European high-tech firms, even in the midst of their own belt-tightening, are having just as hard a time finding talent as their North American counterparts, says Adam Breeze, co-founder and director of TechLocate, which tracks European inward investment and helps to match tech firms with ideal locations.
     "IT shortages are common throughout Europe," he reports. "Many projects are being outsourced to Estonia, Latvia, Lithuania and Russia, especially in the software field. Many governments, including the UK and Germany are looking to offer work permits to attract IT workers from Asia. In many of the rust-belt areas, the European Union is spending billions of dollars on retraining workers and ensuring that the next generation of school-leavers have the right skills."
     Mike Harling, director of international investment consultancy Whitefield Consulting, London, says telecom infrastructure and cost are as crucial as always to site decision-making, but, "most important at the moment for high-tech companies of all sizes is finding a satisfactory supply of suitable, quality staff, now and for the foreseeable future."
     While The Netherlands, Sweden, Germany and France all have a large stake in the new economy, the United Kingdom leads the way. According to the recent "Business in the Information Age -- International Benchmarking Study 2000," commissioned by the U.K. government's Dept. of Trade and Industry, 81 percent of UK businesses are now online, including 1.7 million SMEs, 350,000 of which conduct trade online through B2B networking. Software firms from around the globe are establishing offices in the region. According to international property consultants Healey & Baker, London is Europe's leading Internet city, picking up 39 percent of votes in its recent survey of over 500 European business leads, and soundly thrashing runners-up Frankfurt (7 percent) and Paris (5 percent). Globix Corp. has begun work on a SuperPOP Net data center in London, while Anystream, a Virginia, USA-based software company, is locating a sales and service office there to serve its European markets.
     Harling notes that "despite the pioneering nature of new technology, these companies prefer to 'hunt in packs' and form clusters rather than pioneer new locations alone." He also notes the demand for incubator space of the kind provided by Sittingbourne Research Centre in the County of Kent. "There is strong demand for this kind of space throughout the UK, but developers in general have been slow to respond," he says.
     According to The Economist Intelligence Unit in its May 2000 Global Outlook report, Netherlands ranked as the world's 5th most "e-business-ready" country, and was deemed the best place in the world to conduct business in general over the next five years. Even after the recent closing of Amazon.com's customer service center there, those 240 workers will no doubt find opportunities aplenty in a high-tech environment unlike any other. Company owners feel the same way when they find out that not only can their people speak several languages, but that early financial losses -- common among high-tech startups -- can be carried forward indefinitely under Dutch tax law. There's no withholding tax on interest or royalties, either.
     Germany's high-tech charge is led by Berlin, with Frankfurt, Hamburg and Munich all playing large roles, as well. In a recent article for Business 2.0, Adam Breeze noted that having 130,000 university students to draw from, relatively high unemployment and large tracts of vacant office space have made Berlin a healthy draw for New Economy companies. "The city has Europe's most comprehensive telecoms and fibre optic network," writes Breeze. "It boasts 250 research institutes, 85 of which are in the software field. Berlin has also attracted hundreds of major companies to relocate here, ranging from Sony's showpiece European headquarters in Potsdamer Platz to a raft of small new media and high-tech players from elsewhere in Germany."
     New tenants in Munich include RadView, Sapient and DigiPlex. Breeze points to the "industrial heartland of the Ruhr in Germany's North West Rhineland" as a prime spot for industrial-to-tech makeover activity. In the country's eastern half, the cities of Dresden, Chemnitz and Leipzig have become what Breeze calls "one of Europe's largest clusters of semiconductor activity around." The country is seeking to solve the IT worker paucity by planning to grant 10,000 non-EU work permits for specialists in the field.