Scottish cities confirmed as UK’s top digital destinations
A major new report by commercial property consultancy CBRE asserts Scotland’s strengths as a leading technology sector destination, with the country’s two principal cities ranked second and third in the UK outside London.
Published today, CBRE’S ‘Tech Cities’ report ranks the top UK locations for tech businesses.
Following an inaugural CBRE study in 2017, and using the same methodology to analyse data on 65 cities throughout the UK, the new report provides an update on the top 25 locations for companies in the tech sector. All markets were scored and ranked according to a wide range of locational pull factors for tech businesses, such as level of education, concentrations of tech businesses and employment, cost of living, cost of office space and wage levels.
The report highlights various shifts in the cities’ tech and creative industries profiles over the last two years, with Glasgow climbing three places to become the UK’s second top tech destination outside London, and Edinburgh maintaining its third place position.
CBRE Scotland Chairman Doug Smith said: “The fact that Scotland’s two principal cities are ranked so highly in the UK outside London is an incredibly positive story. The digital tech sector added £14bn to the UK economy in 2018, up 8% since 2016, and the sector is growing three times faster than the rest of the economy. The creative industries sector - which encompasses businesses from tech to media and telecoms - is therefore fundamental to the future success of Scotland.”
Scottish Government Minister for Public Finance and Digital Economy, Kate Forbes MSP, said: “It is great to see Glasgow and Edinburgh once again recognised as powerful twin centres for tech investment in the UK. With only 45 minutes between these two complementary cities, they have rightly established themselves at the vanguard of gaming, cloud computing, biotech, cyber security and data-led solutions. Their combined strength in universities, research and talent markets should see them stay at the peak of this CBRE index for years to come.
“The Scottish Government and our enterprise and skills agencies will continue to do all we can to support these cities and the companies who choose them to remain at the cutting edge of digital development.”
Factors contributing to the very strong rankings scored by both Glasgow and Edinburgh are highlighted in the report. These include high concentrations of tech businesses and tech professionals, generational diversity and a strong creative arts legacy. The two cities are also advantaged by high levels of educational attainment and access to a number of world-class universities, with strong research and computer science degree rankings.
Key findings include:
- For computer science degrees, Glasgow ranks joint first with Manchester and Edinburgh is very high too, in fifth position
- Both cities have high numbers of Information & Communications SMEs (Edinburgh fifth highest and Glasgow seventh out of 65) and high numbers of people employed in the sector (Glasgow is fifth highest and Edinburgh eighth out of 65)
- Both cities have a large ratio of millennials (Edinburgh 28.5 per cent and Glasgow 24.2 per cent of the population) and a high proportion of the population qualified to NVQ 4 or above (Glasgow ranks third and Edinburgh fifth out of 65)
Commenting on Glasgow being named the UK’s second top tech city outside London, Andy Cunningham, Senior Director, CBRE, said: “It’s a real coup for the city but - as it’s home to some of the world’s most creative and talented engineers, architects and designers, and is now attracting a new generation of innovative tech start-ups with a strong focus on data science – it’s no real surprise.
“We tend to think of Glasgow’s tech industry being focused along traditional sectors like banking, finance and insurance however, it’s pleasing to see other growth sectors operating at the cutting edge of alternative disciplines including biotechnology, artificial intelligence, space science, financial technology and computer games technology.”
Referring to Edinburgh’s success in attracting tech businesses and investment, Stewart Taylor, Head of CBRE Advisory & Transaction Services, said: “The diversification of Edinburgh’s occupier market away from its traditional pre-Crash financial core is a success story of its own. However, the city must not take its eye off the ball. While Edinburgh ticks many of the boxes that attract tech businesses, such as the availability of an educated labour force, the proximity advantages of a big city – the sharing of information and innovation, access for employees to leisure activities, their peer group and career opportunities and a lower cost base than the south-east of the country, Edinburgh’s attractiveness should not be taken for granted.
“The report also highlights a narrowing gap between the top cities and particularly for the smaller occupiers, a focus on costs and a desire for flexible space. With office supply at a decade low and the flexible provision less than in other regional cities, the competition to attract and retain tech occupiers is going to get harder.”
Scottish Enterprise managing director of international economic development Paul Lewis said: “It’s very encouraging to see both Edinburgh and Glasgow feature in the top three of CBRE’s UK Tech Cities report – the findings of this research help validate Scotland’s position as a tech nation and the data capital of Europe. In recent years we, and our partners, have been investing to build Scotland’s competitive advantage in data science and technology and as a result we continue to see substantial growth in our indigenous tech companies and many inward investors arrive to our burgeoning tech cluster.”