Introduction
For the first two years of the pandemic, the tech sector shone as a resilient and rising sector for talent in the post-pandemic world. Despite this, the first half of 2022 was a difficult period for many companies, and the tech sector has not been immune to these challenges. This has included declines in stock values, hiring freezes and layoff announcements.
The mid-2022 turbulence is part of normal cyclical downturns that impact financial markets and specific industries. We expect the tech sector to continue to be a driving force for economies around the globe. The demand for tech talent—even if some job losses occur—will not abate anytime soon. Because of this, the evolution of cities as clusters for tech talent and tech occupiers will remain critical to commercial real estate (CRE) decision-makers.
On a global scale, tech is a larger portion of major economies —and commercial real estate—than ever before. Over the past decade, global technology employment increased substantially. Across the largest 15 global economies, information and communication employment increased by nearly 23 million workers, and it is forecast to grow by 17%, adding another 12 million workers over the next 10 years.1
In Q1 2022, 3.3% of all jobs in the top 15 global economies were in the information and communication sector.
It is an even greater share in countries such as China, Ireland, Singapore, Finland, the UK and Japan. The share is forecasted to increase over the next decade to 3.7%, led by 100+ bps increases in share in current stalwarts—Ireland, China and Singapore—along with growing Eastern European countries, such as Romania and Hungary.2
The tech sector was resilient to the initial effects of the pandemic, rebounding quickly and outpacing most other sectors. Office-using and tech employment fully recovered to pre-pandemic levels within two years in most major economies. For example, in Q1 2022 the European Union had 7.4% more information and communication workers than in Q1 20204 and the growth is likely to continue.
As of May 2022, there were 685,000 job postings for tech occupations, which represent a 75% increase over the 394,000 postings in February 2020.5 As the global economy continues to shift, tech talent will remain a critical driver of growth and a key component of how the CRE sector will evolve through the 2020s.
Measuring the Evolution of Tech Cities
The concept of ranking tech cities can prove difficult because each company’s growth strategy differs, based on current locations, specific skills and labor needs, location of customers, and the present and future state of countless financial and business priorities.
For example, Paris has more than twice the number of available technology workers as Chicago, but less than half as many computer programmers; a company looking to deepen their programming depth may lean toward a new location in Chicago, while another organization needing to enhance its data science and analyst capabilities might find Paris more attractive. Regardless of location, the cost of workers needs to be balanced with any discussion of depth of the talent pool.
Location strategy is always driven by a combination of these key factors: talent, office real estate, the local environment for businesses and employees, and all the related costs.
All that said, in this report, we identify key metrics that will be important to most—if not all—tech companies and illuminate the current leading tech hubs as well as the up-and-coming opportune locations that companies could consider for future expansion. Every expansion or relocation decision is nuanced and full of company- and time-specific criteria, however some key factors remain consistent.
Key Evaluation Metrics
Cushman & Wakefield selected more than 115 different tech cities across the world to evaluate the talent, real estate and business environment. The top tech hubs in each global region are identified by aggregating 14 factors, weighing each according to perceived importance for tech companies’ market selection criteria, and then validating through industry experts and rigorous model testing.
>>Click for more information on our complete Methodology and Endnotes.
Top Tech Cities by Global Region
The result is the following list of top markets in each region, sorted alphabetically:
This is one method to identify top tech hubs but is not the definitive ranking for all companies or real estate investors. Throughout the report, you can sort global cities by various talent, real estate and environment metrics utilized for this analysis.
