Top 100 Global Engineering Locations

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Top 100 Global Engineering Locations

  1. 1. Confluence 2013 Accelerating Global Innovation 6th March 2013 Hyatt Regency Santa Clara, CATop 100 Global Engineering Locations
  2. 2. Zinnov Talent PracticeThe following report is the summary of the final study on “Top 100 Global Engineering Locations”Zinnov team is still working on an exhaustive report which will be released on our web portal for public view shortly.CopyrightMembers are welcome to an unlimited number of copies of the materials contained within this report.Furthermore, members may copy any graphic herein for their own internal purpose. Zinnov requests only thatmembers retain the source name/logo mark on all pages produced.Please contact our HR council account manager at +1-408-716-8432 for any help we may provide.The report herein is the property of Zinnov LLC. Beyond the membership, no copyrighted materials of Zinnov maybe reproduced without prior approval.DisclaimerAll the information contained in this report is obtained through discussions with industry experts, public andconfidential information sources believed to be reliable. Zinnov makes no representations or warranties regardingthe errors, omissions or completeness of any information contained herein and shall have no liability for the same.The report is provided solely for informational purposes and opinions must not be construed as advice,recommendations or endorsements. The reader of the report is advised to conduct an independent evaluation andform conclusions with respect to the information provided. Note: Zinnov 1 1
  3. 3. TABLE OF CONTENTS 1 Top 100 Cities 2 Key Findings - Summary 3 City Profiles 4 Appendix - Definitions & MethodologyNote: Zinnov 2 2
  4. 4. SUMMARY – APPROACHZinnov reviewed over 400 global cities and identified the top 100 most promisingtechnology hubs for deep dive analysis 100 Cities 400+ cities worldwide evaluated Deep dive worldwide Installed/Fresh University Technology Talent Pool Ecosystem Depth Competitive Cost Infrastructure Type of Work Landscape AMERICAS EMEA APJAustin New York Buenos Aires Santiago Brussels Tel Aviv Kiev Bangalore Sydney ChengduAtlanta San Diego Pittsburgh, PA Sao Paulo Cambridge Bucharest Kharkov Beijing Taipei CoimbatoreBay Area Seattle Fairfax Davenport Copenhagen Bratislava Moscow Chennai Tokyo ColomboBoston Toronto Florence Guayaquil Frankfurt Budapest Prague Guangzhou Dalian Hochiminh CityChicago Vancouver Fremont Lima Geneva Cairo RaAnana Hong Kong Hyderabad Kolkata WashingtonDallas Ft. Lauderdale Lincoln Haifa Dubai St. Petersburg Kawasaki Pune Metro Manila D.C.Detroit Bogota Guadalajara Managua Helsinki Dublin Warsaw NCR Selangor PenangLos Angeles Boise Honolulu Rio de Janeiro London Durban Sofia Seoul Shenzhen Xiamen Santiago deRaleigh-Cary Boulder Mexico City Munich Johannesburg Shanghai Chandigarh QuerétaroMinneapolis Brasilia Oklahoma City Santo Domingo Nice Amman SingaporeMontreal Broomfield San Juan WichitaSan José –Costa RicaSource: Focus group discussion with Zinnov clients, Zinnov R&D council, Zinnov Location and Talent Framework
  5. 5. SUMMARY - TOP ENGINEERING LOCATIONSAbout 45% of the top 100 cities are in the “AMERICAS REGION” Emerging Locations Established Locations 108,520 Bogota Austin Boise Atlanta Boulder Bay Area Brasilia Boston Broomfield Chicago Buenos Aires Dallas Pittsburgh, PA Detroit Fairfax Los Angeles Florence Raleigh-Cary Fremont Minneapolis Ft. Lauderdale Montreal Guadalajara New York Honolulu San Diego Mexico City Seattle Oklahoma City Toronto San Juan Vancouver Santiago Washington D.C. São Paulo San Jose, Costa Rica Locations to Emerge in Future Davenport Lincoln Santiago de Querétaro Guayaquil Managua Santo Domingo Lima Rio de Janeiro WichitaSource: Zinnov Location and Talent Framework Zinnov 4
  6. 6. SUMMARY - TOP ENGINEERING LOCATIONSAbout 28% of the top 100 cities are in “EMEA REGION” Emerging Locations Bucharest Bratislava Budapest Cairo Dubai Dublin Durban Johannesburg Established Locations Amman Brussels Kiev Cambridge Kharkov Copenhagen Moscow Frankfurt Prague Geneva RaAnana Haifa St. Petersburg Helsinki Warsaw London Munich Locations to Emerge in Future Nice Sofia Tel AvivSource: Zinnov Location and talent framework Zinnov 5
  7. 7. SUMMARY - TOP ENGINEERING LOCATIONSAbout 27% of the top 100 cities are in the “APJ REGION” Emerging Locations Dalian Hyderabad Pune Selangor ShenzhenLocations to Emerge in FutureChandigarhChengdu Established LocationsCoimbatoreColombo BangaloreHochiminh City BeijingKolkata ChennaiMetro Manila GuangzhouPenang Hong KongXiamen Kawasaki NCR Seoul Shanghai Singapore Sydney Taipei TokyoSource: Zinnov Location and talent framework Zinnov 6
