Jeremy Bates, head of occupational markets EMEA, Savills, adds: “While the global tech sector is undergoing a period of consolidation and ‘right sizing’ in some organisations, long-term tech as an occupier group isn’t going anywhere; vast numbers of people continue to be employed by it globally and many organisations are still growing. While the big Tech Cities retain many advantages and their enduring appeal to tech occupiers, it’s interesting that some smaller cities are shining in distinctive areas and are quickly growing their ecosystems and talent pools to support growth. These specialist tech companies need a diverse range of real estate as they grow, but in spite of lower office utilisation and consolidation, prime office rents in many locations remain stable as companies search for the best quality, most sustainable spaces, which are undersupplied in many markets.”

North American cities take 16 places in Savills overall ranking of the world’s Tech Cities, followed by China, which has six cities in the top 30, led by Beijing (4th) and Shanghai (7th). Attracting by far the most VC in Europe across a wide range of tech sectors, London ranks 5th globally, ahead of Paris in 9th and Berlin in 19th.

“Tech today permeates everything, and tech niches such as HealthTech, FoodTech and ClimateTech are transforming our lives and tackling some of our biggest challenges”, says Paul Tostevin, Savills World Research Director and Tech Cities project lead. He continues: “While the factors that make the big Tech Cities perform well, such as the depth of their talent pools and the weight of money flowing into them, are enough to keep them at the top of our Index, in some of our tech sub-sectors they are bested by much smaller rivals which have become hubs for these dynamic sectors. If you’re a founder with a great idea in one of these areas you therefore potentially have a choice to make: head for a big ‘generalist’ Tech City which offers a broad base of everything you may need but higher property costs, or choose a specialist location in your sub-sector for really targeted knowledge and talent to super-charge growth in your area, while also offering a better quality of life, but knowing that it may not provide the same opportunities for your business once you get to a certain point in development.”

For companies that want to locate within the cities at the top of the overall combined Tech Cities index, that move will come at a cost for both the company choosing to lease top-quality space and for its workers, says Savills. Second-place tech city New York, for example, has the second most expensive office rents and highest-cost apartment rents of the top ranked cities (see chart below). The international real estate advisor says that rising Tech Cities such as Houston, Raleigh-Durham, Bristol and Tallinn have lower costs which can make them more appealing for tech workers, especially those who can work from anywhere and choose to take advantage of these lower costs. These markets may also appeal to tech companies looking to take lower-cost office space.