top 100 global engineering locations

Confluence 2013

Accelerating Global

Innovation 6th March 2013 Hyatt Regency Santa Clara, CA

Top 100 Global Engineering Locations

1 Zinnov

1 1 Note:

The following report is the summary of the final study on “Top 100 Global Engineering Locations” Zinnov team is still working on an exhaustive report which will be released on our web portal for public view shortly. Copyright Members are welcome to an unlimited number of copies of the materials contained within this report. Furthermore, members may copy any graphic herein for their own internal purpose. Zinnov requests only that members retain the source name/logo mark on all pages produced. Please contact our HR council account manager at +1-408-716-8432 for any help we may provide. The report herein is the property of Zinnov LLC. Beyond the membership, no copyrighted materials of Zinnov may be reproduced without prior approval. Disclaimer All the information contained in this report is obtained through discussions with industry experts, public and confidential information sources believed to be reliable. Zinnov makes no representations or warranties regarding the errors, omissions or completeness of any information contained herein and shall have no liability for the same. The report is provided solely for informational purposes and opinions must not be construed as advice, recommendations or endorsements. The reader of the report is advised to conduct an independent evaluation and form conclusions with respect to the information provided.

Zinnov Talent Practice

2 Zinnov

2 2

TABLE OF CONTENTS

Note:

Top 100 Cities 1

Key Findings - Summary 2

City Profiles 3

Appendix - Definitions & Methodology 4

100 Cities worldwide

400+ cities worldwide evaluated Deep dive

SUMMARY – APPROACH

Zinnov reviewed over 400 global cities and identified the top 100 most promising technology hubs for deep dive analysis

AMERICAS EMEA APJ

Austin New York Buenos Aires Santiago Brussels Tel Aviv Kiev Bangalore Sydney Chengdu

Atlanta San Diego Pittsburgh, PA Sao Paulo Cambridge Bucharest Kharkov Beijing Taipei Coimbatore

Bay Area Seattle Fairfax Davenport Copenhagen Bratislava Moscow Chennai Tokyo Colombo

Boston Toronto Florence Guayaquil Frankfurt Budapest Prague Guangzhou Dalian Hochiminh City

Chicago Vancouver Fremont Lima Geneva Cairo Ra'Anana Hong Kong Hyderabad Kolkata

Dallas Washington D.C.

Ft. Lauderdale Lincoln Haifa Dubai St. Petersburg Kawasaki Pune Metro Manila

Detroit Bogota Guadalajara Managua Helsinki Dublin Warsaw NCR Selangor Penang

Los Angeles Boise Honolulu Rio de Janeiro London Durban Sofia Seoul Shenzhen Xiamen

Raleigh-Cary Boulder Mexico City Santiago de Querétaro

Munich Johannesburg Shanghai Chandigarh

Minneapolis Brasilia Oklahoma City Santo Domingo Nice Amman Singapore

Montreal Broomfield San Juan Wichita

San José – Costa Rica

Cost Infrastructure Competitive Landscape

University Ecosystem

Installed/Fresh Talent Pool

Source: Focus group discussion with Zinnov clients, Zinnov R&D council, Zinnov Location and Talent Framework

Technology Depth

Type of Work

Zinnov 4

SUMMARY - TOP ENGINEERING LOCATIONS

About 45% of the top 100 cities are in the “AMERICAS REGION”

Source: Zinnov Location and Talent Framework

108,520

Established Locations

Austin Atlanta Bay Area

Boston Chicago

Dallas Detroit Los Angeles

Raleigh-Cary Minneapolis

Montreal New York San Diego

Seattle Toronto

Vancouver Washington D.C.

Locations to Emerge in Future

Davenport Lincoln Santiago de Querétaro

Guayaquil Managua Santo Domingo

Lima Rio de Janeiro Wichita

Emerging Locations

Bogota Boise

Boulder Brasilia

Broomfield Buenos Aires Pittsburgh, PA

Fairfax Florence

Fremont Ft. Lauderdale Guadalajara

Honolulu

Mexico City

Oklahoma City San Juan Santiago São Paulo San Jose, Costa Rica

Zinnov 5


About 28% of the top 100 cities are in “EMEA REGION”

Source: Zinnov Location and talent framework


Brussels Cambridge

Copenhagen Frankfurt

Geneva Haifa Helsinki London Munich

Nice Tel Aviv

Emerging Locations

Bucharest Bratislava Budapest

Cairo Dubai

Dublin Durban Johannesburg

Amman Kiev

Kharkov Moscow Prague

Ra'Anana St. Petersburg

Warsaw

Locations to Emerge in Future

Sofia

Zinnov 6


About 27% of the top 100 cities are in the “APJ REGION”