  8. 8. DRIVERSConducive business climate and developed infrastructure along with access to highlyqualified talent were the key reasons for the emergence of these 100 locations Drivers which led to the emergence of these Locations High priority for innovation and IP Access to good quality talent creation Location Attractiveness- High Standards of Mature service provider ecosystem Living Market Expansion leading to greater Drivers Business climate conducive for Start-ups demand University-Corporate partnership in Focus on creating an outstanding corporate research and development culture and work environment Matured core business processes and Developed Infrastructure high end workSource: Zinnov Location and talent framework Zinnov 7
  9. 9. TABLE OF CONTENTS 1 Top 100 Cities 2 Key Findings - Summary 3 City Profiles 4 Appendix - Definitions & MethodologyNote: Zinnov 8 8
  10. 10. SUMMARY – LABOR COST COMPARISONSAverage labor cost percentage differential between the established and emerging costlocations is highest in EMEA, approximately 86 percent Average Labor Cost Differential, 2011 AMERICAS EMEA APJ Average Labor Cost Average Labor Cost Average Labor Cost Differential $87,100 Differential Differential $101,10 0 33% 86% 91% 63% $76,100 142% $58,200 $46,900 98% $53,000 $36,000 $35,800 $29,400 Established Emerging Future Established Emerging Future Established Emerging Future Emergents Emergents Emergents $53,000 Future Emergents $36,000 $76,100 $29,400 Emerging $46,900 $35,800 $101,100 $87,100 $58,200 Established Americas EMEA APJNote:1. The percentage differential is based on industry median data. Actual savings for companies will vary hugely depending on numerous factors such as percentile positioning in the market, brand, type of work, talent pyramid structure, etc.2. Zinnov Labor cost analysis modeler has been used to arrive at the data. All data has been gathered from historical compensation surveys, expert interviews, discussion with HR leaders, HR council event, round table, thought leadership surveys, public and confidential information sources believed to be reliable3. Data does not include benefits, bonuses, variable pay components, allowances, reimbursements, travel incentives, stock options, Restricted Stock Units (RSU) and other country specific regulatory costs which are considered to be a part of the total compensation4. The model does not take into consideration any skill specific base salary inflation, growth rate & other outlier situations which will skew the base salary dataSource: Zinnov Labor cost tracker, Zinnov cost analysis modeler 2011 Zinnov 9
  11. 11. SUMMARY – LABOR COST COMPARISONSAverage Engineering Labor Cost, 2011 - AmericasESTBLISHED Salary Austin Atlanta Bay Area Boston Chicago Dallas Detroit Los Angeles Raleigh-Cary Engineering $97,050 $102,410 $114,250 $113,580 $110,500 $87,560 $80,000 $106,130 $88,600 Washington Salary Minneapolis Montreal New York San Diego Seattle Toronto Vancouver D.C. Engineering $97,850 $87,400 $121,960 $115,000 $108,000 $91,650 $88,500 $109,460EMERGING Pittsburgh, Salary Bogota Boise Boulder Brasilia Broomfield Buenos Aires Fairfax Florence PA Engineering $46,840 $85,500 $85,000 $65,300 85600 $37,700 $95,400 $102,100 $84,750 Ft. Guadalajar Oklahoma San Jose, Salary Fremont Honolulu Mexico City San Juan Santiago São Paulo Lauderdale a City Costa RicaEngineering $114,650 $97,750 $38,870 $87,300 $44,400 $83,870 $57,600 $82,860 $75,330 $29,300FUTURE EMERGENT Rio de Santiago de Santo Salary Davenport Guayaquil Lima Lincoln Managua Wichita Janeiro Querétaro DomingoEngineering $83,700 $36,400 $25,600 $76,150 $33,500 $64,200 $35,000 $45,000 $77,750 Source: Zinnov Labor cost tracker, Zinnov cost analysis modeler 2011 Zinnov 10
  12. 12. SUMMARY – LABOR COST COMPARISONSAverage Engineering Labor Cost, 2011 - EMEAESTBLISHED Salary Brussels Cambridge Copenhagen Dubai Frankfurt Geneva Engineering $85,990 $85,500 $94,760 $84,200 $87,100 $85,200 Salary Haifa Helsinki London Munich Nice Tel Aviv Engineering $84,600 $86,100 $86,000 $92,100 $87,500 $86,000EMERGING Salary Bucharest Bratislava Budapest Cairo Dublin Durban Johannesburg Amman Engineering $37,200 $36,200 $33,680 $23,600 $70,000 $62,500 $64,500 $26,700 Salary Kiev Kharkov Moscow Prague RaAnana St. Petersburg Warsaw Engineering $35,750 $46,200 $53,300 $43,300 $75,000 $46,350 $48,750FUTURE EMERGENT Salary Sofia Engineering $38,000 Source: Zinnov Labor cost tracker, Zinnov cost analysis modeler 2011 Zinnov 11
