out of 100, with 100 being the highest possible score and 50 being the lowest.

The tables below reveal a sample of results for the 10 cities with the best governmental organisations R&D scores and those with the best universities R&D scores:

The following tables reveal a sample of results for the 10 cities with the best startup scores, indicating a large number of funded startups, and the 10 leading cities for fintech innovation:

The tables below reveal the 10 leading cities for artificial intelligence & machine learning innovation, and for biotechnology innovation:

How the study was conducted

FINOM began by creating a shortlist of 200 cities based on their size and significance in the business world, which they narrowed down to the best scoring 100. The cities were then analysed according to two broad categories. The first category, Innovation Areas, was made up of a number of subfactors which relate to different stages of the business innovation process. The second category, Industries, looks at which cities are leading business innovation on an industry by industry level.

For the first category, the research and development spending by companies, governmental organisations and universities in each city was assessed in recognition of the central role that R&D plays in innovation in business. Next, the industrial ecosystem in each city was assessed to gauge the contribution of industry to the local area. In particular, it looked at the employment manufacturing and engineering companies bring to each city, and whether companies in these sectors are headquartered in the cities. The tech ecosystem was then analysed to measure the diversity and maturity of this sector in each city.

Following this, the number of startups founded since 2010 that have received funding since 2015 in each city were counted in order to acknowledge how innovation in business often comes from more nimble, disruptor companies. The total venture capital funding received by companies in each city since 2010 was also included as a measurement of the local support available for innovative businesses. For the second category, the study analysed the size of the local business ecosystem devoted to different innovative sectors, including artificial intelligence, biotechnology and green technologies, in order to capture how much different cities are dominating the growth and development of certain industries.

The resulting index provides an overview of the best global cities for innovation in business, ranked by scores and divided by country.

Written by: editors Smart City Hub

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