MAJORITY OF TECH INDUSTRY LEADERS EXPECT SILICON VALLEY TO BE SURPASSED AS GLOBAL TECH INNOVATION CENTER
New York, Beijing, Tokyo, London seen as becoming leading tech hubs outside Silicon Valley.
For the first time in KPMG's annual Global Technology Industry Innovation Survey, more than half of the respondents believe Silicon Valley will no longer be the technology innovation center of the world in four years. The finding is in the first of a series of reports highlighting key insights from a survey of over 740 technology industry leaders globally.
"The belief that Silicon Valley will be displaced as the leading hub underscores the continuing decentralization of technology innovation, spurred by investment in other cities and regions globally, as well as contributing factors in Silicon Valley," said Tim Zanni, KPMG Global and U.S.
Technology Leader. "Several much-discussed factors ranging from the cost-of-living to an overmatched infrastructure to questions about corporate culture are contributing to the perception that Silicon Valley may not continue to dominate tech innovation in the coming years."
Nearly 60 percent believe that it is likely or very likely that the technology innovation center of the world will move from Silicon Valley by 2023. While not specifically addressing which global city would replace Silicon Valley, in a separate question, tech industry leaders tabbed New York to become the top tech hub in addition to Silicon Valley.
High profile announcements by tech giants helped push New York, Boston and Austin up in the rankings this year. Other notable risers included Taipei and Paris.
Here are the top 15 cities outside Silicon Valley:
1. New York
12. Hong Kong
13. Washington D.C.
15. Tel Aviv
The rankings reflect the perception of technology industry leaders surveyed, and provide an interesting juxtaposition when compared to four other publicly available data-driven indices. Together, they offer additional insight into the prospects for these technology innovation hubs. For example, New York placed in the Top 2 in three of the five indices, supporting the city's position in KPMG's survey. Berlin was ranked between 11th and 18th in the five rankings, showing the most consistency and strong potential as a tech innovation hub.
At the same, time, the KPMG study shows that other countries are closing the gap on the U.S. and China in the race to be a technology innovation leader.
When considering the most promising market for tech innovation and breakthroughs that have a global impact, 23 percent of those surveyed named the U.S. compared to 34 percent in last year's report. China remained second at 17 percent compared to 26 percent a year ago, followed by the U.K. at 9 percent, with Japan ranked fourth and Singapore and India tied for fifth. The grouping of the top 5 countries is much closer than in last year's survey.
"Even when faced with pressing issues that call for funding, cities and countries are carving out significant investment to become a technology innovation hub due to an expected broad economic impact," said Zanni. "They are acting on the Nobel Prize-winning theory that investing in tech innovation, the knowledge sector and human capital will drive long-term economic growth."
About the research
The 2019 KPMG Technology Industry Innovation Survey, now in its seventh year, included responses from over 740 global leaders in the technology industry. Twelve countries were represented and seventy six percent of the respondents were C-level executives. The online survey was conducted from December 2018 to January 2019.
About KPMG LLP
KPMG LLP is the independent U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's independent member firms have 207,000 professionals working in 153 countries.
Learn more at www.kpmg.com
- Greensill research shows magnitude of funds needed by end of 2020
- $1tn for telecoms infrastructure plus $1.7tn for "Internet of Things"
- Alternative finance needed to meet funding requirements
The real cost of rolling out and implementing 5G telecoms technology across all sectors of the economies worldwide is expected to reach at least $2.7 trillion by the end of 2020, this is according to research by Greensill, the provider of working capital finance.
The telecoms sector requires an estimated $1 trillion of investment for infrastructure upgrades to accommodate 5G, a number widely accepted across the industry. Greensill's research shows, however, that the implementation of 5G across the global economy will cost far more – as much as $1.7 trillion more by the end of 2020 alone - as companies rush to assimilate the new technology into everyday products, industrials processes and infrastructure – otherwise known as "The Internet of Things."
Tony Wonfor, Greensill managing director and telecoms finance specialist says: "Spending on 5G roll out is just the thin end of the wedge. This project is actually about funding the growth of the Internet of Things and industrial connection to that." "In the automotive industry, for instance, 5G will be important for tracking components through the supply chain and in to the manufacturing process, then right through to an end product that has connectivity beyond anything we have seen so far," Wonfor adds.
Many companies are facing significant challenges in meeting these huge funding requirements as traditional banks alone cannot provide all the necessary funding. Greensill is filling the funding gap with innovations such as Supply Chain Finance, Accounts Receivable Finance and other working capital solutions.
