Most of the inherent cost of a startup is salaries (offices usually second). Most of salaries goes for paying for housing (with market rate and education usually being the other major costs).
Say you have two startup environment. One where it is affordable with housing, education and most people could try to start a startup and another where those things are expensive and few can. Which one requires more capital and which one is more successful?
Investments are something you get when attractive companies are being created. Not something that creates attractive companies in itself. Plenty of countries have plenty of rich people but most don't stand out in terms of successful startups.
Say you have two startup environment. One where it is affordable with housing, education and most people could try to start a startup and another where those things are expensive and few can. Which one requires more capital and which one is more successful?
Investments are something you get when attractive companies are being created. Not something that creates attractive companies in itself. Plenty of countries have plenty of rich people but most don't stand out in terms of successful startups.