Bangalore Beijing Chennai Guangzhou Hong Kong

Kawasaki NCR Seoul Shanghai Singapore

Sydney Taipei

Tokyo

Emerging Locations

Dalian Hyderabad

Pune Selangor

Shenzhen Locations to Emerge in Future

Chandigarh

Chengdu Coimbatore

Colombo

Hochiminh City Kolkata

Metro Manila Penang Xiamen

Zinnov 7

DRIVERS

Conducive business climate and developed infrastructure along with access to highly qualified talent were the key reasons for the emergence of these 100 locations


Drivers which led to the emergence of these Locations

Access to good quality talent

Market Expansion leading to greater demand

University-Corporate partnership in research and development

Developed Infrastructure

Location Attractiveness- High Standards of Living

Drivers

High priority for innovation and IP creation

Business climate conducive for Start-ups

Focus on creating an outstanding corporate culture and work environment

Matured core business processes and high end work

Mature service provider ecosystem

8 Zinnov

8 8

TABLE OF CONTENTS

Note:

Top 100 Cities 1


City Profiles 3


Zinnov 9

SUMMARY – LABOR COST COMPARISONS

Average labor cost percentage differential between the established and emerging cost locations is highest in EMEA, approximately 86 percent

Source: Zinnov Labor cost tracker, Zinnov cost analysis modeler 2011

Average Labor Cost Differential, 2011

Established Emerging FutureEmergents

$101,100

$76,100

$53,000

33% 91%

Average Labor Cost Differential

AMERICAS


$58,200

$35,800 $29,400

63%

98%


APJ


$87,100

$46,900 $36,000

86% 142%


EMEA

Note: 1. The percentage differential is based on industry median data. Actual savings for companies will vary hugely depending on numerous factors such as percentile

positioning in the market, brand, type of work, talent pyramid structure, etc. 2. Zinnov Labor cost analysis modeler has been used to arrive at the data. All data has been gathered from historical compensation surveys, expert interviews,

discussion with HR leaders, HR council event, round table, thought leadership surveys, public and confidential information sources believed to be reliable 3. Data does not include benefits, bonuses, variable pay components, allowances, reimbursements, travel incentives, stock options, Restricted Stock Units (RSU)

and other country specific regulatory costs which are considered to be a part of the total compensation 4. The model does not take into consideration any skill specific base salary inflation, growth rate & other outlier situations which will skew the base salary data

$101,100 $87,100 $58,200

$76,100 $46,900 $35,800

$53,000 $36,000

$29,400

Americas EMEA APJ

Future Emergents

Emerging

Established

Zinnov 10


Average Engineering Labor Cost, 2011 - Americas


ESTBLISHED

Salary Austin Atlanta Bay Area Boston Chicago Dallas Detroit Los Angeles Raleigh-Cary

Engineering $97,050 $102,410 $114,250 $113,580 $110,500 $87,560 $80,000 $106,130 $88,600

Salary Minneapolis Montreal New York San Diego Seattle Toronto Vancouver Washington

D.C.

Engineering $97,850 $87,400 $121,960 $115,000 $108,000 $91,650 $88,500 $109,460

Salary Bogota Boise Boulder Brasilia Broomfield Buenos Aires Pittsburgh,

PA Fairfax Florence

Engineering $46,840 $85,500 $85,000 $65,300 85600 $37,700 $95,400 $102,100 $84,750

Salary Fremont Ft.

Lauderdale Guadalajar

a Honolulu Mexico City

Oklahoma City

San Juan Santiago São Paulo San Jose,

Costa Rica

Engineering $114,650 $97,750 $38,870 $87,300 $44,400 $83,870 $57,600 $82,860 $75,330 $29,300

EMERGING

Salary Davenport Guayaquil Lima Lincoln Managua Rio de Janeiro

Santiago de Querétaro

Santo Domingo

Wichita

Engineering $83,700 $36,400 $25,600 $76,150 $33,500 $64,200 $35,000 $45,000 $77,750

