Bangalore, Singapore, and Shenzhen are named to be the best locations in Asia where tech enterprises can bloom and expand their businesses.
According to recent study by Colliers International, these cities stand out as top choices for tech operations among 16 cities in developed and emerging markets across Asia. Socio-economic, property and human factors were among the 50 measures used to determine the viability of these cities as tech hubs as a workability index for the tech sector.
Colliers’ Asia Head of Research Andrew Haskins said, “Modest long-run growth prospects hold down developed cities like Tokyo and Taipei for the sector. While emerging cities offer high growth potential and low operating costs, they tend to score lower on employment criteria and human aspirational metrics.”
Bangalore occupied the first position in the “Top Locations” with 68 percent score. Having great socio-economic as well as wide and deep talent pool, the city is expected to be the fastest-growing city in Asia over the next five to ten years. Bangalore also boasted the largest stock of Grade A office space in Asia after Tokyo, low staff costs and office rents, and low cost of living. However, the study noted that the city scored less when it comes to the quality of office accommodation and quality of infrastructure.
Singapore came in second place with 63 percent score. The study found that it has high socio-economic index due to its strong talent pool, personal tax rate, as well as safety and living quality. Singapore is expected to continue to benefit from its position as a well-connected financial and communications hub for South East Asia and APAC operations.
Shenzhen followed in the third position with 61 percent score. With heavy investment in R&D, the city currently reigns as China’s technology capital that goes beyond hardware manufacturing center. The study highlighted Shenzhen’s moderate staff costs, ample office stock, flexible workspace, and planned new supply as the biggest property factors that make it favourable as location to start a tech firm. Additionally, Shenzhen has also surpassed Hong Kong by GDP and is expected to benefit further from closer integration of the Greater Bay Area hubs.
“Acquiring talent is a key challenge for tech firms in Asia. Talent is concentrated in specific markets, notably Chindia (China and India), which also offer high growth. To retain talent, tech firms need to move toward the CBD or CBD fringe. Additionally, artificial intelligence (AI) threatens demand for workforce space, but drives productivity growth and returns. These conclusions led us to weigh growth and availability of talent highly in our “Top Locations” scoring,” Mr. Haskins explained.
Commenting on the research findings, Colliers’ Head of Research for Singapore Tricia Song said, “The Singapore Government launched the Smart Nation initiative in late-2014 to spur the pervasive adoption of digital and smart technologies across the country. Nearly four years on, the move has gained traction not just among Singapore’s population, but also large and small businesses as well as within the public sector. As Singapore continues to transform into an innovation-led, high-tech economy, it will remain a compelling business destination for global technology firms. We believe it presents lots of upside potential for the real estate sector, particularly the office space and high-specification industrial space, such as data centres.”
According to Colliers’ study, Singapore’s leading position on socio-economic factors (35.6 percent) has helped to mitigate its relatively average score on the property (13.6 percent) metric, which was held back by the limited total prime grade office stock.
The city-state came out top in Asia as a source of talent, reflecting the strength of the country’s educational and research facilities and their perceived international outlook. In addition, it also ranked first overall on employment considerations: political stability, ease of doing business, corporate tax rate, city infrastructure and English language capability.
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