Savills: New York is new top tech city

New York has ascended to the top of Savills Tech Cities Index (TCI), pushing San Francisco to second place, while five cities from mainland China have joined the 30 for the first time.

The TCI, which measures what makes a successful tech and start-up city, comprises more than 100 individual metrics grouped into six categories weighted to reflect the relevance to the tech sector, namely business environment, tech environment, city buzz, wellness, talent pool and real estate costs.

New York has affirmed its position as the global leader due to access to a deep talent pool and the city’s reputation as a global centre of commerce.

Chinese Tech Cities, including Shanghai, Shenzhen and Hangzhou, have risen rapidly and now account for a higher share of venture capital (VC) investment than their US counterparts; Beijing recorded an average of $34bn of annual VC investment in the past three years, surpassing both New York and San Francisco.

Mobility was added as a category in this year’s index, because Tech Cities are often testbeds for transportation innovation. Chinese cities also emerged as leaders in shared mobility services, while London ranked first overall for mobility, due to transport innovations and an urban form conducive to cycling and walking.

London held the number one spot for European Tech Cities, followed by Amsterdam and Stockholm. London produced more unicorns (private companies valued above $1bn) and attracted more FDI than any other city in 2018, according to investment advisory firm GP Bullhound.

The potential economic benefits of becoming a tech hub are vast: GDP is forecast to rise by 36% across the 30 Tech Cities in the next decade, compared with a rate of 19% across other developed cities.

Flexible office space has expanded in line with the growth of the global tech sector, as the number of greenfield FDI projects worldwide including the keyword “co-working” rose year-on-year by 163% in 2017, and 71.9% in 2018, reports fDi Markets, a data service from the Financial Times. Indeed, eight out of the top 10 cities in terms of co-working projects are present on the TCI.

San Francisco had the most expensive average co-working-cost for a desk in a private office at $1050, compared with an average of $590.