Venture Capitalists Around the Globe Identify Pockets of Technology Innovation According to a Study by Deloitte and The National Venture Capital Association

United States Maintains Lead, but Europe Shows Strength in Life Sciences and CleanTech; Asia Shows Strength in Information Technology

SAN JOSE, Calif., June 3 /PRNewswire/ -- While venture capitalists continue to view the United States as the global leader in technology development and innovation, they also recognize specific pockets of technology innovation worldwide, according to a survey by Deloitte and the National Venture Capital Association (NVCA).

The 2008 Global Venture Capital Survey, which was conducted in March 2008 and measured the opinions of nearly 400 venture capitalists worldwide, found European countries are emerging as leaders in life sciences and clean technology, two of the fastest growing sectors globally. Asian countries were recognized as offering a high level of innovation in the information technology fields.

"The United States maintains the top spot as the global technology leader in innovation," said Mark Jensen, national managing partner of Deloitte LLP's Venture Capital Services. "While the United States isn't losing ground, the globalization of innovation is under way. The rest of the world is finding out what they're good at, and venture capitalists recognize where those strengths lie."

"While technology innovation and entrepreneurship have largely been a United States phenomenon, other countries are quietly excelling in areas that are critical to the future of venture capital investment," said Mark Heesen, president of the NVCA. "We are operating in a global economy and venture capitalists will follow the best technologies. Those countries that can marry the innovation and entrepreneurial work ethic as the United States has done will become formidable economic competitors in the 21st century."

Europe Shows Strength in Life Sciences and Clean Technology Sectors

According to venture capitalists surveyed, Europe is emerging as a new leader behind the United States for life sciences and clean technology sectors. Germany and the United Kingdom in particular are quickly gaining recognition for their technological savvy in these fast-growing industries.

Germany was recognized by 43 percent of all respondents as having the best expertise in the rapidly growing clean technology field, just behind the United States. Other countries to receive attention in this industry included Japan and Brazil.

"Germany is the beneficiary of a well-conceived, stable public policy that has ensured attractive markets for alternative energy technologies. This, combined with a strong general technology base, has fostered substantial innovation in the space," said David Prend, partner, Rockport Capital. "As a result, for example, Germany, a country with marginal sun, is a leader in solar photovoltaic technology that they export to the rest of the world. Venture capital follows quality technology and innovation," he added.

In the field of medical devices, 39 percent of the venture capitalists surveyed also cited Germany as being the second most recognized country for technology in medical devices and equipment, followed by the United Kingdom at 20 percent and Israel at 14 percent.

Regina Hodits, partner in the life sciences group at Atlas Venture, observed, "Germany, and more broadly the Alpine region, has always been a home to invention in the medical device field with a strong incumbent industry base. Today, this region provides a favorable environment for medical device development based on the regulatory framework, a high degree of innovation emerging from world-class medical research institutions and experienced key human resources." Additionally, "London, the Medicon Valley in Denmark and Sweden, and emerging centers of excellence in Switzerland, are hubs around which biotech innovation is growing," she added.

The United Kingdom was identified in the second spot by 31 percent of the respondents as having leading technology for biopharmaceuticals, followed by Switzerland at 18 percent and Germany at 15 percent.

Asian Countries Vie for Top Spots in Information Technology

While there has been great interest surrounding the promise of China and India as emerging technology centers of the world, the United States continues to be viewed by the majority of venture capitalists surveyed worldwide as the global leader in technology in all IT sectors. Yet, Asian countries consistently ranked high in information technology among all other nations.

Japan Leads behind the United States in Telecom

After the United States, Japan fared well in the minds of venture capitalists in telecommunications with 27 percent of all respondents identifying the country as having leading technology in the sector. Sixteen percent of the VC respondents named Israel as a leader in telecommunications.

"The Japanese government was one of the first to recognize the value of developing and maintaining a pervasive, high-speed broadband infrastructure throughout the country, fueling significant innovation around the next generation of broadband applications," said Dixon Doll, co-founder and general partner, DCM. "Today, we are seeing a new wave of entrepreneurship in the country as it relates to communications. Providers such as Yahoo!BB, who are aggressively innovating, are compelling the traditional broadband monopolies to do the same. The result is extremely healthy competition and can only mean more advancements in the Japanese telecommunications arena going forward."