< Previous68 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E S68 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E Snformation communications technologies is a sector thats always had an econom-ic and employment impact. But the nature of that infl uence keeps shifting into new arenas. Dan Levine of Oxford Economics notes one:“ e impact of data centers and cloud computing on local economies continues to be an area of great interest to Oxford Economics’ clients,” he says. “In one study for Google, for example, we found that at the county level, the presence of a Google data center increases employment and attracts new college-educated college residents to that county within a few years of the data center’s opening.” At the country level, meanwhile, “data protection laws, always a major consideration, are increasingly a sig-nifi cant factor in international data center location decisions.” e data center niche is exploding with activity. Conway Analytics’ Conway Projects Database has tallied over 450 data center projects over the past three years, while Synergy Research Group says there are now nearly 400 hyperscale data centers — de-fi ned as those with a minimum of 5,000 servers — in the world.But ICT is also about the human side: software engineers and business process outsourcing, among other sub-sectors. According to Stratistics MRC, the Global IT Outsourcing Market is expected to go from $315 billion in 2015 to $481 billion by 2022, growing at a CAGR of 6.2 percent.Our No. 1 in Eastern Europe, Budapest, con-tinues to top other IT outsourcing rankings too; Hungary holds a large chunk of Eastern Europe's software development and IT services market. e Czech Republic (Prague places second) is seeing a 10-percent increase in IT outsourcing annually, and now is home to around 156,000 ICT professionals, reports N-iX, while Romania's ICT job growth is at 15 percent (Bucharest ties for third). In Western Europe, Dublin’s cluster of data centers has even strained the power grid, while its cluster of ICT jobs continues to surge from investments by the likes of Microsoft, IBM and Accenture. is report’s No. 1 in Latin America is, no surprise, San José, Costa Rica, which some call the world’s back offi ce. e prediction by a 2015 Inter-American Development Bank report that San José will be one of the fi ve most important poles in Latin America for the ICT and software develop-ment by 2025 appears to be coming true.As multinationals look to the developing world, they may look more closely at such emerging ICT hot spots as Cairo and Johannesburg. But they’ll also keep deploying the longstanding ICT and BPO services available in India, where Bengaluru and Hyderabad top a grouping of several Indian cities dominating our Asia Pacifi c rankings.ICT continues to be the Chicago region’s fast-est-growing sector, as multinationals and startups alike congregate inside and outside the Loop, and the city’s digital startup hub 1871 continues to reel in and spin off innovation as it ranks among the world’s top tech incubators. Our No. 2, Greater Washington, D.C., continues to make its case on the strength of such subsectors as cybersecurity and military/defense, as well as the enormous and still-growing cluster of data center operations in Northern Virginia.ICTINF ORMATION & C OMMUNICATIONSTE CHNOLOGIES68 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E SIT & COMMUNICATIONSTop Cities 1 Dublin Metro Area, Ireland 2 Berlin/Brandenburg Metro Area, Germany 3 Amsterdam Metro Area, Netherlands 4 Frankfurt Rhine-Main Metro Area, Germany 5 London Metro Area, UKCompany Metro Area Country Inv. US $Million JobsMicrosoft Corp. Amsterdam Netherlands 2,252 Roche Holding AG Kaiseraugst Switzerland 1,030 3,200Apple Inc. Galway Ireland 955 Apple Inc. Viborg Denmark 945 Apple Inc. Aabenraa Denmark 921 Selected Corporate Facilities Investments, 2015-2017WESTERN EUROPEOf the €33B in turnover generated by the ICT, creative and media cluster in Berlin in 2015, €7.1B came from ICT. About 8% of Germany’s ICT, media & creative businesses are based inBerlin.ICT in Ireland generates €35B in exports annually and employs over 37,000 people. One company site accounts for 6% of that total: A September 2018 announcement of 200 new jobs at One Microsoft Place campus in Dublin will bring the site’s total employment to 2,200. 