Emerging Markets

Figure 17: Emerging Tech Talent Markets

Bucharest, Romania
Bucharest is the main technology, media and telecom hub of the country, with many major multinationals focusing on software, hardware, AI, gaming and e-commerce development. Tech companies are attracted to the market's top universities, highly skilled graduate population, zero percent income tax for IT employees and high internet speed.

Cape Town, South Africa
Cape Town has the country’s highest proportion of households with internet access, about 90%. The city also has a growing number of tech savvy individuals and institutions offering training and development, with some of its universities focusing on courses in coding and data sciences.

Cebu City, Philippines
Cebu is an upcoming tech market in the Philippines with a good university ecosystem, increasing tech industry presence and geographic connectivity within the Asia Pacific region. The city is home to several global multi-national corporations that have established digital tech outsourcing centers. Favorable labor costs and scalability are key drivers for companies looking to establish/expand their presence here.

Hanoi, Vietnam
The Vietnamese government plans to expand the digital economy to 30% of national GDP by 2030. The country has become an important global manufacturing base for high-tech companies. It is seeing an increasing number of AI, blockchain and logistics company startups. Hanoi specifically is poised for tech talent growth with a large Korean employers new R&D center opening in 2024.

Huntsville, United States
The birthplace of rocket propulsion technology that took people to the moon, Huntsville is America's "Rocket City." Most of the market's tech ecosystem remains focused on aerospace and defense. Huntsville appeals to tech talent looking for a more affordable cost of living.

Lagos, Nigeria
Lagos is home to several universities and educational institutions that produce tech graduates in computer sciences, computer engineering, data sciences and related fields, as well as an existing pool of skilled tech talent. This has attracted many global tech companies that primarily have located in Ikoyi and Victoria Islands. Other key drivers for tech companies are the high spending power in Lagos compared with the rest of Nigeria, the high population level, access to economic opportunities and smartphone adoption.

Medellin, Colombia
Medellin is establishing itself as Latin America's Silicon Valley. It appeals due to its beautiful landscape, temperate climate, affordable lifestyle and tech-friendly economy. The city's primary focus has been on attracting foreign companies and supporting talent with government-financed incubators and technical education programs.

Merida, Mexico
Merida was designated as a "smart city" in 2019 by the Mexican government due to the city's use of technology to improve quality of life. The creation of the Innovation Hub, a space for startups and to provide resources and mentorship to entrepreneurs, has also helped establish the market as a hub for tech talent.

Montevideo, Uruguay
The country's education system places an emphasis on STEM and computer science and is highly supportive of tech talent growth. The country is known in South America for its economic stability, reliable institutions, sustainability initiatives, existing tech infrastructure and cybersecurity. Most of the country's tech talent lives in the capital city of Montevideo.

Nagoya, Japan
Nagoya is repositioning itself from an auto manufacturing hub to an innovation center. Higher education initiatives have been at the center of the local government's plan to foster a culture of innovation and the city is attracting young tech companies, capital and international talent. In 2024, the city is opening Station AI, Japan's largest startup facility.

Nairobi, Kenya
Nairobi is the key Eastern African regional hub, leading with strong investment in the technology sector. It is widely referred to as the “Silicon Savannah” due to its vibrant tech ecosystem. The main factors in Nairobi's appeal to tech occupiers are business-friendly policies to attract international tech companies, a number of specialized universities and a highly skilled tech labor force. Since 2010, the country has invested in fiber optic cables to support the digital economy. Most tech companies are located in the Westlands commercial district.

Porto, Portugal
Porto has increasingly attracted expats, especially from Brazil, Italy and China, and now has more than 55,000 foreign-born inhabitants. Some are students in the city's top public and private educational institutions. The education system and foreign in-migration has created a healthy startup ecosystem and has led a number of IT companies to open offices in Porto.

Queretaro, Mexico
Queretaro has invested heavily in the tech industry and was ranked as Mexico's top state for foreign investment. Just a few hours from Mexico City by car, the market is considered an aerospace hub. It has also gained prominence as a location for data center development.

