Savills launches Tech Cities programme 2021

Savills Tech Lifestyle Cities 2021:

Tech Lifestyle Cities characteristics: under 5 million population; large tech industry or medium-sized but growing; global and regional connectivity; presence of complementary industry; at least one highly ranked higher education establishment; a talent magnet; vibrant urban neighbourhoods, nightlife and culture; tends to have a good balance between sustainable city living and access to out of town pursuits; lower costs than in Tech Megacities, but rising.

These cities meet high standards of air quality, access to green space and have smaller geographic footprints whilst also providing the services and products that tech talent seeks today, such as a fast broadband speeds and an affordable vegan burger, as explored in Savills new Digital Nomad Essentials Index.

Paul Tostevin, director and Tech Cities programme lead, Savills World Research, comments: “Punching well above their weight on a global stage, Tech Lifestyle Cities offer city living on a smaller footprint, contributing to a better work-life balance, and have superior air quality without sacrificing the buzz of a larger location. They also provide the services and products important to today’s foot-loose tech workers at a reasonable price, and therefore most also all appear in our Digital Nomad Essentials Index.

“Given that Covid-19 has led to many people purportedly looking to prioritise a better standard of living, a strong performance here may indicate a city’s future growth. Tech companies in our Lifestyle Cities can offer staff healthier environments and better affordability, with high levels of in-migration supporting future expansion, but these benefits must be set against rising costs, a product of the cities’ success.”

Savills Digital Nomad Essentials Index

Using proxies – the cost of a flat white, a vegan burger, a MacBook, fast broadband, flexible office space, some classic trainers, premium headphones and clean air – as the likely attributes and products you might find alongside a young tech worker where they choose to work, the Savills Digital Nomad Essentials Index can help identify the locations that may be most desirable to tech talent and therefore the occupiers looking to recruit such employees.

Tech Megacities and Rising Global Contenders

The Savills Tech Cities programme, which has run since 2015, previously ranked the best cities for tech occupiers and talent. However, given the events of 2020 and the move towards different types of city appealing to different types of occupier, for its 2021 programme it has grouped them by tiers instead: Tech Lifestyle Cities (as above), Tech Megacities and Rising Global Contender Tech Cities.

The Megacities, due to their scale and ability to attract VC investment, are set to remain core hubs of tech activity, says Savills, even as well-being factors become more important, while the Rising Global Contender Tech Cities are ones to watch as characterised by huge leaps in VC investment in recent years, they offer cost and lifestyle advantages for tech talent and occupiers over their established peers.

Savills Tech Megacities 2021:

Tech Megacities characteristics: a large population; a major VC recipient and a primary tech hub within its region; globally connected with complementary sectors; world-leading higher education and in-migration; has vibrant neighbourhoods and nightlife; the cost of living higher than the national average.

Savills Rising Global Contender Tech Cities 2021:

Tech Rising Global Contender Tech Cities characteristics: smaller cities, but growing; tech industry has risen from a low base and/or easily accessible to a larger tech hub; recorded a big jump in VC investment recently; good regional and some international connectivity; strong higher education sector; in-migration rising; vibrant urban neighbourhoods, nightlife and culture; tends to have a good balance between sustainable city living and access to out of town pursuits; lower costs than Tech Lifestyle and Tech Megacities

Jeremy Bates, head of occupational markets EMEA, Savills, adds: “Across all our Tech Cities tiers, tech organisations have been prolific in taking new office space in recent years, and even during the pandemic major deals have been announced. But many companies have long embraced flexible working and some are re-evaluating their wider space requirements, while still acknowledging the importance of a flagship HQ for instilling company values, collaboration and for attracting staff, as skilled employees in the tech sector remain scarce, even as unemployment rises.

“Many of our Tech Cities have seen costs of residential accommodation rise recently as workers flocked to them. Covid-19 may slow this trend, at least in the West, as people seek new places to live. Corresponding rising availability in CBDs may see districts previously out of reach become more affordable to scaling tech companies, opening up new parts of cities to start-ups and fresh young talent, the lifeblood of the tech sector.”