Balderton Capital’s research, The European Talent Landscape, is the most comprehensive survey ever undertaken for the sector in Europe. Research was completed five months after the UK population voted to leave the EU, raising fears that UK tech companies would soon face a staffing crisis as they rely heavily on pan-European recruitment. The top six cities ranked by value of investment between 2011 and 2016 are ranked below.

Europe’s tech talent – where they are, who they are and what they earn

Hiring skilled staff is the biggest challenge tech companies face across Europe and the problems posed by Brexit could reshape the map of European tech, according to in depth analysis of Europe’s tech employees by Balderton Capital, the leading venture capital investor.

Startups across Europe say that it is getting increasingly difficult to hire skilled staff. It can take up to 20 weeks to hire a senior engineer and up to 16 weeks to recruit senior non-engineering staff, causing a huge headache for fast growing companies.

Just three countries in Europe  – the UK, France and Germany – employ two-thirds of all the people that work for tech startups. The UK alone employs 31% of those who work for startups, underlining the extent to which the UK dominates the European tech scene.

London, where 40% of companies have at least one founder from overseas, is the most popular destination for job hunters looking to work abroad, according to data analysed by Balderton. However, leading venture capitalists are warning that the attractiveness of the UK to this highly mobile workforce could decline rapidly and that the high costs of hiring staff who need visas could become a significant issue should policies towards skilled workers change significantly post Brexit.

James Wise, Partner at Balderton Capital, said: “London, together with Paris and Berlin, dominate the tech scene in terms of employees and investment today. London in particular has benefitted significantly from migration, with over 40% of the tech companies founded last year having at least one non-native founder. But the relative weakness of the pound since the referendum vote, together with developer’s willingness to be mobile and work in smaller tech hubs, could reduce the relative advantage the capital enjoys without proper policy support post-Brexit.”

“The industry’s other big issue is that tech startups remain dominated by men. In 85% of startups, female workers are in a minority. Women are particularly poorly represented at the highest levels. In 73% of startups, fewer than a quarter of senior employees are women. Given the looming recruitment crisis in many tech communities, companies must urgently address how they develop female talent within their organisations.”

After the UK, the biggest tech sectors by number of people working for startups employed are in France and then Germany. The survey also reveals that there are almost as many software engineers employed in London, Paris and Berlin as there are in Silicon Valley (515,000 v 564,000). High concentrations of developers can also be found in Dublin, Amsterdam and Stockholm.

Balderton Europe’s analysis suggests that the nature of tech entrepreneurs is changing, with almost half having previously worked in a startup or a tech company. This figure shows the importance of big tech companies like Google, Facebook and Microsoft in providing the training and inspiration for the next generation of startup founders and employees.

See also: Best cities for tech students revealed by Business Fibre

Top Countries for Tech Talent

UK (London #1)

The top five universities that UK tech employees come from are The University of Cambridge, The University of Oxford, Imperial College, London, The University of Edinburgh and The University of Manchester. The leading companies that tech employees have worked for are Hewlett-Packard, IBM, Microsoft, Barclays and Yahoo.

More than 40 per cent of founders of UK tech companies did not study in the UK. The leading universities for founders who studied abroad are: INSEAD, Harvard Business School, HEC Paris, University of Pennsylvania and Wharton Business School. In comparison, just 22% of US founders come from outside that country.

According to Tech City UK’s Tech Nation 2016 report there are 1.56 million people employed in the UK tech sector, of which 1.27 million jobs are outside London.

The UK is the fourth best paying location for tech jobs in Europe, with average salaries in the sector at $70,000. Engineering managers are the highest paid across the sector, receiving on average $100,000 while DevOps (development and operations specialists) come up second highest with somewhat lower average salaries of $73,000. Content creators are the lowest paid employees with average salaries of $49,000.

There has been a slight dip in job postings from the UK, since the Brexit referendum, but the number of searches was higher following the vote than it was in the months running up to it.

Almost a third (32 per cent) of UK developers have changed their job in the last year, despite 79 per cent saying that they are satisfied with their job. The UK ranks at the mid-point amongst European countries for developer job satisfaction. Overall, nearly 4 out of 5 European developers say they love their job, which compares favourably to other professions and industries.

Germany (Berlin #2)

Germany’s capital Berlin is the second most important tech city in Europe, after London. Berlin has received €6579 million in investment since the beginning of 2011 and 18% of all startup employees in Europe work in Berlin. Germany is also the country which is facing the biggest talent crisis, according to Balderton’s research. While there are 8.6 tech jobs posted per million in Germany, there are just 3.1 million searches, per million. This is the biggest gap between job postings and searches of all European countries. The next biggest gaps are in Sweden and Spain.

German tech workers are paid at about the mid-point for Europe, with the average salary at $58,176, someway behind the UK ($70,500) and ahead of France ($47,213). However, in Germany an engineering manager receives an average salary of $82,000, while a full stack developer receives on average $61,000.

Most tech workers in Germany who have arrived in the industry straight from university come from Humboldt University of Berlin, Freie Universität in Berlin, the Technical University in Munich, the Technische Universität in Berlin and the Ludwig-Maximilians Universität in Munich.

The main companies that tech staff have worked for are Rocket Internet, Zalando, Groupon, McKinsey and Google.

