National, 23 July 2021: COVID-19 has rapidly accelerated new ways of working, but the world’s ‘technology hubs’ are here to stay although they may not be in Silicon Valley, according to KPMG’s annual report “Technology innovation hubs”. When many offices and downtown areas locked down early in 2020, entire workforces shifted to remote-working, with some employees leaving major cities to find more space at a lower cost, among other factors. But tech leaders believe the industry’s future success will rely on a balance between physical workspace and greater flexibility.
The 2021 Technology Innovation Hubs report, now in its ninth year, focuses on the locations that are seen as leading technology innovation. It provides insights on what executives and venture capitalists should consider when selecting and investing in technology centers, seeking to acquire a company, entering a joint venture, expanding operations, building a new office or innovation center, or developing a new workforce model. More than 800 industry leaders were surveyed for the latest Survey. 39 per cent believe ‘hub’ cities including London, Singapore, and Tel Aviv will continue to play a vital role, enabling talent to coalesce and collaborate in communities with a solid digital infrastructure. Only 22 per cent believe hubs are no longer important.
Key takeaways from the report findings:
Almost twice as many global technology company leaders believe that hubs are still important in driving technology innovation as opposed to those who believe they are not.
78 per cent say they will not be downsizing their physical footprint.
Only 26 per cent expect to hire predominantly remote talent
Sixty-one per cent say the pandemic has changed their opinion of which cities will become leading technology innovation hubs
One third feel that Silicon Valley will maintain its innovation leadership while an equal number feel it will not.
Alex Holt, Global Head of Technology, Media and Telecommunications at KPMG, said “The success of the technology sector has outpaced most other industries during COVID-19, with many companies growing significantly since the start of the pandemic. This has advanced the perception that creativity and innovation can now happen literally anywhere as collaboration has gone more virtual and more global. However, a company still needs to be able to innovate, and the KPMG Technology Innovation Hubs report reveals that physical workplaces and innovation hubs remain a key component of technology companies’ strategies, although they may not be located around Silicon Valley.
“Engineering talent and intellectual property are the lifeblood of the tech industry, and retaining top talent is a strategic imperative. Employers know this and are striving towards flexible work arrangements, including permanent hybrid workforce models. As the workforce disperses geographically, new hotbeds of technically skilled workers will emerge.”
Industry insiders were also asked to rank cities around the world, outside of Silicon Valley, that they believe will flourish as technology innovation hubs in the next four years. The cities making the top 10 all had strong ecosystems in place before the pandemic, enabling them to emerge stronger – and potentially provide a real challenge to Silicon Valley – as the world prepares for a post-COVID recovery.
Bengaluru was ranked at 8th position among the top 10 cities. India was ranked 3rd in the list of countries and jurisdictions that show the most promise for developing disruptive technologies.
Satya Easwaran, Partner and Head- Technology, Media and Telecom, KPMG in India said, “India’s presence among the top 3 countries, for the 2nd successive year, for promoting disruptive technologies proves the nation’s tremendous emphasis on developing well-organised technology hubs for fostering all-round economic growth. Despite the pandemic, India’s silicon valley – Bengaluru has been ranked 8th in the list of top ten world-class tech hubs. The well-structured infrastructure and resources machinery of the city has enabled many global tech corporations to operate smoothly from the city. Apart from talent and investment, Bengaluru is also known for accelerators and incubators to help tech companies at every level of their growth story. I am confident that, in coming years, Bengaluru will further establish itself as a key tech hub globally.”
Respondents prioritise the following factors as crucial for the long-term viability of a technology hub that springs up.
Urban locale that attracts young professionals
A pipeline of skilled talent
Modern infrastructure, including high-speed bandwidth
At least one research-intensive university
Positive demographic growth trends