Asia and the death of Silicon ValleyJager McConnell CEO of Crunchbase@jagermcconnell

Source: http://www.laughtraveleat.com/

Asia has already surpassed Silicon ValleyAmount of capital invested

Amou

nt o

f cap

ital i

nves

ted

(in B

illion

s of

USD

)

$10B

$20B

$30B

$40B

$50B

$60B

2008 2009 2010 2011 2012 2013 2014 2015 2016

Silicon Valley Asia

Source: Crunchbase Data

Source: “The Course of the Empire - Destruction” by Thomas Cole, 1836

Disclaimer: Silicon Valley isn’t dead (yet)

how did we get here?

Computer and mathematical occupations

Num

ber o

f Job

s

800,000

900,000

1,000,000

1,100,000

1,200,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Demand for IT jobs increases in the U.S.

Source: U.S. Bureau of Labor Statistics

Increasing Wages in the U.S. matched demandMedian weekly earnings for computer and mathematical occupations

Dol

lars

(USD

)

$1,200

$1,250

$1,300

$1,350

$1,400

$1,450

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: U.S. Bureau of Labor Statistics

Cumulative U.S. jobs displaced by China

Out

sour

ced

Jobs

1,850,000

2,200,000

2,550,000

2,900,000

3,250,000

2006 2007 2008 2009 2010 2011 2012 2013

United States sends its jobs to Asia

Source: Economic Policy Institute

Graduates in Science, Technology, Engineering, and Mathematics in 2016

China

India

United States

Russia

Iran

Indonesia

Japan

1,000,000 2,000,000 3,000,000 4,000,000 5,000,000

Asia invests in education to meet demand

Source: World Economic Forum

Asian companies tracked in Crunchbase

Num

ber o

f com

pani

es fo

unde

d

900

1,200

1,500

1,800

Year of company’s founding

2007 2008 2009 2010 2011 2012 2013 2014

Tech companies founded in Asia dramatically increases

Source: Crunchbase Data

Number of Unicorns founded per year

Num

ber o

f uni

corn

s

5

10

15

20

25

30

Based on year founded, includes exited and private unicorns

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Asian unicorns founded

Asia starts breeding unicorns

Source: Crunchbase Data

Number of Unicorns founded per year

Num

ber o

f uni

corn

s

5

10

15

20

25

30

Based on year founded, includes exited and private unicorns

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

U.S. unicorns founded Asian unicorns founded

Asia outpacing the U.S. in new unicorns

Source: Crunchbase Data

who is profiting?

Investor Portfolio of Asian companies increase in 2016

47%40%

38%

35%28%

27%

25%23%

21%

18%

13%

Top Asian investors leading the way in Asia

Source: Crunchbase Data

Top Silicon Valley investors’ investment count in Asia

Num

ber o

f Inv

estm

ents

30

60

90

120

2012 2013 2014 2015

Sequoia Capital Accel Partners Intel Capital

Increase since 2012

316%

177%

89%

Source: Crunchbase Data

Top Silicon Valley investors are jumping onboard

Geographic distribution of lead investors in Asian-based companies

United States

China

India

Singapore

Israel

Japan

Hong Kong

South Korea

United Kingdom

Number of investment rounds since 2012

200 400 600 800 1000 1200 1400 1600

The United States is outsourcing its capital

Source: Crunchbase Data

what’s next?

Salary hike in 2016 across Asia-Pacific

India

China

Philippines

Malaysia

Hong Kong

Singapore

Australia

Japan

Percent Growth

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11%

The cycle repeats: wages are starting to increase

Source: Aon Hewitt

China’s working-age population

Perc

ent o

f the

pop

ulat

ion

55%

60%

65%

70%

75%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Available workers are starting to decrease

Source: United Nations, National Bureau of Statistics

Change in working age population (age 15-64)

Milli

ons

of p

erso

ns

-100M

-50M

0M

50M

100M

150M

200M

250M

300M

350M

1990 2000 2010 2020 2030 2040 2050 2060

Rest of world

A global decrease of people entering the workforce

Source: IMF, Regional Economic Outlook, Chapter 3, April 2015

Change in working age population (age 15-64)

Milli

ons

of p

erso

ns

-100M

-50M

0M

50M

100M

150M

200M

250M

300M

350M

1990 2000 2010 2020 2030 2040 2050 2060

Sub-Saharan Africa Rest of world

Creating opportunities for other parts of the world

Source: IMF, Regional Economic Outlook, Chapter 3, April 2015

Source: CIA Factbook

Population under the age of 25 years old

Nigeria

Kenya

Zimbabwe

Ghana

South Africa

USA

UK

Japan

Percent of population

0% 10% 20% 30% 40% 50% 60% 70%

As a generation of young people in Africa grows

Job creation in African start-ups

Job

Gro

wth

Rat

e

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

2011 2012 2013 2014

Jobs in African tech startups skyrocket

Source: The Atlas

Africa primed for the future

Large labor force

29 million workers enter labor force yearly

Booming entrepreneurship

22% start a businessof working age adults

Young population

60% of populationunder 25

Internet readiness

45% of GDPwas transacted via mobile in Kenya

Source: African Economic Outlook 2017

Big players seem to think so

Is Africa China’s China?

Chinese investment in Africa has risen from $7 billion in 2008 to $26

billion in 2013 (“Knowledge@Wharton,” UPenn)

Over $100 billion in African roads, telecom, water, power and light industry financed by

China over the last 15 years (“Delivered,” DHL)

And China already seeing the benefits

Source: China Statistical Yearbook, SAIS China Africa Research Initiative

China’s trade with Africa

US

Dol

lars

(Billi

ons)

$25B

$50B

$75B

$100B

$125B

$150B

$175B

$200B

1995 2000 2005 2010 2015

Exports to Africa Imports from Africa

Will Africa become the world’s next tech hotspot?

Tweet your thoughts @jagermcconnell