London, Berlin, Paris…when it comes to tech, it’s usually the capital cities that make the headlines. However, over recent years there’s been a slow but noticeable shift to so-called secondary cities and that’s not just down to lower costs in the regions. So what do cities such as Kraków in Poland or Manchester in England offer that’s so attractive to tech companies?

The first common factor is access to a wide talent pool. Of a total population of 775,000, Kraków has approximately 135,000 students enrolled at one of the city’s 21 universities. Similarly, there are over 100,000 students attending one of Greater Manchester’s higher or further education institutes, where retention of students in the city is over 60 per cent, with a further 24 universities and higher education institutes in the North West of England, making for an additional 400,000 students in the surrounding areas.

The second common factor is an established and growing tech infrastructure. Manchester’s has matured significantly over recent years with Savills research reporting that the city’s office market has seen more technology, media and telecoms (TMT) take-up over the last 17 years than any other regional market in the UK.

This dominance is expected to continue. The share of flexible office space take-up in the city has risen from 7 per cent in 2018 to 15 per cent in 2019. Almost 8,000 new businesses started up in 2016 while the opening of Mi-IDEA and the Sir Henry Royce Institute for Advanced Materials will provide greater opportunities to support the retention of talent and cultivate start-up and incubator businesses across the city.

Kraków traditionally had a strong shared service centre background with well-qualified and cost effective staff. While this is still the case, over the past few years there’s been a trend towards IT and advanced tech companies looking for high calibre employees and willing to cooperate with both start-ups and universities such as SpyroSoft, TE Connectivity, Infinity Ward, Varroc Lighting Systems, Symphony Solutions, Grand Parade, EQTek, Ocado, Qualtrics and Caspio.

The third ingredient is vibrancy and a rising international profile. According to the Association of Business Service Leaders in Poland (ABSL)’s annual report, Kraków was recognised as the best city for doing business in 2018. Manchester has attracted more foreign direct investment in the past decade than any other UK city outside of London and is home to over 2,000 foreign-owned companies.

Kraków and Manchester provide great work-life balance and are well connected to other big Polish and UK cities, respectively. The amount of construction taking place in both is huge, whether that’s housing, office space, public transport, roads, student housing, hotels or the higher education institutions.

As a result, some tech companies are skipping the capitals and moving straight to the second cities. Examples include international technology-led services and payments specialist, Equiniti (EQTek), choosing Kraków to open its first office in Poland, taking 2,350 sq m (25,295 sq ft) of office space at the Equal Business Park C with the option of further expansion, advised by Savills.

Similarly, online travel giant, Booking.com, is taking 20,624 sq m (222,000 sq ft) at Manchester Goods Yard on a 12-year lease. The site, set for completion in 2021, will be the global hub for the company’s ground transport products, and its largest office outside of its main headquarters in Amsterdam.

Further information

Contact Savills Poland Office Agency