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E S 69IT & COMMUNICATIONS“In Hungary we are experiencing a rare constellation of intentions among the various key players: The critical mass of SMBs and big corporations have started to show a growing demand for smart digital and cloud solutions that can empower them in their businesses, while the Hungarian government also has embraced the idea of digitalization and even dedicated a strategic program to this matter.” — Gabriella Szentkuti, CEO, Microsoft Hungary, on an ICT sector that contributes 12 percent of Hungary’s GDPCompany Metro Area Country Inv. US $Million JobsSberbank Rossii OAO Moscow Russia 188 Foxconn Technology Co., Ltd. Prague Czech Republic 101 Flextronics Zalaegerszeg Hungary 70 600Merck Sharp & Dohme Prague Czech Republic 41 It Services Kft. Debrecen Hungary 39 720Selected Corporate Facilities Investments, 2015-2017Top Cities 1 Budapest Metro Area, Hungary 2 Prague Metro Area, Czech Republic 3 Bucharest Metro Area, Romania 3 Moscow Metro Area, Russia 3 Brno Metro Area, Czech Republic 3 Krakow Metro Area, PolandEASTERN EUROPE & CENTRAL ASIA70 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E SBUDAPESTHUNGARYPHOTO: GETTY IMAGESSECTOR LEADER IN:hen Milken Institute in 2017 undertook to evaluate Europe’s best-performing cities, Budapest ranked No. 3, making the Top 10 in four of the eight criteria:• Total Employment Growth 2015-2016: No. 1 (3.25 percent)• Total Employment Growth 2011-2016: No. 3 (16.41 percent)• Total Wage Growth 2012-2013: No. 7 (4.84 percent)• High-Tech Services Location Quotient: No. 5Milken isn’t the only global think tank seeing the Hungarian capital's potential. When infrastructure consultancy CG/LA announced the winners of the 2018 Infrastructure Project of the Year Awards in early 2018, the Budapest-Belgrade Railway, part of China's Belt and Road Initiative, was awarded fi rst place in the fi nance category. e $900-billion project between the capital cities of Serbia and Hungary will serve as a main transport route for Chinese trade.As most European countries in the region forecast static or negative population growth, Hungary is doing its part to make sure conditions are welcoming. e government recently reduced social security contributions from 27 percent to 22 percent, going to 20 percent in 2018, with plans to drop to 12 percent by 2022. “We also are using tax instruments to promote labor mobility,” Róbert Ésik, president of the Hungarian Investment Promotion Agency, told Conway Advisory’s Denis Merkwirth. “ e government has recently increased the tax-exempt reimbursements for employees’ commuting and housing.” olons ranked Budapest No. 25 in its 2017 olons Services Globalization Index of Top 100 “Super Cities” for outsourcing. London-based software development consultancy Liemur certainly fi nds the Budapest area to its liking: “Choosing Budapest as the location for our off shore Design & Development Centre is the culmination of both a number of years working with local and off shore project teams and extensive research into the question of how software is developed effi ciently,” the fi rm says, referring to the location as its “European off shore solution.”Among the location’s strong points are business culture similarity to Western Europe, time zone, high levels of engineering and programming skills, and costs: “Cost is important to any business, and providing services from our DDC in Hungary allows our customers to benefi t from savings of up to 50 percent over UK costs,” Liemur says.Adam BrunsSite SelectionMagazine 47.4979° N 19.0402° Eelev. 