  13. 13. SUMMARY – LABOR COST COMPARISONSAverage Engineering Labor Cost, 2011 - APJESTBLISHED Salary Bangalore Beijing Chennai Guangzhou Hong Kong Kawasaki NCR Engineering $35,000 $40,600 $32,000 $42,000 $91,500 $83,400 $34,000 Salary Seoul Shanghai Singapore Sydney Taipei Tokyo Engineering $56,500 $40,600 $74,500 $84,600 $54,200 $87,600EMERGING Salary Dalian Hyderabad Pune Selangor Shenzhen Engineering $38,000 $32,400 $33,100 $42,500 $39,800FUTURE EMERGENT Salary Chandigarh Chengdu Coimbatore Colombo Engineering $28,500 $36,800 $29,000 $28,500 Salary Hochiminh City Kolkata Metro Manila Penang Xiamen Engineering $31,400 $30,000 $24,700 $35,600 $36,100 Source: Zinnov Labor cost tracker, Zinnov cost analysis modeler 2011 Zinnov 12
  14. 14. SUMMARY - COST OF LIVING Vs. QUALITY OF LIFELocations in EMEA have the highest cost of living index, while the American cities lead inquality of life index Average Cost of Living Index Vs. Quality of Life Index, 2011 AMERICAS EMEA APJ 105.3 102.1 90.5 84.7 79.4 78.8 75.1 71.8 64.2 85.6 88.4 75.6 82.2 69.9 61.6 66.0 68.6 59.4 Established Emerging Future Established Emerging Future Established Emerging Future Emergents Emergents Emergents Cost of Living Index Quality of Life Index Cost of Living Index, 2011 Quality of Life Index, 2011 79.4 75.1 61.6 66 64.2 59.4 90.5 69.9 68.6 78.8 71.8 75.6 85.6 88.4 82.2 105.3 102.1 84.7 Americas EMEA APJ Americas EMEA APJ Established Emerging Future EmergentsSource: Zinnov Location and talent framework Zinnov 13
  15. 15. SUMMARY - COST ESCALATION - AMERICASFrom a labor cost perspective, locations in North America form a cluster around USD80,000 – USD 100,000 AMERICAS 14% Lima Labor Salary Growth Rate (CAGR - %) 12% 10% Toronto 8% Bay Area Buenos Aires 6% Oklahoma City Boulder Austin Atlanta 4% Santiago Guadalajara Vancouver Boston 2% Lincoln Davenport Seattle Dallas Wichita Pittsburgh 0% $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 Labor Cost per FTE (USD)• Labor Cost represented above is Average Median Labor Cost per FTE for Engineering Size of Talent Pool professionals across all experience levels for year 2011• Projected Labor Cost Growth Rates have been calculated using Zinnov’s proprietary forecasting model. The growth rates represented here are Cumulative Annual Growth Rates for 2012-2016 70,000 320,000 5,000• The bubble size corresponds to the relative size of the talent pool in Product Development Software + Product Development Hardware in each city Source: Zinnov Labor Cost Model Zinnov 14
  16. 16. SUMMARY - COST ESCALATION - EMEAEmerging locations in EMEA form a cluster around USD 32,000 – USD 52,000 EMEA 16% Labor Salary Growth Rate (CAGR - %) Budapest 12% St. Petersburg Kiev Bucharest Moscow Dublin Bratislava 8% Cairo Sofia Prague 4% Tel Aviv 0% $15,000 $25,000 $35,000 $45,000 $55,000 $65,000 $75,000 $85,000 Labor Cost per FTE (USD)• Labor Cost represented above is Average Median Labor Cost per FTE for Engineering Size of Talent Pool professionals across all experience levels for year 2011• Projected Labor Cost Growth Rates have been calculated using Zinnov’s proprietary forecasting model. The growth rates represented here are Cumulative Annual Growth Rates for 2012-2016 37,000 80,000 6,000• The bubble size corresponds to the relative size of the talent pool in Product Development Software + Product Development Hardware in each city Source: Zinnov Labor Cost Model Zinnov 15
  17. 17. SUMMARY - COST ESCALATION - APJBoth established and emerging locations in APJ form a cluster around USD 32,000 - USD42,000 APJ Dalian 12% Labor Salary Growth Rate (CAGR - %) Bangalore Coimbatore Xiamen Beijing Chennai Penang Chengdu 8% Hyderabad Pune Metro Manila Selangor 4% Chandigarh Taipei 0% $22,000 $32,000 $42,000 $52,000 Labor Cost per FTE (USD)• Labor Cost represented above is Average Median Labor Cost per FTE for Engineering Size of Talent Pool professionals across all experience levels for year 2011• Projected Labor Cost Growth Rates have been calculated using Zinnov’s proprietary forecasting model. The growth rates represented here are Cumulative Annual Growth Rates for 2012-2016 37,000 80,000 6,000• The bubble size corresponds to the relative size of the talent pool in Product Development Software + Product Development Hardware in each city Source: Zinnov Labor Cost Model Zinnov 16
