Amsterdam leads European cities as destination for tech occupiers

Amsterdam is home to a growing number of both multinational and home-grown tech companies, so much so that it out-performs cities several times its size as a tech destination.

Savills Tech Cities 2017 programme ranks Amsterdam fifth out of the 22 cities based on its strong transport links to other business hubs, its highly skilled workforce where English is widely spoken, and the quality of life on offer as it is both a ‘healthy’ city with low pollution and crime rates and also has an attractive cultural, social and entertainment offer.  These lifestyle factors are increasingly important to occupiers as the young tech workers they’re looking to attract tend to favour cities that offer them a good work/life balance and an environment that enhances their wellbeing.  

Amsterdam ranks above much larger cities such as Boston, Hong Kong and Singapore and also its mainland European rivals such as Copenhagen, Berlin and Stockholm. These European cities, however, do have lower real estate costs than Amsterdam: the cost of renting commercial property for ‘scale up’ and established tech companies and the cost of renting residential property for employees is cheaper, so these locations could prove more attractive than Amsterdam to companies who are very cost conscious. On the other hand however, the Netherlands has a very attractive tax system, with one of the most extensive tax treaty networks in the world. 

To move up the overall Savills Tech Cities rankings Amsterdam needs to concentrate on developing its ‘tech environment’, which at the moment is solid but not outstanding. For instance, average broadband download speeds are only 8.6 MB per second, compared to the average of 19.4 MB per second across all 22 cities. Amsterdam should concentrate on improving its digital infrastructure and broadband networks. The cities that hold first, second and third place in Tech Cities – Austin, San Francisco and New York - are all cities that perform very strongly for tech environment and offer lessons Amsterdam could learn from in this regard.

The prospects for Amsterdam in this regard are nevertheless positive: the number of data centres in the Netherlands is growing, especially in the Amsterdam area. The city is also home to the Amsterdam Internet Exchange (AMS-IX), which is one of the largest internet hubs in the world.

Amsterdam is already a major global hub for tech companies and given these further positive signs it looks like it is on track to continue to compete with cities which are much larger than it.

Savills investigated and compared 22 cities across the world at the forefront of the global tech industry in its ‘Tech Cities 2017’ report. The results can be found on the online and interactive platform www.savills.co.uk/tech-cities/.