Update: This article was picked up by USA Today
What is it about Silicon Valley that makes it an innovation hub? One pillar upon which Silicon Valley stands is its immigrants. Last year, 37 percent of Silicon Valley’s population were immigrants. And that’s just the general public. When you zero in on people between the ages of 25 – 44 who have “Computer and Mathematical” jobs, the percentage skyrockets to 74 percent.
But even Silicon Valley is so desperate for talent, it’s a breeding ground for poaching wars.
Today the Trump Administration is aiming to tighten the belt on immigration. Regardless of where you stand on these policies, companies need to plan ahead for global engineering growth.
Choose your preferences for 9 factors, including salary, taxes, talent pool and more to find out which locations are best for your next engineering office.
To begin our analysis, we honed in on 28 major global tech hubs based on the Thomson Reuters report, corroborated with the global startup ecosystem report, both of which were published within the last two years. We fleshed out each country’s details across nine factors from various sources.
To rank countries, we standardized the scores for each criteria using this calculation:
We then converted these z-scores into a 1-100 scale for easy interpretation.
Of course, every company has its deal breakers. Large companies like Google or Facebook might care less about cost than a startup. Smaller, more agile companies may prioritize cost-effectiveness and skill level to hire developers who can start coding on day one. If you’re anticipating overseas collaboration, then low corruption levels and language barriers could take priority.
Here’s a full color coded snapshot of each country’s ranking by criteria. For an easier interpretation of this data, try our interactive map that allows you to choose weightage for each factor.
Singapore is having a tech moment. It not only topped our list but also this year’s list of the best places for tech talent by the Startup Institute. It seems the Singaporean government’s $19B R&D investment to build its local engineering ecosystem may pay off. Some of these reasons could also be why all of the top tech companies (Twitter, LinkedIn & Facebook) all have regional offices in Singapore. And, although King Google is everywhere, it just expanded its Singapore office to 1,000 engineers late last year.
Poland, the birthland of Marie Curie and Copernicus, is no stranger to pioneering innovation. And now it’s well-positioned to grow a sprawling incubator for software, especially for forward-thinking financial services companies. In a post-Brexit world, both Goldman Sachs and JPMorgan Chase, for instance, are considering moving hundreds to thousands of jobs to Poland this year. For candidates, these majestic European cities enjoy a lower cost of living than many traditional major tech hubs.
Dr. Heraldo Memelli, who was born in Albania and manages all HackerRank technical challenges in Palo Alto, says: “Many Eastern European countries have a convoluted past, but there’s a young generation of talented people eager to innovate transformative technology.”
Philippines stands out for having among the lowest cost for talent, though the skill level is also low. Given that its substantial talent pool of over 130,000 IT grads annually (compared to roughly 200,000 in India), there is a big opportunity for the Philippines to invest in its tech talent through better training and education.
In fact, this is exactly what Google is doing. It just announced a grant for a digital literacy program in late March 2017. The Philippines may have a long way to go, but it’s worth keeping a pulse on its potential to become a strong tech hub.
The UK stands out with the most number of startups competing for talent. London has long been the go-to place for opening up a tech hub, given the sheer size of startups and talent pool.
But Finland, Ireland and Netherlands outrank UK because of lower salaries, taxes, rent and higher skill index. Both Ireland and Netherlands’ proximity to UK talent is a plus as well.
Finland is home of multi-billion dollar fashion company Zalando’s second international office, for instance. Likewise, Facebook recently announced a new office in Ireland as the newest partner centre outside of Menlo Park. Uber also made an interesting choice by choosing Amsterdam in the Netherlands as its International engineering HQ back at the end of 2014.
Its department head Jelle Prins told Startup Juncture that a lot of talented developers find it really hard to get a Visa in the U.S. “In contrast developers from across Europe can decide to work in Amsterdam without any formalities.” It must be going well — they’re doubling down from 400 to 1,000 people this year.
What if you only care about the talent pool, ease of team collaboration or cost? Here’s a closer look at the best and worst countries (from our list of 28 hubs):
Now, let’s spin our globe to the right, and zoom into the original tech mecca: Silicon Valley. We took our rankings and added two additional key factors: time zone (to minimize 6 AM wake up calls!) and ability to travel without a Visa from the US.
This helps us determine: If you’re on the West Coast and looking to build out a new office globally, where should you expand?
New Zealand may be 19 hours ahead, but your Kiwi coworkers can have breakfast while you have lunch…technically. Canada’s time zone is smooth sailing for California. Mexico climbs up for the same reason. Even with the added time difference and Visa restrictions, many Eastern European countries cling to the top 10 spots.
Folks experienced with expanding engineering teams have seen a shift in perception when it comes to the best locations. Jens Brinksten, CEO of KMD Poland, has launched companies in 16 countries worldwide and seen many companies who started in India, but moved their development to East and Central Europe:
“The argument is [in India], there’s lower productivity, too much time spent on knowledge transfer, high travel costs, difficult communication, etc.,” he says. “Even if the cost for one “productive quality hour” means that you need to pay for 4 hours development, then the advantage of price is gone.”
Most news reports highlight thriving, large metros like London, Tel Aviv and Berlin as the next big tech capital. While this is true, such vibrante cities are not the end-all, be-all for enterprises looking to expand.
For European expansion, if you’re looking for a more affordable, high-quality and quantity of talent, you’d do well expanding in places like Poland, Finland and Netherlands. These countries have the benefit of lower taxes, more affordable living and, the latter two countries, are extremely close to the large talent pools in the UK.
In Asia, when all things considered, Singapore, Taiwan and Hong Kong could pay more dividends than the long-standing Bangalore and Shenzhen hubs.
Above all, one thing’s for certain: Technology hubs are popping up all over the world. Our hope is this resource helps you find them.
Enjoy our post? Subscribe to the HackerRank Blog Newsletter to get insightful posts on developer hiring.
If you were to expand your engineering office worldwide, where would you go?