  18. 18. SUMMARY - ENGINEERING ACTIVITY - AMERICASThe established locations in US have end-to-end product ownership with main focus onupstream activities such as conceptualization and design PDLC Heat MapConceptualization Design Development Testing Support Technical Support (Level 1 Concept Definition Feature Definition Product Development Unit/Interface Testing & 2) Component/Feature Performance Concept Evaluation Project Planning Product Maintenance Testing Benchmarking Prototype Design/ Requirement Gathering & Re-Engineering & Technical Support (Level 3 Regression Testing Architecture Analysis Migration & 4) Requirement Technology Evaluation Software Architecture Testing Automation Professional Services Management High-Level Design of Product Validation/ Prototype Development Program Management Documentation Product Concept Acceptance Prototype Validation Project Management Top Locations 1 Bay Area 1 Bay Area 1 Bay Area 1 Bay Area 1 Buenos Aires 2 Atlanta 2 Atlanta 2 Austin 2 Raleigh-Cary 2 Brasilia 3 San Diego 3 Bogota 3 Seattle 3 Seattle 3 Atlanta 4 San Diego 4 San Diego 4 Seattle 4 Seattle 4 Rio de Janeiro 5 Austin 5 Austin 5 Raleigh-Cary 5 Austin 5 Davenport 6 Los Angeles 6 Los Angeles 6 Boston 6 Atlanta 6 Santiago 7 Boston 7 Boston 7 Los Angeles 7 Pittsburgh San Jose, Costa 7 8 Vancouver 8 Vancouver 8 San Diego 8 Minneapolis Rica 8 Puerto Rico 9 Toronto 9 Toronto 9 Toronto 9 Dallas 9 Lincoln10 Raleigh-Cary 10 Raleigh-Cary 10 Dallas 10 Los Angeles 10 GuadalajaraSource: Zinnov Location and talent framework Zinnov 17
  19. 19. SUMMARY - ENGINEERING ACTIVITY - EMEAA few high cost locations have total product ownership and serve as a design center alongwith development and testing PDLC Heat MapConceptualization Design Development Testing Support Technical Support (Level 1 Concept Definition Feature Definition Product Development Unit/Interface Testing & 2) Component/Feature Performance Concept Evaluation Project Planning Product Maintenance Testing Benchmarking Prototype Design/ Requirement Gathering & Re-Engineering & Technical Support (Level 3 Regression Testing Architecture Analysis Migration & 4) Requirement Technology Evaluation Software Architecture Testing Automation Professional Services Management High-Level Design of Product Validation/ Prototype Development Program Management Documentation Product Concept Acceptance Prototype Validation Project Management Top Locations 1 Tel Aviv 1 Tel Aviv 1 Tel Aviv 1 Prague 1 Prague 2 Cambridge 2 Cambridge 2 Cambridge 2 Moscow 2 Moscow 3 Dublin 3 Dublin 3 Nice 3 Nice 3 Haifa 4 Haifa 4 Haifa 4 Nice 4 St. Petersburg 4 St. Petersburg 5 Frankfurt 5 Frankfurt 5 St. Petersburg 5 Budapest 5 Sofia 6 London 6 London 6 Munich 6 Bratislava 6 Bratislava 7 Munich 7 Munich 7 Helsinki 7 Bucharest 7 Bucharest 8 Helsinki 8 Helsinki 8 Brussels 8 RaAnana 8 RaAnana 9 Brussels 9 Brussels 9 Dublin 9 Kiev 9 Kiev10 Geneva 10 Geneva 10 Budapest 10 Warsaw 10 WarsawSource: Zinnov Location and talent framework Zinnov 18
  20. 20. SUMMARY - ENGINEERING ACTIVITY - APJTotal product ownership seldom occurs in low cost locations; majorfocus is on downstream activities such as development, testing and support PDLC Heat MapConceptualization Design Development Testing Support Technical Support (Level 1 Concept Definition Feature Definition Product Development Unit/Interface Testing & 2) Component/Feature Performance Concept Evaluation Project Planning Product Maintenance Testing Benchmarking Prototype Design/ Requirement Gathering & Re-Engineering & Technical Support (Level 3 Regression Testing Architecture Analysis Migration & 4) Requirement Technology Evaluation Software Architecture Testing Automation Professional Services Management High-Level Design of Product Validation/ Prototype Development Program Management Documentation Product Concept Acceptance Prototype Validation Project Management Top Locations 1 Tokyo 1 Tokyo 1 Bangalore 1 Bangalore 1 Pune 2 Seoul 2 Seoul 2 Beijing 2 Beijing 2 Hyderabad 3 Shanghai 3 Chennai 3 Taipei 3 Taipei 3 Seoul 4 Singapore 4 Singapore 4 Tokyo 4 Singapore 4 Penang 5 Bangalore 5 Bangalore 5 Taipei 5 Hyderabad 5 Xiamen 6 Beijing 6 Beijing 6 Shanghai 6 Selangor 6 Coimbatore 7 Hong Kong 7 Hong Kong 7 Guangzhou 7 Metro Manila 7 Colombo 8 Kawasaki 8 Kawasaki 8 Singapore 8 Hong Kong 8 Shenzhen 9 Sydney 9 Sydney 9 Sydney 9 Chengdu 9 Selangor 10 NCR 10 Dalian 10 Hochiminh CitySource: Zinnov Location and talent framework Zinnov 19
