Tech in the city: who’s calling the shots?

Iain Franklin, Head of EMEA Strategic Consulting

November 04, 2022

Shiny offices belonging to the hippest social media giants are today a mainstay of major cities.

But digital native firms are also being very public about their scaling back of downtown offices, and slowing expansion plans, while putting hybrid work into place. What – or, more significantly, who – is around the corner?

Just as the likes of Salesforce’s ‘Success from Anywhere’ working model settles in across its Paris, London and New York offices, and as other firms such as Meta (Facebook) recalibrate, we are starting to see more established so-called legacy tech and software companies – as well as financial and professional services firms – looking to move back into more central parts of town.

From the 1980s up into the noughties, legacy tech firms were happy gathering their workforces in large campuses near – but not in – gateway cities. Take Reading, which attracted Microsoft and Oracle, or SAP, founded in the tranquil German town of Walldorf, south of Frankfurt.

More recently and back in the city, the likes of London’s King’s Cross and vast redevelopment schemes in Dublin have welcomed the arrival of major tech firms, from Google’s landscraper to LinkedIn and TikTok. Young, educated digital natives have become drawn to amenity and experience-rich city centres and, with considerable house price growth, to renting, rather than owning. Whilst the pandemic saw many people leave the city as remote working increased, that trend that may now be reversing, with demand for flats in UK cities revived.

The appeal of downtown now extends to all industries - and all company vintages - who need tech skills, as every business undergoes digital transformation accelerated by the pandemic. Just look at the life sciences sector flocking to cities. Plus, more companies want people who can analyse data and work with machine learning as a business tool to enhance insights and identify savings. The speed of business development will be determined by the talent they can attract.

Relatively nimble tech businesses will always go where the skills are – and today, that’s just a short bike ride from other industries and sectors, creating competition for similar talent in similar places. Not everyone can have the ‘best of the best’, and so for companies that want that talent, and want them working together in person, it’s becoming increasingly clear that what matters more today is the talent inside the building, not the name above the door. While tech continues to shape our cities, it’s now the people with digital skills, not the firms, who are calling the shots.

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