Riyadh, Saudi Arabia
Increased adoption of information technology and digitalization are key elements of the country's Vision 2030 National Transformation Program. Riyadh is developing the Cloud Computing Special Economic Zone in King Abdulaziz City for Science and Technology. This initiative has already attracted a number of global tech companies.

Seville, Spain
The city has become a major center for cybersecurity and video gaming technology. The preferred area for tech companies in Sevilla is La Cartuja Tech and Scientific Park, offering close proximity to the city center and a substantial inventory of prime buildings at competitive rents.

Tallinn, Estonia
Tallinn accounts more than 50% of Estonia’s GDP and supports a successful startup ecosystem and has good access to funding, mentorship and co-working space. The driving factors are a skilled workforce and higher education system, including Tallinn University and Tallinn University of Technology that emphasizes technology and digital skills. The city boasts a talent pool that is well-suited for tech-related roles.

Valencia, Spain
Valencia is attracting more attention from tech companies because of its high quality of life and supply of skilled talent from local universities. Most of the demand is from international companies opening their first Spanish headquarters. It is a small market with low office vacancy, which is why tech companies focus more on high quality buildings rather than on a specific area.

Wellington, New Zealand
Wellington has seen demand for tech talent grow across both public and private sectors. New Zealand's capital is known as "Silicon Welly" and has invested heavily in attracting foreign tech talent. Very good connectivity, a highly ranked university, business friendliness and high quality of life are the main drivers of growth.

Wroclaw, Poland
Wroclaw hosts over 110,000 students in engineering, IT, linguistics and other majors, with over 25,000 graduates entering the local labor market every year. The key tech subsectors are IT consulting, software, hardware, AI, gaming and e-commerce development. The city's main tech districts are the Center, Southern Axis and Western Business District submarkets.

Yerevan, Armenia
The country’s tech sector has received considerable support since the early 2000s from the Armenian government, World Bank and European Union. Much of Armenia’s tech industry remains small-scale and largely specializes in blockchain, no-code platforms, embedded software, EDA and custom software. Several local universities offer dedicated high-tech industry and data science programs and to foster partnerships with international tech companies.

Africa: Growing Tech Talent Pools Make Continent Increasingly Attractive

Tech companies have become increasingly attracted to African markets over the past decade. Africa’s strengthening economic and demographic fundamentals, combined with rising entrepreneurship, funding networks and supportive government policy, has expanded the scale and quality of its tech talent pool.

Economic and demographic trends underline the appeal. Africa’s population is expected to increase by nearly 2.3% per year over the next decade, compared with 0.7% for the Americas and 0.1% for Europe. Annual GDP growth of more than 3% is expected for Africa over this period, compared with around 1.5% for more developed regions. There are many large and fast-growing metros on the continent with deepening tech talent pools, including Lagos (Nigeria), Nairobi (Kenya), Kampala (Uganda), Addis Ababa (Ethiopia) and Cape Town (South Africa).

Rising levels of private and venture capital funding and startup activity have boosted tech ecosystem growth. Private capital fundraising has grown significantly since 2020, with concentrations in financial services and tech. There has been a focus on west Africa, with Nigeria in particular attracting growing interest. There has also been growth in startup activity, with seven companies across the continent attaining unicorn status.

Development of tech talent pools to attract foreign investment is also a major focus of public policy in several African countries looking to bolster economic development. A direct by-product of rapid growth is increased data center demand. Expansion of fiber optic networks, internet penetration, the development of e-banking, smartphone adoption and the tech skills pool are all focus areas to accelerate and strengthen growth of Africa’s tech ecosystem.

While Africa holds real promise as an emerging region for tech talent, there are also challenges and trade-offs, particularly in the areas of business operations and geopolitical risk.

The Lure of Smaller Markets: Skilled Labor Attracts Outside Investment

Tech companies are well-known for their tendency to cluster, which creates tech talent and tech industry ecosystems. They are drawn to large talent pools, premier educational and research institutions, established capital funding networks and amenity-rich cities like London, San Francisco and Singapore.