  21. 21. SUMMARY - SKILLS AVAILABILITY - AMERICASNorth America is a hub for software product development, whereas South America is fastemerging as major IT services center The area has skills available in all 3 categories Product Development - Software Product Development - Hardware Raleigh-Cary Seattle Bay Area Chicago New York Vancouver Atlanta Boston San Diego Austin Los Angeles Toronto Dallas Montreal Washington D.C. Detroit Pittsburgh Fremont Guadalajara Oklahoma City Boulder Davenport Bogota Florence Ft. Lauderdale Santiago Buenos Aires San Juan Fairfax Boise Lincoln Mexico City Lima San Jose, Brasilia Sao Paulo Wichita Honolulu IT Services Costa RicaSource: Zinnov Location and talent framework Zinnov 20
  22. 22. SUMMARY - SKILLS AVAILABILITY - EMEAWestern Europe has well established locations for software product development talent,where as eastern Europe is fast emerging as destination for IT services The area has skills available in all 3 categories Product Development - Software Product Development - Hardware Brussels Nice Frankfurt Tel Aviv Munich Cambridge Geneva Haifa Copenhagen Helsinki Moscow Budapest St. Petersburg Dublin Dubai London Bucharest Amman Ra’Anana Kharkov Prague Johannesburg Warsaw Cairo Durban Bratislava Kiev IT ServicesSource: Zinnov Location and talent framework Zinnov 21
  23. 23. SUMMARY - SKILLS AVAILABILITY - APJEstablished locations in APJ have high availability of talent in PDS and PDH, where asemerging locations are majorly focused on IT Services The area has skills available in all 3 categories Product Development - Software Product Development - Hardware Hong Kong Bangalore Beijing Taipei Chennai Seoul Singapore NCR Tokyo Sydney Pune Kawasaki Shanghai Guangzhou Hyderabad Dalian Colombo Hochiminh City Chengdu Xiamen Coimbatore Penang Shenzhen Kolkata Chandigarh Metro Manila Selangor IT ServicesSource: Zinnov Location and talent framework Zinnov 22
  24. 24. SUMMARY - R&D TALENT SUITABILITY HEAT MAP - AMERICASIn terms of overall R&D talent suitability, Bay Area, San Diego and Seattle are the mostsuitable locations Established Locations Cities Development Testing Product Management OverallAustin 4.0 3.5 4.0 3.8Atlanta 4.0 3.5 3.5 3.7Bay Area 4.5 4.5 4.5 4.5Boston 4.0 3.5 3.5 3.7Chicago 3.0 3.0 3.0 3.0Dallas 3.5 3.5 3.0 3.3Detroit 3.0 3.0 2.5 2.8Los Angeles 4.0 3.5 3.5 3.7Raleigh-Cary 4.0 4.0 3.5 3.8Minneapolis 3.5 3.5 3.0 3.3Montreal 3.0 3.0 3.0 3.0New York 3.0 3.0 3.5 3.2San Diego 4.0 4.0 4.0 4.0Seattle 4.0 4.0 4.0 4.0Toronto 3.5 3.0 3.5 3.3Vancouver 3.5 3.0 3.0 3.2Washington D.C. 3.0 3.0 3.5 3.2Source: Zinnov Location and talent framework Zinnov 23
  25. 25. SUMMARY - R&D TALENT SUITABILITY HEAT MAP - AMERICASAmongst the emerging locations, Fremont and Boulder are most suitable, closely followedby Broomfield, Pittsburgh and Davenport Emerging and Future Emergent Locations Cities Development Testing Product Management OverallBogota 1.0 3.0 0.5 1.5Boise 1.0 3.0 3.0 2.3Boulder 3.5 4.0 2.0 3.2Brasilia 1.0 3.0 0.5 1.5Broomfield 3.0 3.0 2.0 2.7Buenos Aires 1.0 3.5 1.0 1.8Pittsburgh, PA 2.0 3.5 2.0 2.5Fairfax 3.0 3.0 2.0 2.7Florence 3.0 3.0 3.0 3.0Fremont 3.0 3.5 3.5 3.3Ft. Lauderdale 2.0 3.0 1.0 2.0Guadalajara 1.0 2.0 1.0 1.3Honolulu 2.0 2.0 2.0 2.0Mexico City 1.0 2.5 0.5 1.3Oklahoma City 2.0 2.5 1.0 1.8San Jose 1.0 2.5 0.5 1.3San Juan 0.5 2.5 0.5 1.2Santiago 1.0 3.0 1.0 1.7São Paulo 1.0 3.0 1.0 1.7Davenport 2.5 3.5 2.0 2.7Guayaquil 0.5 2.0 0.5 1.0Lima 1.0 2.0 0.5 1.2Lincoln 2.5 3.0 2.0 2.5Managua 0.5 2.0 0.5 1.0Rio de Janeiro 1.0 2.5 0.5 1.3Santo Domingo 1.0 2.5 0.5 1.3Wichita 1.0 2.5 0.5 1.3Santiago de Queretaro 1.0 2.0 2.0 2.0Source: Zinnov Location and talent framework Zinnov 24
  26. 26. SUMMARY - R&D TALENT SUITABILITY HEAT MAP – EMEAIn EMEA, Israel has emerged as the top location in terms of R&D suitability, closelyfollowed by Cambridge in UK Established Locations Cities Development Testing Product Management OverallBrussels 3.5 3.0 3.0 3.2Cambridge 3.5 3.5 3.5 3.5Copenhagen 3.5 3.0 3.0 3.2Frankfurt 3.5 3.0 3.0 3.2Geneva 3.5 3.0 3.5 3.3Haifa 4.0 3.5 3.5 3.7Helsinki 3.5 3.5 3.0 3.3London 4.0 3.0 3.0 3.3Munich 3.5 3.0 3.0 3.2Nice 3.5 3.0 3.0 3.2Tel Aviv 4.0 3.5 3.5 3.7Source: Zinnov Location and talent framework Zinnov 25
  27. 27. SUMMARY - R&D TALENT SUITABILITY HEAT MAP – EMEASt. Petersburg and Moscow in Russia are fast catching up with other established locationsin development and testing Emerging and Future Emergent Locations Cities Development Testing Product Management OverallBucharest 2.5 2.5 1.5 2.2Bratislava 2.5 2.5 1.5 2.2Budapest 3.0 3.5 2.5 3.0Cairo 2.0 2.0 1.0 1.7Dubai 2.5 2.5 2.5 2.5Dublin 3.0 3.0 3.0 3.0Durban 3.0 3.0 1.5 2.5Johannesburg 3.0 2.5 1.0 2.2Amman 1.5 1.5 0.5 1.2Kiev 2.5 2.5 1.0 2.0Kharkov 2.0 2.5 0.5 1.7Moscow 3.0 3.5 3.0 3.2Prague 2.5 3.0 1.0 2.2RaAnana 3.5 3.5 3.0 3.3St. Petersburg 3.5 3.5 3.0 3.3Warsaw 2.0 2.5 0.5 1.7Sofia 1.5 2.5 1.0 1.7Source: Zinnov Location and talent framework Zinnov 26
