he number of new R&D-centers and technology-driven production operations in and for the European market is increasing, and European cities want to host them. That's why such monikers as "tech cities," "tech hubs" and "tech valleys" are so prevalent today. But how accurate are those labels?
      Until now, international companies and economic development agencies have lacked an index for measuring the strength of the technology investment climate of Europe's main cities. Therefore, Buck Consultants International (BCI) has introduced the BCI Tech Cities Index, which is based on five major factors of regional technological competitiveness: technology and know-how, talent, market size, connectivity, and business climate.
      These factors combine data which apply to regional economies but also assessments of such location factors as labor costs and venture capital, which are important to potential investors.
      Table 1 gives an overview of the components taken into account for each of the five factors.
      BCI has assessed 30 cities for the first Tech Cities Index. First, countries have been selected with at least 1 percent of national GDP spent on R&D. Secondly, cities have been identified with a high score on Europe's Innovation Scoreboard and high position of their universities on worldwide rankings. Figure 1 presents an overview of the cities analyzed.
      For all these cities data have been found, compared and analyzed in order to give an objective overview of their competitiveness for R&D and high-tech investment projects.       The most knowledge-intensive regions, Munich and Zurich, lead the ranking for technology and know-how. This is mainly due to the relatively high amount of R&D spending as a percentage of GDP (which is above the Lisbon target of 3 percent), high number of registered patents and overall high innovative performance.
      Stuttgart, Stockholm and Karlsruhe (Germany) follow in second, third and fourth position. The presence of Cambridge and Oxford in the top 10 is due to their high standard and well-known universities. According to both the Times Higher Education-QS World University ranking and Academic Ranking of the World University of Shanghai Jiao Tong University Institute of Higher Education, these belong among the highest-ranked universities, not only in Europe but in the whole world.       For the talent factor we have looked into labor availability such as skilled people and number of workers in the R&D/tech industries, labor flexibility and labor costs. The top 10 ranking resulted in a first position for London, closely followed by Madrid and Paris. All three regions score high on the availability of highly skilled people in the labor pool.
      Interesting to see is the eighth position of Prague within the top 10 ranking for Talent. Although it does not offer the largest amount of available skilled R&D/tech labor, it is a cost-efficient location due to low labor costs compared to other European cities included in the ranking. None of the German locations are present in the top 10, mainly because of the high cost of labor and less-flexible labor market.       In terms of economic performance, not only the size of the regional market but also – and more importantly – the national market have been taken into account. London and Paris clearly rank first as large regional economies. For many companies, it is attractive to locate in a market where companies that might be interested in their high tech products or new technologies are concentrated. The Italian regions Milan and Rome are in a joint second place.       The cities of Amsterdam and Paris both lead the top 10 ranking of connected cities, followed by Leuven (close to Brussels) and Munich. Both Paris and Amsterdam have a central location within the European market and are well integrated in the Trans European Networks. The Paris Airports and Amsterdam Schiphol Airport belong to the largest European airports and have high quality service levels offering daily direct flights to main destinations in Europe.       The business climate has been assessed on factors that act on a national level. All of the Scandinavian countries are represented in the top five countries, which is mainly due to the availability and investment of venture capital and their relative low risk profile. The same is true of the United Kingdom. Ireland, one of the countries with the lowest corporate tax rates in Europe (12.5 percent), is positioned fifth.       BCI's overall ranking of tech cities makes Paris rank as Europe's top city for R&D centers with a rating of 4.01. London ranks second with a 3.80 score, closely followed by Oxford in third place with a 3.70 score. With Cambridge and Manchester also in the top 10, the U.K. does very well.
      The bottom of the index is represented by relatively small regions in terms of talent pool (e.g. Prague, Delft, Aachen, Nice) and more expensive and peripherally located regions (Vienna and Dublin). The global cities of Paris and London are not only true financial centers and tourist locations, they are also R&D hubs.       Individual companies looking to set up a new R&D center will make a specific location decision. The technology investment climate for biotech companies differs, for example, from the technology investment climate for manufacturing companies. The Tech Cities Index gives an overview of the strengths of the overall tech investment climate in Europe's most important technology cities.

      René Buck is founder and president of Netherlands-based Buck Consultants International (BCI), one of Europe's leading location and real estate consultancy firms. Nynke Draisma is a consultant at the same firm. For more information on BCI, visit www.bciglobal.com.