NEW YORK SEES OFF SAN FRANCISCO TO TAKE CROWN AS WORLD’S PREMIER TECH CITY – SAVILLS
- New York 1st in Savills Tech Cities ranking due to its deep talent pool, position as a global centre of commerce, and major tech arrivals this year, including Amazon. San Francisco ranked 2nd , dragged down by world’s highest co-working costs
- London 3rd globally thanks to strong performance in ‘mobility’ and ‘buzz’, remaining the dominant tech hub in Europe with three times more venture capital (VC) investment in 2018 than Paris
- Cluster of 6 Chinese cities make their presence felt: Beijing received $34 billion of VC investment per year in the last three years - higher than New York or San Francisco
- What is a Savills Tech City?: it is an important centre of tech in its region; a major recipient of VC investment; on the shopping list for expanding global tech companies; a vibrant city in which to live and work; a generator of, and magnet for talent
New York is the world’s foremost centre for tech, providing the business environment, talent pool, lifestyle and transport links to make it the premier base for companies, according to the third iteration of ‘Tech Cities’ – international real estate advisor Savills global research programme. Following New York, San Francisco, London, Amsterdam and Boston, round out the global top five.
The Savills index measures what makes a successful Tech City against 100 individual metrics, ranging from the number of days needed to start a business through to the cost of a flat white coffee, grouped into six categories: business environment, tech environment, city buzz & wellness, talent pool, real estate costs, and mobility. Each category is weighted to reflect its importance to the tech sector.
London’s integrated transport puts it ahead for mobility
For the first time, Savills has measured ‘mobility’ as part of its Tech Cities ranking: with global urbanisation rising, a city’s ability to get people from A to B efficiently is rising in importance, says Savills. Even if a city has a good pool of tech talent, if employees cannot get to their workplace quickly and cheaply this will harm the prospects for tech occupiers, and the overall success of the city. Savills has considered three elements when assessing mobility: the availability, density and investment in shared mobility services, the scale and level of innovation in the city’s metro system, and the quality of urban infrastructure.
While not leading in any single category, London ranks first overall for mobility, says Savills: its public transport system offers smart ticketing (mobile, contactless, Oyster), integrated across all transport modes (from rail to bus). Pollution remains a major issue, however, while upgrading the world’s oldest metro system poses ongoing challenges.
Nicky Wightman, Director of Global occupier trends at Savills, comments: “Savills 30 Tech Cities are among the fastest growing in the world: measured by metro area, together they’re forecast to add another 18 million inhabitants in the next decade. This will put ever greater pressure on existing infrastructure, posing a risk to city competitiveness, hence why mobility is now an important component in our index, with many of our Tech Cities at the forefront of addressing the issue.
“While London is the best mobility all rounder, it’s lower than it should be on shared methods of transport, and could take lessons on how to do this better from the Asian cities. Vice versa, Asian and US Tech Cities can learn lessons from London and other European tech hubs on how to improve the quality of urban infrastructure and making their transport networks more sustainable.”
Paul Tostevin, Associate Director in Savills World Research team, and Lead Researcher on Tech Cities, adds: “While it’s interesting to see New York take the top spot this year, edging out San Francisco which is suffering from higher co-working costs, one of the most interesting trends we’ve noted in the last two years is the rise of China’s Tech Cities. While largely mid-table overall, these cities now account for more VC investment than their US counterparts: the US-city share of the VC investment into our 30 Tech Cities has dropped from a 40% share to 28% since 2012, while Chinese cities have seen their share rise from 11% to 36% over the same period. Beijing has by far the greatest VC investment, but our ranking puts Shanghai ahead as a more ‘global’ tech city, however, thanks to an international business environment and better of quality of life for residents.”