High-tech Detects European Hot Spots(cover) Request Information |
Europe has definitely found its way onto the high-tech radar screen. And some of the biggest blips of activity have been in software and hardware development, as well as call centers and customer service centers driven by e-commerce, says Richard K. Greene, managing consultant with Ernst & Young (www.ey.com). "Those two things are actually starting to go hand in hand -- software development for e-commerce is growing tremendously," he explains. "You're seeing a lot of e-commerce industries that are proliferating back in the United States; the advertising and new companies that are coming up that are e-commerce-related are astounding. You don't see that in Europe, but those [e-commerce firms] are all going to Europe, and they're doing so now."
For software development, Greene says, the United Kingdom, France and Ireland are the strongest areas, with some activity in Belgium, Germany and the Netherlands. "Software development is still really focused on the capital cities -- London, Paris, Dublin -- and there's a clustering in Provence in France," Greene says. "But you're starting to see clusters in places like the Netherlands too."
In fact, several high-tech firms from the United States have found the United Kingdom a good starting point for their European expansion. Pennsylvania-based Net-Thing, for example, chose Chelmsford in eastern England for its first European subsidiary.
In the software development arena, both Unisys of Blue Bell, Penn., and Lexington, Mass.-based Raytheon Systems, chose the United Kingdom for their software development centers. Unisys picked Glasgow, Scotland, where it will develop and implement the next generation of IT solutions for large businesses, while Raytheon went with Londonberry, Northern Ireland, for its multimillion-dollar software development center.
The Good and the Bad
Also Europe's universities are providing well-educated, skilled labor. "There are strong universities from Edinburgh, Scotland, to Dublin, which is certainly one that is providing lots of highly educated workers to a variety of both hardware and software developers," Greene says. He adds that the quality of life in many European locations is also enough to attract the kind of skilled worker needed for high-tech industries. "France particularly uses this a great deal," he explains. "The government has supported a number of R&D centers from a variety of pharmaceuticals and software firms that have really brought a cluster of high-tech to the South of France and has proved to be a very attractive location for attracting talent."
Unfortunately, the labor markets of many European high-tech centers are tightening. To avoid the issue, Greene suggests secondary cities as viable alternatives. "Search out the secondary cities, not the capital cities, where there's a strong university presence," he explains. He cites the Utrecht area of the Netherlands; Geneva, Switzerland; Barcelona, Spain; and the area around Milan, Italy, as prime secondary cities.
For Motorola, Northern Italy seemed like everything but "secondary" for its latest European expansion. The Schaumburg, Ill.-based firm will create 500 jobs in its new $100 million European R&D center in Turin, Italy.
Geneva, on the other hand, caught the eye of Digital Island. The global provider of e-business solutions recently established its European headquarters in Geneva. Among reasons for choosing the city, say company officials, are its central location, technology-savvy work force, business-friendly government and its infrastructure.
"From our perspective, there is no more multinational, multilingual and multicultural country in the world than Switzerland," says Rapheal Oeschger, Digital Island's European managing director. "Having our European headquarters [in Geneva] helps us communicate with a diverse group of customers and develop solutions across international borders." SS
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These locations provide the key ingredients for high-tech firms to succeed. There is a presence of business partners, good educational institutions and skilled labor.