Buzzing with Potential

Project Support for Cutting-edge Tech Cities

By Helen Campbell

A lot has changed since Silicon Valley became the name instantly associated with technology hubs.

Today, new tech cities attract creatives and specialists who work in a different way, and want to live in a different way. Not for them the gray slate and glass of a 1980s skyscraper with regimented desks, their manager in a glass capsule in the corner, and home a frenzied hour’s drive each way and still with crippling rent.

The tech city start-ups that flock to establish themselves in these tech communities need to attract young, mobile talent. When they get to work, their employees want inspirational breakout zones, beanbags, nap pods, pool tables in reception, even slides and giant Jenga.

They want to know that they can take their project team to the coffee shop next door on the spur of the moment, while also able to get to the airport in 20 minutes. And they want to be able to easily walk, cycle, scooter or take the metro to work, and to be able to bring their dog to the office – even when it’s not officially “Bring your dog to work day.”

Ironically, the phenomenon of tech cities is not so much about tech, as it is about people. Tech companies know and understand the wishes of their prospective recruits to have shorter work commutes and better work-life balances than their parents, plus improved access amenities, leisure facilities on the doorstep and greener lifestyles overall. This all draws heavily on the project industry, calling for infrastructure and transportation related cargoes to create the modern-day working dream in purpose-built hubs.

“The starting point for our research is people,” says Paul Tostevin, head of world research at Savills, which recently produced its third annual Tech Cities in Motion in-depth report. “When we look at cities that we see as tech cities, we see them as vibrant cities where people want to live and work and that makes them magnets for talent. They are also major recipients of venture capital investment.”

Open to Business

“The main factors are, firstly, the business environment. You need to have a city that’s open to business, and that has a good research and development culture. Actual physical linkages are quite important too, then the softer elements come in, things like ‘buzz’ and wellness, what the café and bar scene is like, and what the culture is like,” Tostevin said.

“Cost of living is important, and the talent pool is critical to the tech industries, so this means good universities. Obviously, the cost of real estate is relevant, although we give that quite a low weighting in our own index as we find it’s not a huge determinant,” he said.

In addition to Silicon Valley, a number of other cities around the globe have long been known for their prominence in specific sectors for some time. For example, London is a major global center for fintech, while New York’s specialism is media tech.

In China, the state’s desire to keep tech close in the interests of state control has naturally led to Beijing becoming its dominant tech city. In the U.S. and for similar reasons, Washington D.C is one to watch. In Europe, Berlin has evolved substantially over the past two decades, and the recent announcement by Tesla of its move to the German capital is likely to herald a renewed evolution and moves by more tech start-ups to piggyback on Tesla’s move.

The importance of lifestyle to tech’s target talent pool means smaller, more compact locations such as Amsterdam, Dublin and Berlin are starting to supplant the “traditional” tech cities like New York and London, simply because ease of mobility is a hugely significant factor. The lures of shorter commutes, easier access to amenities and a better work/life balance are irresistible. This sort of evolution already happened to some degree with Silicon Valley and San Francisco.

“Something we have seen is people actively choosing to live in San Francisco rather than Silicon Valley, where a lot of these tech companies are located,” Savill’s Tostevin said. “In Silicon Valley, it’s much more of a car-dominated environment where you have to drive to work and you don’t have that immediate live-work situation that San Francisco offers.

“Mobility is such an important factor, and this includes the very traditional, such as metro infrastructure, through to things like innovative ride-sharing models, bike and scooter share schemes. What we tend to see, and certainly in a lot of the European tech cities, are cities you can walk and cycle around easily. They are not too car-dominated and that means a live-work balance that is certainly very appealing to the younger generations, the millennials, the so-called Gen-Z, which are the people that will be working in these sorts of sectors.”

Finance Blocks

The high volumes of finance involved means the development of these purpose-built cosmopolitan technical hives isn’t without hurdles, however. Plans to build a manufacturing and technology complex across 2,000 hectares just outside the Moroccan city of Tangier were quietly put on ice last year amid wrangling over its size and the structure of the new city’s ownership.

