What Makes Bengaluru, Singapore and Shenzhen Top Locations in Asia for Starting Tech Operations
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Identifying the right location for a business can be a game changer. The affordability, the political climate of the city, the quality of city infrastructure, and the availability of talent are just some of the things that need to be considered before starting operations.
Taking these and some more aspects into consideration, property consultant Colliers International has released a report, titled “Top Locations in Asia: Technology sector”. Bengaluru (earlier known as Bangalore), the report says, is the best location in Asia for starting or expanding technology operations, followed by Singapore and Shenzhen.
“Popularly known as the Silicon Valley of India, Bengaluru has been chosen as the No. 1 choice in Asia for technology occupiers,” the report says.
Beijing, Shanghai, Seoul, Hyderabad, Hong Kong, Manila, Mumbai, Delhi NCR, Guangzhou, Tokyo, Jakarta, Taipei and Chengdu make the rest of the list.
For the report, Colliers tracked 16 cities in developed and emerging markets across Asia, and examined them on the basis of the following factors: socio-economic, property and human. These three were broken down into seven sub-categories (economic output, employment considerations, workforce orientation, availability of talent, employer office costs, office accommodation, and employee aspirational metrics), which, in turn, included nearly 50 measures relevant tothe choice of location. A score on each measure was assigned and combined to a total score out of 100.
Bengaluru was on 68 per cent, Singapore on 63per cent and Shenzhen on 61 per cent. “In general, Indian cities and South East Asian emerging cities like Jakarta benefit from high economic growth and low employment and living costs, but achieve poor scores on employment considerations and human aspirational metrics. Hyderabad scores better than most other emerging cities on human factors such as quality of living, air pollution, and traffic levels,” the report says.
For Bengaluru, the report says, the estimated average real GDP growth is 9.6 per cent over the next five years. The greatest strengths for the Indian tech hub are socioeconomic. “The city looks set to be the fastest growing in Asia over the next five and perhaps the next ten years, and it benefits from a wide and deep talent pool,” it adds. Other advantages of Bengaluru include the largest stock of Grade A office space in Asia after Tokyo, low employer costs (reflecting moderate staff costs and office rents), and a low cost of living. The report points out that Bengaluru scores “less well” on measures of quality of office accommodation and quality of infrastructure.
Second in Command
Among the 16 cities, Singapore was No.1 for talent and employment criteria. Singapore’s second place reflects the city’s high score on socio-economic factors, due to its strong reputation as a source of talent, as well as a high position on aspirational measures such as personal tax rate, safety and lining quality. “Looking ahead, Singapore should continue to benefit from its position as the natural financial and communications hub of South East Asia, and from the government-supported transition to the so-called Fourth Industrial Revolution,” says the report, which envisages supply of business park and high specification industrial space doubling by 2030.
Dedicated investment in R&D has expanded Shenzhen’s technology base beyond originally dominant hardware manufacturing, says the report. “Heavy investment in Shenzhen scores well on property factors, due to moderate employer costs, ample availability of office stock and flexible workspace, and planned new supply,” it adds. The Chinese city has overtaken Hong Kong by GDP and should benefit over time from closer integration of the Greater Bay Area, it point out. “New development of the Qianhai district and the large-scale renewal of the Luohu district are additional strengths.”