France (Paris #3)

France  is the third most significant country for the tech sector in Europe, by number of startups and by investment. Since Q1 in 2011 and Q3 2016, some €4580 million has been invested in its tech sector.

The top five universities that French employees come from are HEC Paris, the Université Paris Dauphine, the University of Paris I: Panthéon-Sorbonne, Telecom ParisTech and EPITECH – European Institute of Technology. The main companies that French tech employees have worked for are Orange, Alcatel Lucent, Google, Motorola and Microsoft.

Specialists in growth hacking are the best paid tech workers in French startups, with average salaries of $70,000, surpassing data scientists who receive on average $64,000. The average salary of French tech workers is $47,213. France has the second most STEM graduates in Europe, in the 20-29 age group, beaten marginally by the UK.

Sweden (Stockholm #4)

Stockholm is the fourth biggest tech hub in Europe by value of investment received in the last five years and also by the proportion of European tech workers (6%) who are based there. However, the Swedish capital has a smaller number of startups than Amsterdam, Barcelona and Madrid.

Sweden also has one of the biggest skills problems in Europe, in that it has the third highest number of jobs posted (after the UK and Germany), it has very few searches. However, Stockholm beats London, Berlin and (only just) Paris for the density of developers that work there. Stockholm has the highest proportion of developers among its tech community across all European ecosystems.

The average salary for a tech worker in Sweden is $59,011 which lags the UK, Ireland, Switzerland and other Scandinavian countries significantly. UI/UX workers receive the highest rewards, with average salaries of $73,000, while engineering managers receive $50,000 on average.

The universities that supply most of the tech workers directly are Stockholm University, KTH Royal Institute of Technology, Uppsala University, Lund University and then Stockholm School of Economics. The top companies that tech workers in Sweden have previously worked for are Ericson, Spotify, Sony Mobile, Nordnet Bank and Microsoft.

Netherlands (Amsterdam #5)

Amsterdam is the fourth biggest tech hub in Europe, by number of startups. However, Amsterdam is only the fifth biggest tech hub, after Stockholm, by investment. Amsterdam has received only €613 million in investment since the start of 2011, some way behind Stockholm which has received $3139 million. The Netherlands has 4 per cent of total European startup workers, also ranking it in fifth place. Amsterdam also boasts a reasonably high density of developers amongst its tech workers at 0.61 per cent.

Universities that supply the most Dutch tech workers are the University of Amsterdam, then VU University Amsterdam, the University of Groningen, the Delft University of Technology and the Amsterdam University of Applied Sciences. Dutch tech workers who have moved from companies come predominantly from Microsoft, Philips, GE Healthcare, Hewlett-Packard and PayPal.

The highest paid tech work on average in the Netherlands is an engineering manager, who can make $74,000, with the lowest paid a designer receiving on average $47,0000. The average salary for all Dutch tech workers is $53,889.

Spain (Madrid #6)

Spain’s ranking among European tech hubs is boosted by Barcelona and Madrid, which are the 5th and 6th leading tech cities, by number of startups. Madrid ranks 6th in Europe on investment grounds, having received €499 million worth of investment since 2011. Spain employs 3 per cent of all of the people who work in European startups.

Tech workers in Spanish startups come directly from the Universitat Politècnica de Catalunya, Universitat Autònoma de Barcelona, Universitat de Barcelona, Universitat Pompeu Fabra and ESADE Business & Law School. The main companies Spanish tech employees have worked for are Softonic, Telefonica, Oesia, Pricewaterhouse-Coopers and Siemens.

The highest paid tech worker in Spain is a data scientist, making on average $56,000. Across the whole tech sector, the average salary in Spain is $34,229, reflecting the economic difficulties of the wider Spanish economy.

Next-tier start-up cities in Europe

The following countries have significant tech sectors and the cities of Dublin and Copenhagen are notable challengers to the top six tech cities in Europe, based on the number of startups each has:

Ireland

Dublin has the eighth most startups in Europe yet ranks quite lowly in investment terms and is the 10th leading European tech city on proportion of startup tech workers.

Tech workers in Irish startups come directly from Dublin City University, from University College Dublin, from Dublin Institute of Technology, from Trinity College Dublin and Dublin Business School. The main companies from which tech workers move are Vodafone, Ericsson, Citi, Olympus Biotech International and Google, incidentally all companies that have their headquarters in other countries.

Irish tech workers receive average salaries of $66,522, putting them amongst the top half of European countries for pay. UI/UX designers can earn $73,000 on average, while engineering managers receive $42,000 on average.

Denmark

Copenhagen is the 9th ranked city in Europe for tech startups, by numbers of start-ups.

Workers in Danish tech startups come largely from Copenhagen Business School, Aarhus University, Kaunas University of Technology, Vilnius Gediminas Technical University and Aalborg Universitet. The top companies from which Danish startup staff are hired are Microsoft, Barclays, Google, TWO NIL and Nokia.

Danish tech workers are the third highest paid in Europe, earning $75,758 on average reflecting the high standards of living and high pay in that country. A full stack developer is at the highest end of the pay spectrum, earning $80,000 on average, while an engineering manager brings up the rear with $62,000 on average.

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