The project was resurrected with the announcement in summer 2019 of a new Chinese investor. As part of China’s expansive and ambitious Belt and Road Initiative, or BRI, Chinese construction giant China Communications Construction Co. (CCCC), and its subsidiary China Road and Bridge Corp. signed a memorandum of understanding with the Moroccan government on April 26 in Beijing.

Tangier is perfectly located – on the Strait of Gibraltar, a mere 15-kilometer hop from Europe and supported by the modern port of Tangier Med, a well-developed motorway network, a high-speed train line and nearby industrial and logistics areas. Underpinned by the free trade agreements Morocco holds with the EU and the U.S., and by growing markets in Africa, the newly reawakened development is designed to attract and host 200 manufacturers, many from China but also beyond, in sectors including automotive, aeronautical, textile, chemical, renewable energy and food industries. The new city will be constructed in three phases, and the move is expected to generate about US$10 billion in investment and create 100,000 jobs.

More than 6,000 kilometers to the southeast, the Kenyan capital of Nairobi is already on its way to having a new technology center on its doorstep, recently receiving an additional boost, also from China, with a pledge of a US$666 million cash injection to finance a data center as part of a major development. The tech city will be built in Konza, about an hour’s drive from Nairobi, and will be the latest in a raft of improvements to the country resulting from heavy investment by Chinese funders in recent years.

While China’s BRI has its detractors – concerned about the overreliance on Chinese funds and the dominance of Beijing – there is no doubt that struggling economies such as Kenya and Morocco are keen to secure investment and kick-start their respective fortunes and the cash has to come from somewhere.

Alternative Thinking

For project cargo opportunities, some less-traditional thinking is required. Tech cities do not need immediate proximity to infrastructure such as ports.

“We’re now seeing smaller cities competing more evenly because they are succeeding in tech – you don’t necessarily need to be by a port or major industry or a financial center,” Tostevin said, citing Tel Aviv as an example. “Tel Aviv does have a port, but is otherwise quite remote. It is doing very well in the tech world, because it has good universities, a huge talent pool and very good links with the U.S., plus a flow of venture capital and a real start-up culture. These are factors that enable cities that have not really been featured on the world stage to do pretty well.”

As a university city where students have wanted to stay and build a career, Austin, Texas, provides another good example, as do a handful of Chinese cities such as Hangzhou, Shenzhen and Chengdu – less well-known in the west than Beijing and Shanghai, but which have been able to get in on the act and grow in tech.

Belarus, the landlocked nation between Poland and Russia, is the subject of yet another Chinese investment in the form of a tech city under construction just outside the capital, Minsk. This latest development is on the back of the state-backed Hi-Tech Park, established as a start-up hub and which is already making waves, helped by its special economic zone status. Minsk is a pleasant city in the center of Belarus with some high-performing universities, excellent transport systems and a cost of living below the global average; an obvious tech city choice for investors.

Where Next?

So which locations will “go tech” next? Cargo movers planning their next piece of new business should keep an eye on Cape Town, and other locations in southern Africa. Also, in South America, where property remains cheap, there is ample talent and although wider infrastructure is still developing, there may well be opportunities.

Tech cities need infrastructure, and project cargo carriers will find plenty of opportunities for business. To determine the source of the next opportunity, follow the tech and follow the money. The investment that financiers are plowing into bringing these tech clusters to life is large, and an inward flood of entre capital is a reliable barometer for pinpointing the next enquiry to ship a pair of specialized cranes, 30 giant generators or 300 sparkling new metro train carriages.

For the breakbulk cargo sector to share in the benefits of the continued tech boom, there is a need to think as creatively as the tech companies themselves; not necessarily requiring a beanbag or a pool table, but at least the vision to look beyond the obvious big capital cities and to think more broadly and less traditionally.

Technology is the very essence of innovation and, to take advantage, project cargo must be the same.  

Helen Campbell is a freelance journalist based in London who has specialized in energy, environment, sustainability and technology for over 20 years.

Image credit: Shutterstock