315 ft.CESUTC+11st1st2nd1st2nd4th1st1st1st3rd 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E S 71NORTH AMERICAIT & COMMUNICATIONSCompanyMetro AreaCountryInv. US $MillionJobsSwitch, Ltd. Grand Rapids-Wyoming, MI United States 5,000 1,000Switch, Ltd. Atlanta-Sandy Springs-Roswell, GA United States 2,500 65Apple Inc. Phoenix-Mesa-Scottsdale, AZ United States 2,000 Apple Inc. Des Moines-West Des Moines, IA United States 1,330 50Microsoft Corp. Des Moines-West Des Moines, IA United States 1,100 84Selected Corporate Facilities Investments, 2015-2017Top Cities 1 Chicago-Naperville-Elgin, IL-IN-WI, USA 2 Washington-Arlington-Alexandria, DC-VA-MD-WV, USA 3 New York-Newark-Jersey City, NY-NJ-PA, USA 4 Dallas-Fort Worth-Arlington, TX, USA 5 San Francisco-Oakland-Hayward, CA, USA200%150%Early Stage Growth (5 years)100%50%0%-50%75%100%Exits Growth (5 years)125%175%150%225%200%Startup Sub-Sector LifecycleBiotechCleantechDigital MediaHealth and Life SciencesFintechAI, Big Data & AnalyticsGamingAdtechBlockchainAdvanced Manufacturing & RoboticsEdtechGrowthMature200%150%Early Stage Growth (5 years)100%50%0%-50%100%Exits Growth (5 years)150%200%250%Startup Sub-Sector LifecycleBiotechCleantechDigital MediaHealth and Life SciencesFintechAI, Big Data & AnalyticsGamingAdtechBlockchainAdvanced Manufacturing & RoboticsAIEdtechGrowthMatureDeclineAgtech & New FoodAgtech & New FoodSOURCE: STARTUP GENOME72 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E SIT & COMMUNICATIONSCompanyMetro AreaCountryInv. US $MillionJobsFoxconn Technology Co., Ltd. Nanjing Shi China 5,740 Microsoft Corp. Busan South Korea 5,200 Foxconn Technology Co., Ltd. Maharashtra India 5,000 Alibaba Group Services Ltd. Kuala Lumpur / Klang Valley Malaysia 1,580 Shijiazhuang Changshan Textile Group Co., Ltd. Shijiazhuang China 1,160 3,000Selected Corporate Facilities Investments, 2015-2017Top Cities 1 Bengaluru Metro Area, India 2 Hyderabad Metro Area, India 3 Delhi National Capital Region, India 4 Singapore, Singapore 5 Pune Metro Area, India 5 Chennai Metro Area, IndiaASIA PACIFICLondonBerlinMelbourneSantiagoSingaporeBuenos AiresAmsterdamCape TownSan FranciscoHong KongNew YorkTorontoDublinTokyoBostonCopenhagenAustinSeattleStockholmBengaluruSeoulTel AvivIndex87654321012345678910111213141516171819202122$3.32 $3.30$2.52 $2.55$3.67$3.75$3.60$3.07$4.02$4.33$3.50 $3.50 $3.65$1.35$4.50$3.17$3.37$2.48$4.51$2.50 $2.47$1.78Flat White Index (Quality, Quantity Cost)Flat White Cost (USD)SOURCE: SAVILL'S WORLD RESEARCH ON THE COST OF A FLAT WHITE COFFEE74 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E SLATIN AMERICA & CARIBBEANIT & COMMUNICATIONSCompany Metro Area Country Inv. US $Million JobsBanco Santander SA Campinas Brazil 334 Marcatel Com, S.A. De C.V. Monterrey Mexico 200 Ascenty Data Centers Locação E Serviços S/A Campinas Brazil 125 Oracle Corp. Guadalajara Mexico 86 150Equinix, Inc. Sao Paulo Brazil 76 Selected Corporate Facilities Investments, 2015-2017Top Cities 1 San José-Heredia Metro Area, Costa Rica 2 São Paulo Metro Area, Brazil 3 Guadalajara Metro Area, Mexico 4 Campinas Metro Area, Brazil 5 Rio de Janeiro Metro Area, Brazil 5 Santiago Metro Area, Chile“We fi rst opened a development center in 2013 with just four Costa Rican software engineers. Word spread quickly about our deep technical expertise and highly motivated Gorillas. By the end of the fi rst year, we had 25 software engineers handling the surge in client demand. Over the past fi ve years we’ve grown our developer base 10-fold and our current client roster includes half a dozen Fortune 500 companies. Today we have more 250 developers in Costa Rica and are continuing to hire.” — Mario Merino, software developer Gorilla Logic, July 2018 blog12345678910111213141516171819202122 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E S 75IT & COMMUNICATIONSAFRICA & MIDDLE EASTCompany Metro Area Country Inv. US $Million JobsAmdocs Ltd. Raanana Israel 266 IBM Johannesburg South