Hong Kong is Wild Card for Tech Startups, Meanwhile Shenzhen and Beijing Tops the Listby Company Announcement September 19, 2018
Colliers released its latest research report Top Locations in Asia’s Technology sector.
The report, based on a comprehensive study of 16 cities in developed and emerging markets across Asia, examines nearly 50 criteria across a spectrum of socio-economic, property and human factors to determine the viability of these cities as tech hubs as a workability index for the tech sector.
Andrew Haskins, Colliers’ Asia Head of Research, commented:
“Launched this year to support the rapidly growing tech sector in Asia, this new study builds on Colliers’ earlier “Tech Trends in Asia” research by recommending the best urban locations for technology firms. Bangalore, Singapore and Shenzhen stand out as top choices for starting or expanding technology operations in Asia.
Modest long-run growth prospects hold down developed cities like Tokyo and Taipei for the sector. While emerging cities offer high growth potential and low operating costs, they tend to score lower on employment criteria and human aspirational metrics.”
Tricia Song, Head of Research for Singapore, said:
“The Singapore Government launched the Smart Nation initiative in late-2014 to spur the pervasive adoption of digital and smart technologies across the country. Nearly four years on, the move has gained traction not just among Singapore’s population, but also large and small businesses as well as within the public sector.
As Singapore continues to transform into an innovation-led, high-tech economy, it will remain a compelling business destination for global technology firms. We believe it presents lots of upside potential for the real estate sector, particularly the office space and high-specification industrial space, such as data centres.”
Tech Trends in Asia
“Acquiring talent is a key challenge for tech firms in Asia. Talent is concentrated in specific markets, notably Chindia (China and India), which also offer high growth. To retain talent, tech firms need to move toward the CBD or CBD fringe. Additionally, artificial intelligence (AI) threatens demand for workforce space, but drives productivity growth and returns. These conclusions led us to weigh growth and availability of talent highly in our “Top Locations” scoring,”
Mr. Haskins explained.
Top Locations for Tech Firms
Bangalore’s (Score: 68%; Position: #1) greatest strengths are socio-economic, set to be the fastest-growing city in Asia over the next five to 10 years, and benefits from a wide and deep talent pool. Bangalore also boasts the largest stock of Grade A office space in Asia after Tokyo, low staff costs and office rents, and low cost of living. However, the city scores less well on quality of office accommodation and quality of infrastructure.
Singapore (Score: 63%; Position: #2) comes in second place as it scores highly on the socio-economic index, due largely to its strong talent pool, and on aspirational measures including personal tax rate, safety and living quality. Singapore is expected to continue to benefit from its position as a well-connected financial and communications hub for South East Asia and APAC operations.
Shenzhen’s (Score: 61%; Position: #3) high ranking comes as no surprise as it currently reigns as China’s technology capital. Heavy investment in R&D has broadened the city’s tech base far beyond hardware manufacturing. Shenzhen scores highly on property factors due to moderate staff costs, ample office stock, flexible workspace, and planned new supply. Shenzhen has also surpassed Hong Kong by GDP and is expected to benefit further from closer integration of the Greater Bay Area hubs.
Alternative Tech Locations
Beijing (Score: 60%; Position: #4) scores highly on economic scale and growth potential and is known for its abundance in talent. Staff costs are moderate despite CBD rents being the highest in China. The city is well-placed to strengthen its position as a leading centre of Artificial Intelligence.
Hyderabad (Score: 59%; Position: #7) ranks highly on growth potential like all Indian cities, but lower on other socio-economic factors and does not match Bangalore as a source of talent. However, tax rates and cost of living are low and the city scores better than many other Indian cities on human factors.
Wild Card Tech Location
Hong Kong (Score: 59%; Position: #8) is not typically viewed as an innovation hub for tech occupiers; however, Hong Kong is becoming more appealing for several reasons which include connectivity with Shenzhen and South China, recent expansion in Hong Kong by big tech firms such as Facebook and Alibaba, and accelerating investment in Fintech in the city.
Singapore: Second best location in Asia for tech firms
According to Colliers’ study, Singapore’s leading position on socio-economic factors (35.6%) has helped to mitigate its relatively average score on the property (13.6%) metric, which was held back by the limited total prime grade office stock.
The city-state came out top in Asia as a source of talent, reflecting the strength of the country’s educational and research facilities and their perceived international outlook. In addition, it also ranked first overall on employment considerations: political stability, ease of doing business, corporate tax rate, city infrastructure and English language capability.
You can download the full ranking here