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European tech hubs hoping to rival Silicon Valley

Virtual image of Paris' prospective incubator for 1,000 start-ups
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"Silicon Allee" may not have the same ring as Silicon Valley, but California's success in turning out technology giants like Facebook, Apple, Yahoo and Google has spawned other would-be "Silicons" across Europe.

Aspirants include the well-established Tech City in London, as well as newer hot spots like the small Baltic countries.

Factors that can make or break a "Silicon wannabe" include a strong education system, solid political, economic and legal systems, technical infrastructure, engineering talent and funding opportunities.

Read on to find out which European "Silicons" may have what it takes.

View more: Fierce competition in Silicon Valley

—By CNBC's Katy Barnato. Contribution from Arjun Kharpal.

London, England

Silicon City, London
Chris Ratcliffe | Bloomberg | Getty Images

Nicknames: Tech City, Silicon Roundabout.

Where: The majority of tech start-ups are concentrated around Shoreditch, east London. Other up-and-coming areas include the former Olympic Park.

Size: There are 34,400 digital technology businesses in London and around 155,600 digital technology employees, according to promotional group London & Partners.

Success stories: Two London start-ups have already been sold this year—DeepMind Technologies was bought by Google for $666 million and Zynga went to Natural Motion for $527 million.

Other start-ups: HAIL, a taxi-hailing app; Wonga, "payday" loans; and Raspberry Pi, a credit card-sized computer.

London Mayor Boris Johnson says: "There is nowhere to rival London for tech firms to thrive and grow—we have the talent, the investors and the entrepreneurial spirit."

Watch out for: London's inaugural Technology Week, June 16-20, 2014.

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Berlin, Germany

German Chancellor Angela Merkel visits a start-up in Berlin, Germany
AFP | Getty Images

Nickname: Silicon Allee—after the German word for alley.

Start-ups include: Wooga, a mobile games developer; SoundCloud, the audio-sharing platform and The Football App, a mobile soccer-tracking app.

Advantages: Viewed as one of Europe's "coolest cities." Low—but rising—living and office space costs.

Downside: Traditional German risk aversion.

Watch out for: One Spark Festival in Berlin in mid-September—the crowdfunding festival's first event outside the U.S.

Read MoreSilicon Valley boom eludes many, drives income gap

Tel Aviv and surroundings, Israel

An employee monitors printed images from commercial printing machines at the Hewlett Packard Israel Ltd. Indigo division headquarters in Ness Ziona, Israel, Sept. 15, 2013.
Ariel Jerozolimski | Bloomberg | Getty Images

Nicknames: Startup Nation, Silicon Wadi—after the Arabic/colloquial Hebrew word for valley.

Specialities: Life sciences, particularly healthcare and fertility. Also software development and defense.

Start-ups include: MyHeritage, the genealogy social network and website, and Datapipe Newvem, cloud data analytics.

Big companies in the area: IBM, Motorola, SAP, Hewlett-Packard and Microsoft. Google has established a start-up "campus" in Tel Aviv, as a space for developers and entrepreneurs to organize events and develop ideas.

Read MoreHealth start-ups actually making money

Tallinn, Estonia

Lionel Bonaventure | AFP | Getty Images

Specialities: Digital technology—particularly software.

Advantages: Well-educated, highly motivated people who are tech-savvy and entrepreneurial. Few big corporations present to lure away potential entrepreneurs. Government committed to developing the digital economy.

Downside: Low wages mean many talented Estonians head abroad to work.

Success story: Estonia has claimed Skype as its flagship achievement. The instant messaging/video conference service was created jointly with Danish and Swedish developers.

Venture capital: U.S. angel investor and entrepreneur Dave McClure has backed Tallinn's tech scene, as has Jon Bradford of Techstars in London. Other investors include Ambient Sound Investments, which was started by four of Skype's founding engineers.

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Cambridge, England

Jian Wan | Getty Images

Nicknames: Silicon Fen, the Cambridge Cluster.

Specialities: Scientific and technological research.

Advantages: Home to a world-leading university, convenient for London, attractive location.

Success stories: ARM, the chip design company, and consumer electronics company Sinclair Research.

Watch out for: Pharmaceutical giant AstraZeneca is building a £330 million research and development center in Cambridge, which will house a 2,000-strong workforce by 2016.

Read MoreUK scientists launch IPO for latest 'wonder material'

Dublin, Ireland

Candy Crush saga game on iPhone
Simon Dawson | Bloomberg | Getty Images

Nickname: Silicon Docks.

Advantages: English-speaking, low corporate tax rates, cheaper living costs than London.

Google says: "A generation ago, Dublin's docklands section was known for its urban decay. Today, it's Ireland's home base for technology, teeming with start-ups as well as the European headquarters for some of the biggest tech companies in the world".

Home-grown company: King Digital Entertainment, the maker of "Candy Crush" which recently listed on the New York Stock Exchange.

Big players in the city: Dublin is the Europe, Middle East and Africa headquarters for Facebook, Linkedin and Google. Twitter and Zynga also have Dublin offices.

Watch out for: Aer Lingus airline is resuming direct Dublin-to-San Francisco flights this month, reportedly in response to lobbying from tech executives.

Read More Taxes 'one element' behind tech boom: Irish PM

Paris, France

Chris Ratcliffe | Bloomberg | Getty Images

Nickname: Silicon Sentier.

Advantages: President Francois Hollande announced a raft of pro-business reforms at the start of this year, which included modernizing the corporate tax system.

Disadvantages: Reliant on funding from "incubators"—programs to help develop start-ups—and self-funding, rather than venture capital. French bureaucracy.

Home-grown companies: Video-sharing platform Dailymotion; technology firm Criteo, which listed on the Nasdaq exchange in March; social analytics firm Mesagraph, which was purchase in March by Twitter.

Watch out for: Paris is building the world's largest digital incubator facility, which it hopes to house 1,000 start-ups from 2016.

Read MoreFrance's Silicon Valley to launch start-up hub

M4 highway, UK

Simon Dawson | Bloomberg | Getty Images

Nicknames: Silicon corridor, M4 corridor, Silicon Alley.

Where: Stretches along the M4 highway, which runs from west London to south Wales and includes Bristol and Bath in England, and Cardiff and Swansea in Wales.

Specialities: Aerospace and defense, digital media.

Big companies in the area: Both Microsoft and Oracle have their U.K. headquarters in Reading; Hewlett-Packard is headquartered in Bracknell and Sony is based in Basingstoke.

Advantages: Prosperous part of the U.K., mostly well-connected to London.

Downside: Among the areas worst hit by the U.K.'s severe floods earlier this year.

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Vilnius, Lithuania

Daugirdas Tomas Racys | Moment | Getty Images

Specialities: biotech, life sciences.

Home-grown companies: Biomapas, a medical research company, and Mobassurance, which sells insurance policies via mobile.

Advantages: Government committed to emulating the success of Baltic neighbor Estonia. Lack of big companies offering alternative employment. Proximity to the Kaunas University of Technology—one of the largest technical universities in the Baltics.

Downside: Still small compared to other tech hubs and little-known outside of the Baltic region. Possible lack of skilled IT labor relative to sector's growth.

Watch out for: Life Sciences Baltic forum, which will take place in Vilnius, September 10-12, 2014.

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