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October 30, 2019

Companies Spreading Wings Beyond Silicon Valley to Crank Code

Silicon Valley is no longer the epicenter of the tech world and software development it once was. Although a lot of companies still have their headquarters in places like Palo Alto (News - Alert) or Mountain View, these companies are spreading internationally.

Many smaller companies and startups are also forming in different U.S. cities as well as in other countries and finding great success among local and international users. IT outsourcing companies can also help companies within Silicon Valley and elsewhere to get the best talent to create an atmosphere where development is no longer confined to a single location.

Tech Hubs Forming in Unexpected Places

Some notable examples of tech hubs that have formed over the years in the U.S. include Portland, Oregon, Seattle, Washington, to name a few. Many IT professionals and recent college grads are finding these cities much more desirable to live in rather than joining the rat race and facing the high living costs and traffic of Silicon Valley and the Bay Area.

However,  fresh tech hubs are luring software developers to places well outside the U.S. All around the world there is a trend for cities to start their own mini tech hubs as alternatives to Silicon Valley to cater to developers looking for something different.

Berlin is a great example. The German capital mirrors the atmosphere of San Francisco in many ways. From trendy coffee shops as well as a remote working scene, the city also has a lot of corporate offices spread around town.

Sometimes, cities in remote regions of the world or places one would not think of as viable alternatives are developing tech hubs of their own. An example of such a place is Minsk, Belarus.

It seems like a weird choice given how Belarus is perceived by some countries and international media. The country is seen as corrupt and poor, with a dictatorship that has a grip hold on everything from schooling to working environments. However, and just like it happens in places like Russia and Poland, there are a lot of good developers choosing to work in their own countries rather than moving abroad.

In fact, Minsk has a government-backed tech hub that is known as High-Tech Park. It includes more than 500 companies located within the park that are bursting with activity. Some notable software companies that came out of Belarus include the creators of World of Tanks, a massive online multiplayer game, and an AR-based clothing and jewelry apparel company called Wannaby.

Geography Is Not a Must-Have Indicator for Tech Success

Belarus shows how a tech hub can form in places no one would expect and how factors such as a stagnant talent pool and government support can make it happen. Geography and proximity to tech resources or IT-focused universities aren’t the only factors that determine the location of a tech hub.

According to Forbes' Kenrick Cai, the most important indicators include “an untapped labor market, a supply source for talent and the capacity to absorb more jobs.”

Cai quoted Colin Yasukochi, CBRE’s director of research and analysis, saying that “the amount of tech talent available in North America is very tight and limited, so employers are having to go to markets—oftentimes, small markets—to uncover new opportunities for growth, because talent and innovation can be anywhere.”

Cai also discussed a recent report by CBRE on the ways companies can score tech talent in 2019. Some takeaways from the analysis include Toronto being placed third behind San Francisco and Seattle as the most desirable city for tech talent. What factors put it there? Mainly labor costs and tech jobs available in the region.

Even U.S. cities like Detroit, Orlando, and Cleveland, which haven't traditionally been associated with tech, are marking their presence as tech hubs for developers. Just like Minsk, they are proving that a tech boom can sometimes take a strange turn and developers may simply choose to work in places no one associated with tech before.

Sometimes the talent is already there, so it only takes for companies to start forming or tech giants to take a risk and create an offshore headquarters for the talent to come out of the woodwork. Other times, the talent follows the company and unexploited developers in a place like Belarus will travel to larger cities around them like Minsk to find opportunities.

Oftentimes, companies will already find favorable conditions for a tech hub to thrive, including familiar development languages, computer hardware, and office space, but not the local talent. Countries like Japan are finding out that importing developers from, say, India, is a solution to their talent shortage while offering benefits to both their bottom lines and the developers themselves.

Other Regions to Consider

Sometimes developers lay dormant or work remotely from places that do not even consist of a tech hub. This includes cities or remote regions that have little IT presence, but where development talent can be tapped through the use of IT outsourcing companies.

An example of this is IT staffing companies that provide remote software developers out of places like South America. They allow companies in places like Silicon Valley to hire a pool of developers scaled to their needs. The flexibility and scalability of these firms allow companies that hire them to expand quickly and cut back when they need to while having access to a greater talent pool.

There are other benefits as well. Not only does the Silicon Valley tech giant not have to worry about long-term work benefits or Visa and travel requirements to accommodate the developers, but also they don’t necessarily have to open an office branch there.

Companies are no longer limited by physical space or to one location where their headquarters may be located. They can use the services of a worldwide talent pool by either bringing or importing developers to their regions or using the services of IT staffing companies to hire remote developers worldwide, thanks to a trend that’s here to stay.

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