In an industry where people are the most important resource, Savills Tech Cities programme has always examined what tech talent is looking for in a place to live and work. As we cautiously look at what is to come for real estate industry and the people and businesses that populate it this year, we examine which cities are likely to become the ones to watch in the tech world: the ‘Global Tech Contenders’.
Characterised by huge leaps in venture capital (VC) investment in recent years, economic growth in these cities is being fuelled by burgeoning tech sectors. They offer cost and lifestyle advantages over their more established peers, and some cities have even found the legacy industries for which they were once famous revitalised by technological advances. Taking a closer look at these locations it’s clear that themes such as reinvention and resurgence, digitalisation and a bid to compete with capital cities have come to the fore.
Detroit, which was devastated by the GFC and the near-collapse of the American auto industry, is reinventing itself from ‘motor city’ to ‘mobility city’. From partnerships between Fiat-Chrysler and Google to GM and Lyft to Ford’s Smart Mobility division and its work with EV start-up Rivian, tech is now at the heart of its auto industry. Similarly, Yokohoma has reinvested its shipping and trade economy thanks to its highly skilled workforce which has, in turn, attracted a rise in international investment allowing the city to boost its global profile.
Looking at those cities which demonstrate an already established tech scene and it’s Tallinn, Estonia, and Vilnius, Lithuania, that really impress. In Tallinn tech very much drives the economy and its the complete integration with government and daily life provides an excellent environment for businesses and individuals in the tech industry. In Vilnius 1,000 start-ups and 200 fintech companies are responsible for driving investment and growth in the country. The city is also home to Europe’s first Blockchain centre which opened in 2019.
It’s not only those well-established locations which are shining through. Eindhoven, The Netherlands, and Manchester, UK, are prime examples of two cities whose international profiles have seen exponential growth in recent years. Both boast thriving tech communities, drawing on education and research establishments and the talent they foster to bolster their commitment to technology. The High Tech Campus in Eindhoven and the University of Manchester are dedicated to this.
Finally, as we move to warmer climes, Bogotá and Cape Town are two cities that are rising rapidly up the VC investment ranks. Bogotá, the fastest growing city of all the Savills Tech Cities, is investing heavily in the tech industry by providing training programmes for workers and tax incentives for companies and its geographic position has helped it become a strategic tech hub for the region. In Cape Town, fintech start-ups are taking advantage of the mature financial ecosystem in the city to scale up and gain notice. In fact, according to Invest Cape Town, almost 60 per cent of South Africa’s start-ups are located in here.
Each of these ‘Global Tech Contender’ cities is likely to see continued demand from tech occupiers looking to tap into their skilled talent at a lower cost, or from home-grown companies riding the wave of developing tech subsectors. If they continue down their current paths their future potential to join more established tech centres looks promising.
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