Shifting Hubs: The Geography of Innovation

Where are emerging innovation hotspots? The future being created everywhere.

“When you change the way you see the world, you change the world you see.” - Satya Nadella, CEO of Microsoft

When we think of innovation, places that typically come to mind are Silicon Valley, Tel Aviv, or perhaps Shenzhen. Yet the future isn’t being built in just these well-known innovation hotspots. It’s being forged in cities you might not expect, driven by necessity, local conditions, and a hunger for progress.

The Global Innovation Index (GII) 2023¹, produced by the World Intellectual Property Organization, paints a picture of innovation becoming far more distributed than we think. These places may be off our radar - and perhaps they shouldn’t be.

Let’s take a tour of lesser-known innovation hubs:

Chișinău, Moldova: Innovation Against the Odds

Moldova may not immediately come to mind when thinking about innovation leaders in Europe. Yet, despite being one of Europe’s less-advanced economies, the Global Innovation Index (GII) tells a different story. Moldova has been outperforming expectations in innovation for 13 consecutive years. Despite its limited resources, the country is leveraging its tech talent and proximity to larger markets to create a strong startup culture. One of the key drivers of this innovation is Tekwill, Moldova’s digital hub, which launched in 2017 with funding from USAID and the Government of Sweden². Over the initial five years, Tekwill helped over 472 teams reach better business outcomes, create opportunities, and seek investment. Altogether, it has trained and oriented over 150,000 people in digital skills and entrepreneurship. By fostering a vibrant environment for young entrepreneurs, Tekwill has made a significant impact on Moldova’s ability to punch above its weight in tech innovation, positioning the country as an emerging tech player despite its economic challenges.

Ulaanbaatar, Mongolia: A Land of Renewable Innovation

In Mongolia, innovation is being driven by the need to protect its unique environment and adapt to its harsh climate. Ulaanbaatar, the capital, has seen significant progress in renewable energy, particularly solar power. Mongolia’s abundant sunshine makes it an ideal location for solar energy projects. In 2022, the country launched its largest solar farm to date, the Khushig Valley Solar Park³, which is expected to provide clean energy for thousands of households. This foreign-backed project aims to reduce emissions and secure energy independence for a country historically reliant on coal. Additionally, Mongolia’s vast solar and wind resources, combined with its strategic location, are opening the door for energy exports to neighboring countries such as China. This has sparked innovation in transmission systems and cross-border energy trade, while smart grids and energy storage solutions are being developed to manage surplus power efficiently. This milestone could have far-reaching socioeconomic, environmental, and geopolitical benefits, strengthening Mongolia’s energy security and regional influence.

Manila, The Philippines: Fintech and Digital Transformation

The Philippines is a Southeast Asian economy on the rise, with Manila at its center. Over the past decade, the country has embraced digital innovation, particularly in fintech and e-commerce. Companies like GCash, a mobile wallet platform, are transforming how Filipinos access banking services⁴. As of the end of 2023, GCash had over 94 million registered users and is accepted by more than 6 million restaurants, convenience stores and other businesses⁵. GCash enables payments, savings, and loans through a smartphone app, bypassing traditional banks. In a country where millions remain unbanked, this kind of innovation is life-changing. As of 2023, the Philippines is ranked 56th in the GII and is a country to watch given its rapid embrace of technology and digital finance.

Riga, Latvia: The Startup Nation

Latvia is quietly establishing itself as a significant player in the European innovation scene. Ranked 37th in the GII, Latvia’s innovation success is fuelled by its thriving startup ecosystem, particularly in logistics, e-commerce, and deep tech. Riga, the capital, has become a hub for startups like Printify, a platform that allows users to design and sell custom products globally, which has attracted significant international attention and investment⁶. Latvia’s strong digital infrastructure and its ability to scale ideas quickly are key factors in its rise as an innovation leader.

Ho Chi Minh City, Vietnam: From Factory to Innovation Hub

Vietnam continues to climb the innovation rankings, currently sitting at 46th in the GII. Once known primarily for its manufacturing base, the country is now leveraging its strong industrial foundation to fuel innovation. Ho Chi Minh City is emerging as a center for tech innovation, particularly in software development, AI, and fintech. Vietnam’s startup ecosystem has seen exponential growth, with companies like MoMo, a leading fintech platform with approximately 31 million users⁷, gaining widespread traction⁸. By leveraging technology to create scalable solutions, Vietnam is fast becoming a tech hub to watch.

