6 Asian Pacific countries in top 10 to be the next rival to Silicon Valley

COVID-19 has rapidly accelerated new ways of working, but the world’s ‘technology hubs’ are here to stay, according to new research from KPMG, although they may not be in Silicon Valley.

When many offices and downtown areas locked down early in 2020, entire workforces shifted to remote-working, with some employees leaving major cities to find more space at a lower cost, among other factors. But tech leaders believe the industry’s future success will rely on a balance between physical workspace and greater flexibility.

More than 800 industry leaders were surveyed for the latest KPMG Technology Industry Survey. 39% believe ‘hub’ cities including London, Singapore, and Tel Aviv will continue to play a vital role, enabling talent to coalesce and collaborate in communities with a solid digital infrastructure. Only 22% believe hubs are no longer important. The findings echo earlier research from the 2021 KPMG CEO Outlook pulse survey, which revealed 78% of tech leaders have no plans to downsize their physical footprint and only a quarter (26%) expect to hire predominantly remote talent in the future.

Industry insiders were also asked to rank cities around the world, outside of Silicon Valley, that they believe will flourish as technology innovation hubs in the next four years. The cities making the top 10 all had strong ecosystems in place before the pandemic, enabling them to emerge stronger – and potentially provide a real challenge to Silicon Valley – as the world prepares for a post-COVID recovery. 

There are a few movers to note in the top ten from last year’s survey. Seoul, ranked eight last year, dropped out of the top ten to tie for fourteenth this year while, Austin and Seattle, ranked eleventh and twenty-fourth respectively last year, moved up to share tenth spot in 2021. 

Interestingly, six of the top ten cities in the ranking are from the Asia Pacific region. 

While Silicon Valley is known as the dominant region in global technology, only one third of leaders feel strongly that it will maintain its long-term innovation leadership position with an equal number believing it won’t

Alex Holt added:

“To the respondents that previously answered that physical hubs are very important, KPMG asked what the likelihood is that the technology innovation center of the world will move away from Silicon Valley to another location in the next four years. One-third (32 percent) feel strongly that Silicon Valley will maintain its leadership position over the next four years but interestingly, the same number also strongly believe it won’t. Companies of different size have slightly divergent views on this. Thirty-eight percent of large technology enterprises think Silicon Valley will keep its leadership position but only 27 percent of small/start-up companies feel this way. Mid-market companies are in the middle at 32 percent.

What’s apparent from our research is that tech leaders are listening to their people and shaping policies and views on their future strategies based on the needs and aspirations of their workforce and the benefits and challenges different working models create. The industry has a reputation for being at the forefront of new ways of working, and it’s my view that COVID-19 has simply accelerated that sense of innovation and progressive change. There is no one-size-fits-all approach and we’re already seeing some industry divergence. While there are some big unanswered questions about long-term workforce models, the sector seems to be embracing the opportunity to build a truly hybrid structure, combining the thriving ecosystems of tech hubs with the agility, balance and access-to-talent that remote working offers.”  

*Top 10 cities seen as leading technology innovation hubs over the next four years (outside Silicon Valley/San Francisco)

2021

1: Singapore

2 (tie): New York City / Tel Aviv

4: Beijing 

5: London 

6: Shanghai

7: Tokyo 

8: Bengaluru 

9: Hong Kong 

10 (tie):  Austin / Seattle 

The report Technology Innovation Hubs can be viewed at: https://www.kpmg.us/industries/technology/tech-hubs.html

Thai version: 6 ประเทศในเอเชียแปซิฟิก ติดท็อป 10 คู่แข่งซิลิคอนแวลลีย์

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KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

KPMG in Thailand, with more than 2,000 professionals offering Audit and Assurance, Legal, Tax, and Advisory services, is a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

Ploi Phayakvichien
ploi@kpmg.co.th