As we head into 2019, the number of AI startups continues to increase globally, with over 3,500 currently in business. Of these, approximately 40% are located in the United States, with China and Israel coming in at 2nd and 3rd place, respectively. These figures are intriguing however, as the number of AI startups based in the US (1,393) is almost as much as China, Europe and Israel combined (about 1,500).
Reasons for the US dominance within the AI industry are varied, but it comes down to a few fundamental factors. It’s no secret that the United States has a well-established technology industry based in Silicon Valley and the Greater New York/Boston area. The market is occupied by mega-caps such as the likes of Alphabet, Facebook, Amazon, Microsoft, Intel and others. The presence of large tech companies in itself doesn’t guarantee a nation’s dominance in AI, however many of these large, cash rich companies actively provide funding to, or invest in, smaller firms that are developing bleeding-edge technology.
Additionally, since Silicon Valley is arguably where the global high-tech industry originally got started, it comes as no surprise that this is where most venture capital and private equity investors are based. The presence of these well-funded investors gives security to small businesses who have a great idea but need cash to get off the ground. Oftentimes, these smaller companies will be acquired by a larger player down the line once its technology is established, or if promising signs are shown. Alternatively, there are equally great prospects for startups to attract enough investor interest to undertake an IPO.
While access to capital and growth opportunities are important factors in the success of startups, talent is also a top consideration. Because the US technology industry has been active for over four decades, this has resulted in the establishment of world-renowned training and research institutions, in addition to a large pool of qualified talent. AI, or more specifically, AGI, can easily be considered on the leading edge of current technological capabilities.
Because the US has such a high concentration of qualified talent, AI startups have a relatively easy time recruiting people with the right qualifications, skills, and experience.
According to industry insider, Fabian, “The US is a role model in terms of how a technological industry can grow strongly when governmental stimulation, applied research by universities and corporations, entrepreneurship, private funding, and a thriving M&A market play well together”.
This brings us to our home country of New Zealand. With a population of 4.8 million people, or about eight times less than the state of California alone, there is simply no comparison when it comes to building a startup.
In addition to its pristine natural environment and friendly people, New Zealand consistently ranks highest among ease of doing business, and lowest in terms of corruption. However, its small population and distant location presents a unique set of challenges. In order to assemble the team at IMAGR, talent had to be hired from around the world, and our current openings have been cast as wide as New York and LA.
On the investment front, the NZ private equity/VC industry simply isn’t as well established compared to the United States or even Australia. For these reasons, we have sought investment from global investors who share our vision for creating a smarter, more personalized shopping experience. We are proud to have the likes of Sage Technologies and Ingenii onboard, with investor Harald McPike showing strong support at an early stage.
Despite the challenges, NZ offers many benefits. Due to its small size and lack of the “noise” found in Silicon Valley, NZ based startups are more likely to be noticed and recognized for their achievements. Government backed organizations such as Callaghan Innovation provide small businesses with access to experts, R&D funding, and opportunities to collaborate with established firms in developing innovative technologies.
The startup environment in NZ is looking increasingly bright, and IMAGR is well positioned for growth. We hope to achieve mainstream adoption of our AI powered, SMARTCART technology within the next few years, and perspective customers are already showing great interest in what the technology has to offer.