At the same time, companies in established hubs have relatively high labor and property costs, along with greater competition for tech talent. As a result, smaller markets have seen increased tech industry activity and investment. One measure of this is the number of tech companies establishing offices in new locations. In Europe and Asia-Pacific, the smaller markets of Malaga (Spain), Porto (Portugal), Riga (Latvia), Coimbatore (India), Jakarta (Indonesia) and Kuala Lumpur (Malaysia) have seen the highest proportion of tech company investment since 2003. This mimics the U.S. trend of channeling certain employee populations and growth from costly major metros like San Francisco and New York to the less costly Sun Belt markets where comparable talent is available.

For many companies, the primary consideration for location decisions is availability of skilled labor. This bodes well for certain smaller markets where tech talent pools are growing faster than in many major markets. Malaga’s working age population, for example, has grown by nearly 6% over the past 10 years versus just over 3% for Madrid.

In addition to identifying markets with a quality supply of skilled talent, numerous other factors are critical to the success of a global talent location strategy. These include labor market regulations, competitive hiring environment, adoption of remote work, geopolitical risk, financial system risk, wage inflation and language skills.

Hottest Tech Talent Skills in 2024

Attracting and retaining highly skilled tech talent has become increasingly critical for a wide range of sectors as technology’s reach further expands. Tech talent will remain the key asset for innovation and company competitiveness across industries. As traditional industries adapt to new demand patterns and technology transforms their business models and workforces, the need to win and retain skilled personnel has increased.

Rising demand for tech skills in various industries has created a significant shortage of skilled professionals. According to the Korn Ferry Institute, there will be a shortage of 4.3 million tech talent workers with an unrealized output potential of $450 billion globally by 2030.

The ongoing talent shortage requires companies to offer a compelling value proposition to attract and retain tech talent. Many companies are offering attractive compensation packages and training initiatives for their workers, as well as sourcing new talent globally via remote work arrangements.

Employers face difficulty finding qualified candidates with the right skill sets due to an ongoing shortage of tech talent in the fastest-growing fields. These include applied and generative AI, software development, machine learning, cloud and edge computing, UI/UX design, web3 (blockchain), full stack development, quantum computing, cyber security and resilience, future mobility and connectivity, and renewables and climate tech.

There is growing demand for qualified candidates with programming skills (e.g., C++, Java, Python, SQL, R language), data science skills (e.g., data processing, extraction, analysis and visualization) and cloud computing skills (e.g., SaaS, AWS, Microsoft Azure, machine learning). Skills in development, operations, administration and project management dealing with regulation, compliance, risk management and the integration of technology into companies are also in high demand.

Markets and regions with tech talent pools that offer much-needed skills are primed for renewed growth in coming years.

Global Race for AI Talent

Artificial intelligence, the simulation of human intelligence in computer systems, is being utilized globally by a growing number of industries. In 2023, adoption of AI and utilization of tools like Chat-GPT became more mainstream. This caused a surge in demand for tech talent with specialized skills related to the creation and implementation of AI.

Like the tech industry overall, many AI companies have clustered in established urban markets, such as the San Francisco Bay Area and Beijing. These markets provide AI companies with easy access to funding networks and large tech talent pools. On the other hand, AI’s rapid expansion has driven talent demand and led other companies to prioritize their access to talent pipelines, either by locating close to universities or in markets with a high number of migrating graduates. This has led to AI clusters in atypical locations like Oxford, Cambridge and Bologna.

The presence of an established AI-specific educational program is also a strong indicator of an emerging AI talent hub. This is evidenced by companies actively hiring AI talent in secondary U.S. markets like Albany (University of Albany), Buffalo (University at Buffalo) and Madison (University of Wisconsin) and in Asia-Pacific markets like Singapore (Nanyang Technological University) and Australia (University of Technology Sydney). Two CBRE reports have futher details: Artificial Intelligence: U.S. Talent Spotlight and Artificial Intelligence Tech Hubs: Asia-Pacific Talent Spotlight.

In a highly competitive industry like AI, companies must work hard to retain talent. According to data from LinkedIn surveys, AI talent is primarily driven by career growth, compensation levels and a desire to work on challenging and innovative projects. They are less concerned with managerial support, job security and work-life balance.

Global demand for AI talent continues to grow due to new company formations and expansions of existing companies, as well as the need to develop and use new technologies to improve business operations.