Yacine El-Mahdi Oualid

Former Minister of Knowledge Economy, Start-ups, and Micro-enterprises of Algeria. Current Minister of Vocational Education and Training of Algeria

Innovation or Isolation:
The Future of Regional Ecosystems

The key themes shaping innovation today are concentration and agglomeration.

Contrary to popular belief, the world of innovation is far from “flat.” 
Instead, innovation is heavily concentrated in a select few global hubs that thrive due to their dense networks of scaleups, abundant access to capital, and rich pools of talent. Leading the charge are innovation powerhouses like Silicon Valley, Israel, and a handful of other dominant centers worldwide. These hubs consistently capture the attention and investment of “innovation hunters”—venture capital funds, multinational corporations, and more – creating a self-reinforcing cycle that cements their dominant positions.To highlight their influence, 50% of Fortune 500 companies maintain a presence in the Bay Area, while 28% are established in Israel.

In contrast, the majority of local ecosystems – spanning countries, regions, and cities – remain largely underrepresented and face a widening gap. For these “tier 2” ecosystems, navigating the stages of the Innovation Ecosystems Life Cycle is a lengthy and challenging process. Based on our data, it typically takes:

– Around 10 years to develop a national innovation hub.

– Another 7–8 years to establish a strong presence as a continental hotspot.

Despite the challenges, there is good news. Some regions are making faster progress by prioritizing policies and public investment that stimulate local economic growth through technological innovation. A key trait of these “fast movers” is their ability to rapidly scale and build global connections.
These efforts not only foster vibrant local ecosystems but also connect startups to international funding and strategic opportunities. By establishing partnerships with global startups and research centers, these ecosystems enable local companies to tackle innovation challenges and adopt open innovation strategies.

The progress of these fast movers underscores the importance of identifying and replicating best practices from successful ecosystems, whether at the city, regional, or national level. Initiatives like Startup Ecosystem Stars, developed in collaboration with the International Chamber of Commerce (ICC), aim to spotlight these benchmarks and help more local ecosystems secure a spot on the global innovation map.