Cape Town features among the world’s top Tech Cities according to a recent report by global property firm, Savills.
Ranked number 22 in the report, titled Tech Cities 2017, Cape Town, along with Santiago and Buenos Aires, is recognised as a major tech hub with potential as a rising global player.
The Savills Tech Cities report explains the many, diverse factors that make places a good location for the tech sector, and identifies the 22 global centres at the forefront of tech, all of which have thriving and growing tech industries, home grown start-ups and incubators, and which are at the top of global shopping lists for tech companies looking for space in which to locate.
“Cape Town is internationally acclaimed for a host of factors, not only its natural beauty and lifestyle, but also its world-class services and as a vibrant urban environment.
“According to the City of Cape Town’s Economic Performance Indicators Report, Cape Town is widely considered as a tech and e-commerce hub within South Africa and therefore an appealing destination from which to run an e-commerce business,” said Dr Andrew Golding, chief executive of the Pam Golding Property group, which is in association with Savills.
Among other factors, the cities highlighted in the report were assessed for factors such as ‘buzz and wellness’ which includes health of the urban environment, quality of parks, crime rates, healthcare, pay equality and commuting times, while ‘city buzz’ considers nightlife, entertainment and cultural offer.
Notably Cape Town features ninth on the Savills ‘buzz and wellness’ index and second on the cost of living rank – excluding property costs.
The final component of the report took into account property costs such as the cost of renting commercial property for a ‘scale-up’ and established tech company, and the cost of renting residential property for employees.
Top rated in the Savills report was the USA’s Austin as the world’s foremost ‘tech city’, offering the infrastructure, business environment, talent pool and lifestyle to make it a strong base for tech companies.
Two other US cities – San Francisco and New York – were ranked second and third respectively, followed by London in fourth position.
Access to venture capital and talent give US cities a lead over other global centres, said Savills, but Austin beats San Francisco to the top of the table because it has lower real estate costs and is so successful in attracting tech talent.
However, while US cities dominate the top of the Tech Cities rankings, the rest of the top 10 consists largely of such ‘liveable’ cities as Amsterdam, Copenhagen and Toronto, which appear above traditional established global tech rivals such as Hong Kong and Singapore.
This is due to the strong performance of these cities in terms of ‘buzz and wellness’ said Savills, with the firm noting these as factors that are likely to prove increasingly important to the tech industry in attracting future talent.
On this basis, Berlin, London and Tokyo are the highest ranking. Berlin is the only city which appears in the top five cities for all three metrics (‘buzz’, ‘wellness’ and cost of living) and ranks first.
London and Tokyo, despite having lower wellness scores, are global metropolises and therefore are boosted by their ‘buzz’.
Amsterdam is ranked fourth and Toronto fifth, after scoring highly in both ‘wellness’ and ‘buzz’ while remaining affordable locations to live. Copenhagen is ranked eleventh in the index due to its high living costs, but is notable for being the world’s foremost tech city in terms of ‘wellness’ and is therefore one to watch, said Savills.
The real estate advisor noted that given the increased focus on wellbeing among the latest generation of workers, this could come to dominate their decision-making. Cities that deliver healthier environments are therefore likely to consolidate their positions as destinations for tech talent and occupiers.
Accommodation costs – the cost of renting residential and office space per employee, per annum – stand at US$39,700 in Amsterdam, US$35,800 in Toronto, and US$33,500 in Copenhagen – half that of London, New York or San Francisco, where the same costs exceed US$65,000 per year.
Paul Tostevin, associate director, Savills World Research, said: “Smaller cities tend to fare well as ‘healthy’ cities, whilst crowded megalopolises such as London, New York and Tokyo offer a rich variety of retail, nightlife and cultural experiences which will always be attractive to some workers.
“But in the middle there are cities such as Amsterdam, Toronto and Berlin which score well on both. These cities tend to mean shorter commutes, easier access to amenities and a better work/life balance, and we suspect they may move up the rankings as they drive the economy in a digital age.”