London has been ranked as the top EMEA tech hub, beating out cities such as Madrid, Dublin, Budapest and Paris, according to a new report published by commercial real estate firm CBRE.
The report grouped Europe's tech clusters into four groupings: "scale," "super," "normal" and "growth."
In three of the four groupings, UK regions or cities topped the rankings -- London in scale, Thames Valley in super, and Derby/Nottingham in growth, while Norway's Oslo topped the "normal" cluster. Scale clusters are defined, according to the report, as "Capital cities, second cities or regional business centres" which have more than 70,000 people in high-tech employment." Super clusters, meanwhile, are defined as a "mix of established tech locations, and locations where tech has grown to support a specific sector or set of sectors" which have more than 50,000 employees in total but less than 70,000.
While London beat second-place scale cluster Madrid and third place Dublin to the top spot, Thames Valley topped Zurich and the UK's own M3 Corridor to lead the super cluster category.
CBRE calls London a "magnet for young millennial talent" and finds that tech sector employment in the UK capital has grown by 20% since 2008. Possibly unsurprisingly, the largest employers in the software sub-sector are Microsoft and Oracle, while other large tech employers include Accenture and IBM, with Vodafone and BT leading in the telecoms space.
By analyzing office and workspace leasing transactions over two years, CBRE was able to come up with a picture of what different companies were up to. According to this analysis, London has a fairly good mix of companies in different tech sub-sectors, both traditional and new, with 20% of tech firms in London in the "new" digital advertising/marketing/media sub-sector in 2016-2017, while 2% of companies were in fintech -- the highest of all the scale clusters.
As for the Thames Valley, CBRE finds it is "one of the most established technology clusters in Europe," and that the region is dominated by workers with over ten years' experience. London, in comparison, has a younger, less experienced tech workforce, which is typical of a major capital city -- but overall does have higher rates of more experienced employees, although younger millennials also rank highly.
Thirty one percent of the Thames Valley tech companies, meanwhile, are "traditional," with almost a third (31%) of tech companies in the region in the software sub-sector, with 23% in traditional hardware. The "new" sub sectors of e-commerce (9%), digital advertising/media/marketing (4%), games (4%), fintech (less than 1%) and cybersecurity (4%) suffer in this region, probably due to the fact employees are older, with the region not moving as fast as London is at moving into "new" sub-sectors like fintech or cybersecurity. Large companies such as Huawei, Vodafone, Oracle, Microsoft, Telefonica and Hewlett Packard Enterprise dominate employment in the region, employing 62% of all tech workers in the Thames Valley, with many of these companies based in the local regional hub of Reading.
The report, with profiles of more cities in the different clusters and information on exactly what criteria was used to rank each cluster, is available to read at CBRE's website.