Lex Greensill, Greensill founder and CEO, says: "Greensill counts many of the world's leading telecoms and industrial companies as clients primarily because of our success in innovating financial solutions across this space. We see our products such as handset financing and other working capital solutions as crucial to the successful roll out of 5G globally."
Greensill is the world's leading non-bank provider of working capital finance to companies globally. Founded in 2011 by Lex Greensill, the company provides businesses with alternative sources of funding, allowing them to provide suppliers with the opportunity for faster payment while at the same time preserving their own capital position.
The EMEA data center colocation market is estimated to attract investments worth around $10 billion by 2023, growing at a CAGR of approximately 8% during 2017-2023.
The electrical infrastructure segment dominated the largest market share in 2017, growing at a CAGR of more than 7% during the forecast period. The increasing focus on procurement and adoption of efficient, require less maintenance, and reduce space systems are propelling the growth of this segment in the European market. The implementation of stringent regulations about privacy and security of data processed by facilities and consumers is driving the evolution of the European data center colocation market. In April 2016, the European Union adopted the General Data Protection Regulation (GDPR), which came into effect from May 2018. The implementation of GDPR is boosting the investments and demand for colocation services across several countries in the Europe market. The rapid deployment of innovative facilities namely, modular, containerized, and POD facilities will boost revenues in the European data center colocation market.
POD facilities are a single rack of facilities systems, with power and cooling integrated to provide higher performance for data processing applications at the edge locations in the market. The exponential proliferation of internet across the Eastern European and Africa region will positively impact the European data center colocation market. The growing popularity of district heating concept across the region will transform the European data center colocation market during the forecast period. The facilities are the major consumers of power and water in the market. The process of converting the disadvantage of operating a facility in a locality to its advantage by supplying waste heat emitted by servers to cool district homes during winters is district heating.
The wholesale colocation services are the fastest growing segment in the market, at a CAGR of more than 13% during the forecast period. In 2017, various large enterprise businesses and global cloud providers were the largest users of wholesale services in the European market. The leading service providers are offering customized wholesale colocation solutions, where the pre-leased customer can work with the service provider to design and develop the facility according to the customer's IT infrastructure operational requirement. Personalization of services will boost the demand for these services in the data center colocation market in Europe.
Western Europe dominated the majority of the market share in 2017, growing at a CAGR of around 6% during the forecast period. The UK, Germany, France, Ireland, Spain, Italy, the Netherlands, Switzerland, Portugal, and Austria are the largest revenues generators in the Western European region in the EMEA market. The Nordic region occupied the second largest market share in 2017, growing at a CAGR of approximately 12% during the forecast period. The deployment of hyperscale facilities, spanning over 200,000 square feet, and rack power density of up to 40kW is propelling the growth of the Nordic region in the European market.
The EMEA data center colocation market is witnessing the expansion and construction of new facilities across the region due to the implementation of GDPR. The leading facilities operators are deploying facilities with over one million net rentable white space to service retail and wholesale facilities customers.
Some of the other prominent providers of datacenter service in the European market include T-Systems, Kepple DC, Colt DCS, TeliaSonera, Iliad Datacenter, Telefónica, Euclyde, and Interoute. The growing demand for cloud services will create new avenues for service providers operating in the market. Vendors such as Equinix has developed an estimated net rentable area of around 500,000 square feet across 14 facilities that were opened and under construction in 2017 to attract a maximum number of consumers in the market. The entrant of pure-play colocation providers will increase the level of competition in the EMEA data center colocation market during the forecast period.
Other prominent vendors in the EMEA data center colocation market consist of:
3 data, Aruba S.P.A., Atman (ATM S.A.), Basefarm (Orange Group), Bezeq International, CenturyLink (Level 3), Cyxtera Technologies, dcstar, Digiplex, Euclyde, Flexential, Fortlax, Global Connect, Green Datacenter AG, Hydro66, Iliad Data Center, Internap, Interoute (GTT Communications), IXcellerate, Keppel DC, LDeX Group, Liquid Telecommunication,LuxConnect, Mobily, Ooredoo, ST Telemedia Global Data Center (STT GDC), Switch SUPERNAP, Telehouse, Telefónica, Teraco Data Environments, Tieto, TSystems (Deutsche Telekom), Turkcell, Verne Global, VNET, and Zayo Group Holdings.