Can Europe compete on startup scenes?

Last month at Next Conference in Berlin, I have met  Daniel Fogel, founder of BeeFM - one of the finalist pitching startups - and I had a very interesting discussion with him about Israeli startup scene and how an entrepreneur activating there is seeing the development of Berlin as a startup scene.

He was telling me that Israel is considered to be a "Startup Nation" with an entrepreneurial tradition of more than 20 years encouraged by the Government and by the existence of many great engineering graduates. Therefore, many Israeli startups rise and shine ("At the start of 2009, 63 Israeli companies were listed on Nasdaq, more than those of any other country", according to Wal-Street Journal), especially in the high-tech industry. Many of the local entrepreneurs turned Business Angels and now they help younger people to succeed. VCs also found a great investment potential in the region ("Venture capital investment per capita in Israel is 2.5 times more that in U.S.and 6 times more than in the U.K.", according to Wall-Street Journal). And big high-tech companies run successful R&D departments there.

Daniel, originally from Serbia, found Israel to be a great developed area for an entrepreneurial spirit like him. Besides the advantages mentioned above, he also added the spread of English language, especially since startups there are built to go global, and the low costs of living compared to Western Europe.

Looking now at how Berlin is developing it's startup scene, on the trial to become the number one place in Europe, Daniel feels it is "like Israel 10 years ago", and he adds that Berliner entrepreneurs should, most of all, get the right mindset about entrepreneurship - they should prepare for "an amazing journey with lots of sacrifices, but that might lead to success".

Will we see European startup scenes (most recent bets being on Berlin) taking over Israel, Silicon Valley and others? And if yes, what do they need? Perhaps a peek outside Europe will help, and Israel is a great example.