Munich edges out London as Europe's top tech city

Research and development muscle puts German city ahead of Silicon Roundabout's networking skills.

News that will have the mustachioed hipsters of Shoreditch choking on their flat whites: Munich, not London, is Europe's hottest tech hub — at least according to European Commission researchers.

Munich was seen by the researchers as particularly strong in research and development, whereas London scored well for networking and access to capital.

Most of Europe's tech innovation is generated in 34 regions across 12 countries, according to the European Commission report, which scored each according to three key criteria: business activity, R&D, and IT innovation. It used 42 factors such as turnover growth, number of employees, international partnerships and networking to calculate a score for each region, with Munich topping the list, followed by east London and Paris.

Berlin, often seen as one of the top contenders for Europe's startup hotspot, languishes at number 15. Other UK cities to make the list include Cambridge in sixth place, Oxford and Edinburgh at 19 and 20 and even the regions of Berkshire, Hampshire and Surrey get a mention, most likely thanks to their strong universities.

The report The Mapping the European ICT Poles of Excellence: The Atlas of ICT Activity in Europe also listed some not-especially-surprising common ingredients for the success of a tech cluster: longstanding industrial areas with high quality educational institutions, long-term policies on research and innovation, and other historical advantages such as being capital cities.

The report also noted that you can't build these sorts of ecosystems overnight: "the current assets of each region appear to be rooted deep in time, with their current activities and profile resulting from a history several decades as regards their industrial structure, policy decisions, institutional settings, migration and education outcomes."

While politicians are keen to take the credit for the job-creation that these tech hubs offer, London's tech scene emerging where it did, for example, is the result of an unlikely combination of geographic and economic factors: an historically creative neighbourhood close to the financial district but with cheap office space and good bars. Indeed, it's already beginning to outgrow that neighbourhood, to the disappointment of some.

While Munich's R&D prowess gave it the edge, according to the researchers, the UK government is keen to position London as the startup business capital, looking to persuade fast-growing companies to base themselves and list on the London markets.

 Further reading