Europe’s No. 1 Tech City – and it’s not London!

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This title of Europe’s no.1 tech city is bandied about with varying interpretations of what makes a tech city ‘the best’.

Is it availability of venture capital?

Is it the size of the startup ecosystem?

Is it infrastructure, government support, ease of setting up a business and taxes?

Our perspective is that all of these valid contributory factors are moot if you don’t have the one underlying commodity without which no tech company can survive..TALENT..and ‘especially’ programming talent.

While we can examine certain pros and cons in each city, the availability of programming talent will increasingly become the differentiating factor between both.

Both cities’ tech talent pools are underpinned by the availability and future supply of ‘non-domestic’ talent. Primarily, developers who have relocated to the UK or Germany from other European markets.

The location that can best guarantee an available pipeline of programming talent for its respective ‘tech ecosystem’ will thrive. The location that can’t will enter a period of decline and forced offshoring of key functions.

So, the reality on the ground now is that European developers, who are willing to consider relocation opportunities outside of their home market, are increasingly willing to select Berlin above London.

Berlin is definitely winning….why?

 

# 1.Geography

Unfortunately, there is not much London can do about being located on an island off the North-Western European plain.

The psychology for developers considering relocation is significant. A Polish or Czech developer can pack their bags and drive 3 hours from Wroclaw or Prague and arrive in Berlin. Proximity to home is a huge factor in deciding on relocating and Berlin is located in the heart of Europe.

# 2.Cost of Living/Salary Levels

Gross salary levels on offer to developers in London (ie GBP 50-60k for a 5yr experienced Java developer) are still higher than that on offer in Berlin ‘but’ a) Berlin is still a much cheaper place to live and b) the weakening Pound has eradicated much of that salary differential

# 3.Brexit

Now, it’s easy to argue that no-one really knows the outcome from the negotiated exit, however, jobseekers will be making their own decisions right now, based on the level of uncertainty they feel or face.  The UK is already witnessing an increasing number of migrant workers choosing other destinations for roles which would otherwise have been inundated with applicants (hospitality, seasonal roles).

Two elements to consider:

a) The ‘how can I consider moving to the UK now if I don’t know what my status will be in 1-2 years’ question – at Source-Code we hear this every day from European developers contemplating roles in London. The impact is this, younger / single developers are significantly more willing to consider an opportunity in London than more experienced / married developers who aren’t prepared to ‘take a risk’ and relocate with dependents to the UK currently

b) EUR / GBP – the approx. 20% drop in the value of the Pound has the simple and direct impact of a 20% decrease in the value of London based salary offers to Eurozone based developers

# 4.(non-EU) Visa process

This is arguably the most important factor driving and supporting Berlin’s pool of programming talent – visas!

The majority of German tech companies avail of the relatively simple process to acquire visas for non-EU based developers. As such, Berlin is sucking up Europe’s top developers from Ukraine, Russia, Serbia & Belarus and plugging their requirement gaps with this talent.

The UK, due to the visa system in place, is effectively locked out of this talent pool which represents among the best developers in the world.

# 5.English speaking work environments

In years gone by, one great selling point that the London and Dublin tech scenes could use to incentivize Continental Europeans to relocate was the prospect of a 100% English speaking work environment. Adding fluent English to a developer’s armory is significant for their future earning power.

The reality on the ground today though is that the multi-cultural workforce in the tech ecosystems of cities such as Berlin, Barcelona and Amsterdam ensure that typically programming positions there have an ‘English’ only requirement with no need for any ability with German, Dutch, Spanish (or Catalan!) etc. required.

So – what can the UK learn…

The simple impact of these key factors is that Berlin is better positioned to nurture its rapidly growing tech ecosystem due to the significantly better pipeline of programing talent available to companies HQ’d there.

London HQ’d tech businesses increasingly have to separate themselves from their preferred structure of having their in-house developments teams located domestically.

Keeping critical IP software development local will likely continue to be a priority (regardless of cost) for many companies.

Building the rest of their in-house development capability on the Continent (be it Prague, Budapest, Lisbon, Barcelona or Krakow) will increasingly become the default option for many businesses.

If you want to learn more about building your development team in Central & Eastern contact us here: https://source-code.com/wp/contact-us/ or feel free to contact me directly at glen.farrell@source-code.com