  28. 28. SUMMARY - R&D TALENT SUITABILITY HEAT MAP – APJSeoul and Tokyo lead the overall R&D talent suitability index, closely followed by Taipei,Bangalore and Beijing Established Locations Cities Development Testing Product Management OverallBangalore 4.0 4.5 3.0 3.8Beijing 4.0 4.5 3.0 3.8Chennai 3.0 3.0 2.5 2.8Guangzhou 3.0 3.0 2.5 2.8Hong Kong 3.5 3.5 3.0 3.3Kawasaki 3.5 3.5 3.5 3.5NCR 3.0 3.0 2.5 2.8Seoul 4.0 4.0 4.0 4.0Shanghai 3.5 3.5 3.0 3.3Singapore 3.5 3.5 3.0 3.3Sydney 3.0 3.0 3.0 3.0Taipei 4.0 4.0 3.5 3.8Tokyo 4.0 4.0 4.0 4.0Source: Zinnov Location and talent framework Zinnov 27
  29. 29. SUMMARY - R&D TALENT SUITABILITY HEAT MAP – APJLow cost locations in India and China are fast emerging as hubs for development andtesting Emerging and Future Emergent Locations Cities Development Testing Product Management OverallDalian 2.5 3.0 1.5 2.3Hyderabad 3.0 3.0 2.0 2.7Pune 3.0 3.5 2.0 2.8Selangor 2.5 2.5 1.0 2.0Shenzhen 3.0 3.5 2.0 2.8Chandigarh 1.5 2.0 0.5 1.3Chengdu 2.5 3.5 1.5 2.5Coimbatore 2.0 2.5 1.0 1.8Colombo 2.0 2.0 0.5 1.5Hochiminh City 2.5 2.5 1.0 2.0Kolkata 2.0 2.0 1.0 1.7Metro Manila 2.5 2.5 1.0 2.0Penang 2.0 2.5 1.0 1.8Xiamen 2.5 3.0 1.5 2.3Source: Zinnov Location and talent framework Zinnov 28
  30. 30. SUMMARY – R&D TALENT POOL – AMERICASThe installed talent base has grown significantly in the emerging American cities in last fiveyears (1/2) R&D Talent Pool Numbers for Established Cities in Americas 8% 329,000 3.5% 241,820 3.5% 2.5% 1.5% 2.5% 8% 2.5% 76,020 71,400 27,000 49,000 43,500 50,000 66,240 64,680 46,160 9100 23,520 34,050 36,750 8240 Austin Atlanta Bay Area Boston Dallas Seattle Toronto Vancouver 2007 2011 Emerging Cities Future Emergent Cities 1.5% 13,500 12,720 5.5% 3.5% 13% 6% 2% 3% 2% 1.5% 2% 4,500 5,500 5,000 4,100 3,750 4,800 2,350 4,160 4,440 4,360 2,525 3,240 3,330 1,600 2,940 2,170 2380 1,480Buenos Aires Guadalajara Oklahoma City Santiago Pittsburgh Boulder Davenport Lima Lincoln Wichita 2007 2011 2007 2011Source: Zinnov Location and talent framework Zinnov 29
  31. 31. SUMMARY – IT SERVICES TALENT POOL – AMERICASThe installed talent base has grown significantly in the emerging American cities in last fiveyears (2/2) IT Services Talent Pool Numbers for Established Cities in Americas 4% 84,600 5% 72,320 2.4% 3% 4% 46,000 3% 1% 42,900 37,500 37,840 39,000 30,000 33,750 3% 15,000 33,320 26,650 28,850 9800 14,410 8710 Austin Atlanta Bay Area Boston Dallas Seattle Toronto Vancouver 2007 2011 Emerging Cities Future Emergent Cities 14% 18,200 2% 14% 10,775 4% 15% 8,000 10% 10,000 14% 6% 7% 6% 4,000 5,000 4,500 7,390 3,800 5,920 2,500 4,270 3,300 2,525 2,570 3,650 2,600 2,370 1,900 2000Buenos Aires Guadalajara Oklahoma City Santiago Pittsburgh Boulder Davenport Lima Lincoln Wichita 2007 2011 2007 2011Source: Zinnov Location and talent framework Zinnov 30
  32. 32. SUMMARY – R&D TALENT POOL – EMEACities in Central and Eastern European countries have emerged as major locations foroutsourcing R&D activities (1/2) R&D Talent Pool Numbers for Emerging Cities in EMEA 15% 12% 20,700 22,700 15% 17,000 11% 14,600 11% 10% 11,700 9% 12% 8,500 10% 9,700 8,000 5,270 4,500 4,670 5,700 6200 5100 3,100 3,300 3900 3500 Bucharest Bratislava Budapest Cairo Dublin Kiev Prague Moscow St. Petersburg 2007 2011 Established Cities Future Emergent Cities 5.5% 10% 13,300 10,730 5,000 3,400 Tel Aviv Sofia 2007 2011 2007 2011Source: Zinnov Location and talent framework Zinnov 31
  33. 33. SUMMARY – IT SERVICES TALENT POOL – EMEACities in Central and Eastern European countries have emerged as major locations foroutsourcing R&D activities (2/2) IT Services Talent Pool Numbers for Emerging Cities in EMEA 5% 18% 19% 30,000 27,760 33,750 29,000 14% 15,470 14,670 14,460 11% 10% 6,000 8,680 7,871 4,100 5,200 Bucharest Budapest Bratislava Cairo St. Petersburg Kiev 2007 2011 Established Cities Future Emergent Cities 4.5% 11.5% 6,800 7,800 4,400 6,540 Tel Aviv Sofia 2007 2011 2007 2011Source: Zinnov Location and talent framework Zinnov 32
  34. 34. SUMMARY – R&D TALENT POOL – APJ Bangalore (India) in APAC region has emerged as a leading location in terms of talent pool number, followed by Taipei (Taiwan) (1/2) R&D Talent Pool Numbers for Future Emergent Cities in APAC 8% 20,790 15,280 4% 10% 12% 8,390 9% 8,000 4% 6,690 7,310 4,000 5,460 4,250 500 2,830 420 Chandigarh Chengdu Coimbatore Metro Manila Penang Xiamen Established Cities Emerging Cities6% 12% 80,500 36,740 6% 7% 60,000 12%63,760 64,000 23,350 22,130 11% 47,520 48,820 10% 11% 14,060 11,500 11500 5,870 7,850 7,570 3,860 Bangalore Chennai Beijing Taipei Dalian Pune Hyderabad Selangur 2007 2011 2007 2011 Source: Zinnov Location and talent framework Zinnov 33
