Research from leading property consultancy CBRE has placed Edinburgh fourth in a ranking of Europe, Middle East and Africa’s (EMEA) normal technology clusters.
The report, EMEA Tech Cities: Opportunities in Technology Hotspots, provides a framework for occupiers and investors to assess the characteristics of technology clusters in economic, leasing and employment terms at regional and city level.
The analysis identifies four separate categories of technology cluster – scale, super, normal and growth – based on a city’s level, concentration and growth of tech sector employment. This approach reflects the fact that technology clusters are very diverse in their structure, cost base and attraction to specialist technology sub-sectors.
Edinburgh’s fourth place ranking in the normal cluster category reinforces its status as an important location in the technology sector for EMEA. Normal cluster cities are categorised on the basis of having between 20,000 and 50,000 people in high-tech employment, and a higher percentage of employment in the sector than the EU average.
Angela Lowe, senior director at CBRE in Edinburgh, commented on the findings: “Normal clusters are typically smaller capital cities supported by universities producing a high standard of tech graduates. With its financial services sector, reputable universities, and Scotland’s devolved government, Edinburgh ranks highly in this category.
“A fast growing and dynamic group of industries based around a complex system of locational clusters with diverse characteristics, the tech sector is key in many office markets, including Edinburgh. CBRE’s latest research on the EMEA tech landscape provides further valuable insight into trends and locational analysis to help us understand factors that could influence future market activity.”
Ahead of Edinburgh in the normal cluster category were Oslo (1st), Basel (2nd) and Hamburg (3rd), while cities such as Geneva (5th), Utrecht (8th) and Brussels (10th) also made the top ten.
Cities in the normal cluster also tend to be those where costs are lower than cities in the same or neighbouring countries, and where companies often chose to locate a second tech centre, or centre of excellence. In doing so, they can make themselves an employer of choice, rather than competing with others for the same talent.
The scale clusters category, which covers the largest clusters defined as capital cities and business centres with more than 70,000 people in tech employment, sees London take the top spot, while other high ranking cities include Madrid (2nd), Dublin (3rd), Budapest (4th) and Bucharest (=10th).
With labour and skills of critical importance to the tech sector, CBRE’s research helps shine a light on less obvious options for companies seeking locations with a suitably skilled workforce.
Richard Holberton, Head of EMEA occupier research, CBRE concludes: “Labour is not only fundamental to the success of the technology sector, it also has distinctive characteristics including a high incidence of contract employment, greater transparency of rewards and use of online channels both for job-checking and brand development.
“In addition, talent perspectives are changing, with millennial workers accustomed to taking risks and often not aspiring to work for large brands. Start-ups, where they can take ownership of a product or activity is where they turn to for advancement. Analysis of the characteristics of tech labour markets should be integral to location decisions, and many smaller but fast-growing cities in the EMEA region offer favourable possibilities.”