Cape Town, South Africa: A Leader in Renewable Energy

South Africa, ranked 59th in the GII, is leading the charge for innovation in Sub-Saharan Africa, particularly in renewable energy. Cape Town, with its abundance of sunshine, has become a testbed for solar power solutions. Companies like the SOLA Group are creating scalable solar energy systems that provide electricity to businesses and homes across the country⁹. South Africa’s innovation ecosystem is also thriving in sectors like fintech and agriculture, with startups using AI and blockchain to improve farming practices and financial inclusion.

Riyadh, Saudi Arabia: A Rising Digital Economy

Riyadh has not typically been synonymous with tech-driven innovation, yet Saudi Arabia is changing that narrative. Ranked 48th in the 2023 GII, Saudi Arabia is rapidly becoming a hotspot for innovation, particularly in renewable energy and digital infrastructure. The Saudi government’s Vision 2030¹⁰ initiative is driving major investments into green energy projects like NEOM¹¹, a futuristic smart city powered by clean energy, as well as digital initiatives to build a global tech powerhouse in the desert. The rise in venture capital and infrastructure projects is turning Riyadh into a surprising player in the global innovation game.

Tallinn, Estonia: A Digital Society Pioneer

Estonia, ranked 15th in the GII, continues to be a world leader in digital governance. Tallinn’s e-Residency programme¹² is just one example of how Estonia has become a pioneer in digital society. This programme allows anyone in the world to start and run a business within Estonia’s digital ecosystem without being physically present in the country. Over 117,000 people from 176 countries have signed up for e-Residency since its launch with more than 32,000 companies created by e-residents¹³. This contributes to Estonia’s reputation as a leader in e-governance and tech innovation.

These cities and countries show us that the future isn’t just being built in expected places - it’s emerging, evolving, and expanding in regions that have adapted to local conditions, embraced emerging technologies, and devised innovative solutions to their unique challenges. Innovation is not confined to Silicon Valley or Shenzhen; it’s happening in the deserts of Saudi Arabia, the valleys of Mongolia, and the bustling markets of Ho Chi Minh City.

The Shifting Geography of Innovation

Technology is undoubtedly driving the shift in the geography of innovation, decentralizing it from traditional hubs. Yet, its impact is further accelerated by trends such as economic growth, rising purchasing power, youthful talent pools, and expanding markets, all of which help fuel locally-led scale. In many low- and middle-income countries, while technological advancements act as the catalyst for change, the sustained momentum comes from these broader economic and demographic forces, ensuring that innovations can scale and thrive.

The future is being created everywhere.

There is more to the world than what we see.

When you change the way you see the world, you change the way you shape it.

As leaders, when we expand our worldview, we strengthen our understanding of the world. We remove blind spots and biases, gaining a clearer vision of where to build networks, identify partnership opportunities, scan for competitive threats, and explore expansion possibilities.

By seeing more of the world, we are better equipped to shape the future and define our roles within it as leaders.

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1. https://www.wipo.int/edocs/pubdocs/en/wipo-pub-2000-2023-en-global-innovation-index-2023-16th-edition.pdf

2. https://ict.md/projects/tekwill/#:~:text=During%20the%205%20years%20of,initiatives%20in%20tech%20in%20Moldova

3. https://renewablesnow.com/news/adb-lends-usd-187m-for-solar-project-in-mongolia-647224/

4. https://new.gcash.com/

5. https://asia.nikkei.com/Business/Finance/Philippine-e-wallet-GCash-eyes-evolution-into-all-in-one-financial-app#:~:text=It%20had%20over%2094%20million,by%20the%20local%20financial%20culture.

6. https://printify.com/

7. https://vir.com.vn/momo-dominates-vietnams-e-wallet-market-with-68-per-cent-share-102059.html

8. https://www.momo.vn/

9. https://solagroup.co.za/

10. https://www.vision2030.gov.sa/en

11. https://www.vision2030.gov.sa/en/explore/projects/neom

12. https://www.e-resident.gov.ee/

13. https://www.e-resident.gov.ee/dashboard/