  35. 35. SUMMARY – IT SERVICES TALENT POOL – APJ Bangalore (India) in APAC region has emerged as a leading location in terms of talent pool number, followed by Taipei (Taiwan) (2/2) IT Services Talent Pool Numbers for Future Emergent Cities in APAC 14% 52860 20% 5% 38500 48% 15% 31,300 24000 12360 13500 20% 18,570 7,710 5500 10,170 2,650 5,000 Chandigarh Chengdu Coimbatore Metro Manila Penang Xiamen Established Cities Emerging Cities12% 7% 20% 175000 140640 21% 150000 18% 107400 91400111,210 114,430 10% 3% 16% 67,820 38000 47,140 48200 50,100 30590 33,760 32,900 16,900 Bangalore Chennai Beijing Taipei Dalian Pune Hyderabad Selangur 2007 2011 2007 2011 Source: Zinnov Location and talent framework Zinnov 34
  36. 36. SUMMARY - INNOVATION Emphasis and focus on Innovation/IP creation is increasing globally USA CHINA• Tier-2 cities in U.S, such as Boulder, are • China, having established itself as the emerging as innovation hubs. factory for the world, is fast transforming into an innovation hub.• Colorado is a hub for clean tech and IT startups. Advanced Micro labs is an • Baidu, the Chinese language search analytical instrumentation company engine, has over 75% market share in dedicated to pioneering in-line China. It directly competes with Google microchip measurements for clear and Yahoo in search market. It is listed in water markets. The company has been NASDAQ1 and has a market awarded US $2 million grants from capitalization of over US $45 billion. National Science Foundation. SOUTH AMERICA INDIA• South America is known for it’s • India is fast transforming itself from the innovation in agricultural productivity, ISRAEL back office of the world to a R&D hub. aerospace industry and offshore • Israel is well known for it’s R&D with The IT industry is moving from being petroleum production. more than double the average number of service driven to one driven by product engineers than U.S per 10,000 employees. innovation. India has over 670 MNC• Embraer is the world’s leading aircraft It is rated second only to Silicon Valley for R&D centers operating in the country. manufacturer. It has over 5,000 it’s startup ecosystem. Israel has more aircrafts operating in 92 countries. It is than 70 companies listed in NASDAQ. • MakeMyTrip is a leading Indian online also a market leader for commercial platform for travel reservations. One in jets of up to 120 seats. Similarly, Petro • A few of the successful high tech every twelve domestic flight tickets bras is another one of the leading companies from Israel that are listed in booked is from MakeMyTrip. The energy companies. NASDAQ include NICE systems, Eltek, company was recently listed in NASDAQ Comverse, ECI Telecom. and was valued at over US $1 billion. Zinnov 35 35 Source: Interviews with globalization leaders, Zinnov portfolio analysis framework, Zinnov R&D Council and Zinnov city analysis framework
  37. 37. TABLE OF CONTENTS 1 Top 100 Cities 2 Key Findings - Summary 3 City Profiles 4 Appendix - Definitions & MethodologyNote: Zinnov 36 36
  38. 38. City Profile - AtlantaAtlanta is the most populous city in the US state of Georgia, it is the cultural and economiccenter of the region City StatisticsCity Location Georgia, USACity Population 420,003Area 343 square kmOfficial Language EnglishExchange Rate NACost of Living Index* 89.8Unemployment Rate 11.6% Image Source- www.fim-medical.com Talent Availability Talent Trends, 2011Competency Availability Quality Scalability Category Talent Pool Hardware Product Development 8,500Hardware Eng. Software Product Development 67,520Software Eng. IT Services 46,000Tech Support • Employment in high tech sector contributes to aboutIT 5.2% of the overall jobs in Atlanta. • Approximately 50-60% of high tech employment inIT Services & Consulting Atlanta MSA is concentrated among large companies. High Moderate Low Note : *Index based on a scale where cost of living in New York is 100; Zinnov 37 Source: Zinnov Location and talent framework
