Bengaluru Techies Get Paid the Least in Comparison to Top 20 Startup Ecosystems Globally

March 28, 20172:43 pm419 views

Bengaluru is the only city in India to rank among the top 20 start-up hotbeds; however the software engineers from the city are the cheapest labour among the start-up ecosystems globally. The cheapest average annual salary of a software engineer in Bengaluru is $8,600, which is 13 times lower than the highest average annual salary of software engineers in Silicon Valley, California which is $112,000.

This startling fact was brought to light in the 2017 Global Startup Ecosystem Report released earlier this month. While the salary facts are disappointing, this is one of the primary reasons why majority of U.S start-ups move to the city, to be able to source software talent at cheaper rates, reported.

Another reason why start-ups move to Bengaluru is because it is easier to find good technical employees, however, there are difficulties around access and quality.

The top 20 startup ecosystems have been ranked on the basis of five parameters – performance, funding, market reach, talent, and start-up experience. Of the total number of start-ups, nine are located in North America, six in Europe and five in Asia.

Bangalore confirms its position as the country’s leading startup hub, yet it drops in the global Index from rank 15 to 20. The statistics are still impressive for the most part, not only with regards to the latest estimation of 1,800-2,300 active tech startups.

The city is a magnet for Indian talent, with millions migrating to the city for work, many of them highly-skilled tech workers. In fact, Bangalore has, on average, the youngest tech workers among all start-up ecosystems. This influx of youthful talent has helped drive the start-up surge.

Almost 45 percent of Bengaluru’s start-up founders have gained at least 2 years of prior work experience in a start-up, placing the ecosystem in the upper third globally, close to Silicon Valley at 49 percent and Tel Aviv at 55 percent. 94 percent of founders from Bengaluru have a technical background, the highest rate in the world.

See: Capgemini to Increase its Headcount in India to touch 1-lakh by April 2017

Average annual salary of software engineers in the top 20 global start-up ecosystems.

USA: $112000
New York: $97000
London: $52000
Beijing: $25000
Boston: $95000
Tel Aviv: $63000
Berlin: $55000
Shanghai: $22000
Los Angeles: $84000
Seattle: $100000
Paris: $46000
Singapore: $35000
Austin: $82000
Stockholm: $55000
Vancouver: $55000
Toronto-Waterloo: $56000
Sydney: $64000
Chicago: $76000
Amsterdam: $45000
Bengaluru: $8.600

For the above survey findings, 55 start-up ecosystems across 28 countries were assessed of which, ranked the top 20. While every ecosystem enjoyed improvement in at least one dimension of their ecosystem, several places stand out for particularly strong growth.

Within the top 20 ecosystems, Singapore ranked ahead of Silicon Valley but trailed below the average top 20 at 10th place in Talent Quality. Singapore has the fourth and second best ecosystem for start-ups to access experienced software engineers and growth employees. However, this growing region in Asia has a surprisingly low level of start-up attraction, but a competitive level of entrepreneur attraction.

The biggest upward movement was Stockholm, which entered the top 20 with an impressive 14th place, thanks to high market reach and amazing ability to create unicorns despite its small size. London moved up to the number three overall rank, and Vancouver moved up three spots to the 15th spot. Two Chinese cities, Beijing and Shanghai, were assessed for the first time and took the 4th and 8th position respectively.

A noteworthy fact from the findings state, advisors are most heavily used by start-ups in Asia-Pacific ecosystems. Start-ups in the Asia-Pacific region have 48 percent more advisors with equity than the rest of the world.

The report states, “In the Talent Index, Bangalore has challenges with Access and Quality—engineers haven’t been hired very quickly, experience is average and visa success is low—but the bang for the buck is still hard to beat, as Bangalore’s engineers are the most cost-efficient among the global top 20.”

Also read: Increased Hiring Demand for Senior Professionals in India in 2017

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