Africa 60 Kooba Kenya Ltd. Mombasa Kenya 30 Mainone Lagos Nigeria 24 Megaun Group Borg El Arab Egypt 20 Selected Corporate Facilities Investments, 2015-2017Top Cities 1 Cairo Metro Area, Egypt 1 Johannesburg Metro Area, South Africa 3 Borg El Arab, Egypt 3 Lagos Metro Area, NigeriaCairo, Egypt, has the least expensive fi rst-month relocation costs (US$656.80) among 80 global cities known for their strong universities and startup culture. SOURCE: NESTPICK, JUNE 201876 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E S 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E S 77 2018 2018 W O R L D ’ S M O S T C O M P E T I T I V E C I T I E S 77LIFE S CIENCEShe title of life sciences hub is among the most coveted in economic devel-opment, as it implies an environment with scientifi c brainpower, cutting-edge facilities and technology, an active entrepreneurial and venture capital scene, and, typically, high-dol-lar companies and salaries.So what gives when Algiers tops our Middle East and Africa rankings, just ahead of Jerusalem, King Abdullah City and Cairo? Well, plenty: Ismael Chikhoune, president of the U.S.-Algeria Business Council, noted in a September 2018 interview that the life sciences is second only to oil & gas among his organization’s 125 member fi rms. It may have something to do with a years-long eff ort to boost the sector that, with guidance from Deloitte and others, resulted in the country’s 2014 debut of its Vision 2020 plan that included agreements with the likes of the Pharmaceutical Research and Man-ufacturers of America to support biotech expansion in the country.While most point to our No. 3 metro Great-er Boston as the top life sciences hub in North America, this year’s rankings point to Chicago and New York at the top — a fi nding corroborated by Moody’s identifying them as the top two metros for pharmaceutical employment as recently as 2016. A cluster of some 120 companies in the Big Apple is supported by what Battelle identifi es as the largest life sciences talent base in the nation, as well as a growing network of institutional and real estate infrastructure involving the likes of Alexandria Real Estate Equities and nine academic medical centers.In Western Europe, Irish cities take four of our top fi ve spots, with Dublin and Cork at the top, Galway and Waterford at Nos. 4 and 5, with Berlin sandwiched in between. U.S.-based West Phar-maceutical Services was among the 2018 investors in Ireland, opening a global center of excellence in Waterford as part of its advanced manufactur-ing network that includes sites in Singapore and Dublin.In the Asia Pacifi c, China’s mixed blessing of oodles of talent and rising medical issues associated with its rising middle class make its cities prime targets for life sciences innovation, led in our rankings by Suzhou and Chengdu. In July 2018, France’s Sanofi launched a global R&D operations hub in Chengdu, where 300 employees will con-nect to the company’s other hubs in Cambridge, Massachusetts (part of our No. 3 metro in North America behind New York and Chicago) and in Paris. Meanwhile, longtime leader Singapore, ranked No. 3 this year, continues to fortify its bank of life sciences talent, recently welcoming, among others, a couple of investments from Royal Philips.Oxford Economics research found that in the fourth quarter of 2017, pharmaceutical output in China increased 14.9 percent year-on-year. Plans by the government to expand the healthcare system will further support this trend. “ rough-out the developing world, rising middle classes and increased access to health care are driving increased demand for pharmaceutical products,” notes Oxford’s Dan Levine. “To date, however, pharmaceutical production in countries like India and China has been held back because of safety concerns. Over the next few years, look for indus-try and regulators to address these concerns and for production to increasingly shift to these emerging markets.”Next >