  39. 39. City Profile - Atlanta Many companies in Atlanta have a presence in tech support and IT services sectors Established Companies IBM Infor Cloud Sherpas Tectonic Network, Inc ACS Accenture Soltech Inc Deloitte McKesson Symcor Inc Elavon, Inc Volt Information Sciences Education and Research Scenario • More than 90,000 students are enrolled in primary, secondary, and high schools in Atlanta. • Around 40,000 students are enrolled in undergraduate courses and approximately 14,000 students are enrolled in post graduate courses. • Atlanta is home to around 150 research centers which are mostly affiliated to Georgia Institute of Technology or Emory University. Accessibility, Living Conditions and Business Climate Transport Since 1999, Hartsfield- Jackson Atlanta International Airport has been the worlds busiest airport. Health Atlanta has over 13,000 physicians and 12,300 beds in 52 hospitals. Catastrophic Risks In Atlanta, tornado activity is above and earthquake activity is significantly below the nation’s average. Tech Parks/Govt. Incentives Companies that have their headquarters in Georgia (prior to Jan 1, 2009) are entitled to tax credits. Compensation Data and Other Fixed Costs Experience Median Salary (US $) Index Value0 to 3 Years 72,140 Rent 41.53 to 7 Years 95,200 Groceries 75.17 to 10 Years 115,000 Restaurant 63.9More than 10 Years 137,800 Source: Zinnov Location and talent framework Zinnov 38
  40. 40. City Profile – Bay AreaThe Bay Area is comprised of nine counties and has a skilled work force of over 3.6 millionpeople City StatisticsCity Location California, USACity Population 7,188,637Area 22,838 square km.Official Language EnglishExchange Rate NACost of Living Index* 101Unemployment Rate 10.23% Image Source- sddefenselawyers.com Talent Availability Talent Trends, 2011Competency Availability Quality Scalability Category Talent Pool Hardware Product Development 131,600Hardware Eng. Software Product Development 84,600Software Eng. IT Services 197,400Tech Support • The overall attrition in the California zone was closeIT to 16% for the year 2010 which was close to the US average.IT Services & Consulting • There is an inbound migration of talent due to unparalleled opportunities in the High Tech sector. High Moderate Low Note : *Index based on a scale where cost of living in New York is 100; Zinnov 39 Source: Zinnov Location and talent framework
  41. 41. City Profile – Bay Area Higher wage in the Bay Area has resulted in software companies moving to other locations Established Companies Hewlett-Packard Google Cisco Systems Oracle Apple eBay Juniper Networks SymantecSuper Micro Computer Yahoo Brocade Communications Adobe Systems Education and Research Scenario • The Bay Area has about 500,000 students enrolled in higher education. • 25 community colleges, 48 WASC accredited institutions and 43 state approved institutions are present in Bay Area. • The Bay Area is home to the world’s leading research universities such as Stanford and the University of California at Berkley. Accessibility, Living Conditions and Business Climate Transport San Francisco International Airport handles more than 40 million passengers &1,300 flights a day. Health The Bay Area healthcare system includes 87 hospitals, 9 medical centers and 4 university clinics Catastrophic Risks California falls under the earthquake prone zone which caused up to US $55 billion damage since 1971 Govt. Incentives Incentives like the California New Jobs Tax Credits and SEZ Payroll Expense Tax Credit exist. Compensation Data and Other Fixed Costs Experience Median Salary (US $) Index Value0 to 3 Years 82,170 Rent 953 to 7 Years 109,680 Groceries 867 to 10 Years 128,530 Restaurant 82More than 10 Years 157,100 Source: Zinnov Location and talent framework Zinnov 40
  42. 42. City Profile - BostonGreater Boston Area is the tenth largest Metropolitan Area in the United States City StatisticsCity Location Massachusetts, USACity Population 617,594Area 12,105 square km.Official Language EnglishExchange Rate NACost of Living Index* 108Unemployment Rate 6.4% Image Source- neuroinformatics2011.org Talent Availability Talent Trends, 2011Competency Availability Quality Scalability Category Talent Pool Hardware Product Development 36,250Hardware Eng. Software Product Development 35,150Software Eng. IT Services 42,900Tech Support • The average employee turn over in the NewIT England area was 13.6% per annum for the Year 2010, which was lower than U.S average of 16%.IT Services & Consulting • Hiring time has increased slightly with the drop in employment due to recession. High Moderate Low Note : *Index based on a scale where cost of living in New York is 100; Zinnov 41 Source: Zinnov Location and talent framework

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