FUTURE EMERGENT

Zinnov 11


Average Engineering Labor Cost, 2011 - EMEA


ESTBLISHED

Salary Brussels Cambridge Copenhagen Dubai Frankfurt Geneva

Engineering $85,990 $85,500 $94,760 $84,200 $87,100 $85,200

Salary Haifa Helsinki London Munich Nice Tel Aviv

Engineering $84,600 $86,100 $86,000 $92,100 $87,500 $86,000

Salary Bucharest Bratislava Budapest Cairo Dublin Durban Johannesburg Amman

Engineering $37,200 $36,200 $33,680 $23,600 $70,000 $62,500 $64,500 $26,700

Salary Kiev Kharkov Moscow Prague Ra'Anana St. Petersburg Warsaw

Engineering $35,750 $46,200 $53,300 $43,300 $75,000 $46,350 $48,750

Salary Sofia

Engineering $38,000

EMERGING

FUTURE EMERGENT

Zinnov 12


Average Engineering Labor Cost, 2011 - APJ


ESTBLISHED

Salary Bangalore Beijing Chennai Guangzhou Hong Kong Kawasaki NCR

Engineering $35,000 $40,600 $32,000 $42,000 $91,500 $83,400 $34,000

Salary Seoul Shanghai Singapore Sydney Taipei Tokyo

Engineering $56,500 $40,600 $74,500 $84,600 $54,200 $87,600

Salary Dalian Hyderabad Pune Selangor Shenzhen

Engineering $38,000 $32,400 $33,100 $42,500 $39,800

Salary Chandigarh Chengdu Coimbatore Colombo

Engineering $28,500 $36,800 $29,000 $28,500

FUTURE EMERGENT

Salary Hochiminh City Kolkata Metro Manila Penang Xiamen

Engineering $31,400 $30,000 $24,700 $35,600 $36,100

EMERGING

Zinnov 13

SUMMARY - COST OF LIVING Vs. QUALITY OF LIFE

Locations in EMEA have the highest cost of living index, while the American cities lead in quality of life index


85.6 69.9 61.6

105.3 90.5

79.4


AMERICAS EMEA APJ Average Cost of Living Index Vs. Quality of Life Index, 2011

82.2 68.6 59.4

84.7 71.8 64.2


88.4 75.6 66.0

102.1

78.8 75.1


Quality of Life Index Cost of Living Index

85.6 88.4 82.2

69.9 75.6 68.6

61.6 66 59.4

Americas EMEA APJ

Established Emerging Future Emergents

105.3 102.1 84.7

90.5 78.8 71.8

79.4 75.1

64.2

Americas EMEA APJ

Cost of Living Index, 2011 Quality of Life Index, 2011

Zinnov 14

SUMMARY - COST ESCALATION - AMERICAS

From a labor cost perspective, locations in North America form a cluster around USD 80,000 – USD 100,000

Source: Zinnov Labor Cost Model

• Labor Cost represented above is Average Median Labor Cost per FTE for Engineering professionals across all experience levels for year 2011

• Projected Labor Cost Growth Rates have been calculated using Zinnov’s proprietary forecasting model. The growth rates represented here are Cumulative Annual Growth Rates for 2012-2016

• The bubble size corresponds to the relative size of the talent pool in Product Development Software + Product Development Hardware in each city

Labor Cost per FTE (USD)

AMERICAS

70,000 320,000

Size of Talent Pool

5,000

Lima

Atlanta Boulder

Boston Davenport

Dallas

Seattle Vancouver

Wichita

Toronto

Austin

Lincoln

Pittsburgh

Oklahoma City

Guadalajara Santiago

Buenos Aires

Bay Area

0%

2%

4%

6%

8%

10%

12%

14%

$20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000

Lab

or

Sala

ry G

row

th R

ate

(C

AG

R -

%)

Zinnov 15

Bucharest

Bratislava

Budapest

Sofia

Cairo

St. Petersburg

Tel Aviv

Moscow Dublin

Prague

Kiev

0%

4%

8%

12%

16%

$15,000 $25,000 $35,000 $45,000 $55,000 $65,000 $75,000 $85,000

Lab

or

Sala

ry G

row

th R

ate

(CA

GR

- %

) SUMMARY - COST ESCALATION - EMEA

Emerging locations in EMEA form a cluster around USD 32,000 – USD 52,000



EMEA

37,000 80,000 6,000




Size of Talent Pool

Zinnov 16

Taipei

Bangalore

Pune

Beijing

Hyderabad

Metro Manila

Selangor

Xiamen

Chengdu

Dalian

Coimbatore

Penang

Chandigarh

Chennai

0%

4%

8%

12%

$22,000 $32,000 $42,000 $52,000

Lab

or

Sala

ry G

row

th R

ate

(C

AG

R -

%)

SUMMARY - COST ESCALATION - APJ

Both established and emerging locations in APJ form a cluster around USD 32,000 - USD 42,000



APJ




37,000 80,000 6,000

Size of Talent Pool

Zinnov 17

SUMMARY - ENGINEERING ACTIVITY - AMERICAS

The established locations in US have end-to-end product ownership with main focus on upstream activities such as conceptualization and design


PDLC Heat Map

Conceptualization Design Development Testing Support

Prototype Design/ Architecture

Technology Evaluation

Prototype Development

Prototype Validation

Concept Definition

Concept Evaluation

Requirement Gathering & Analysis

Software Architecture

High-Level Design of Product Concept

Feature Definition

Project Planning

Re-Engineering & Migration

Requirement Management

Program Management

Product Development

Product Maintenance

Project Management

Regression Testing

Testing Automation

Product Validation/ Acceptance

Unit/Interface Testing

Component/Feature Testing

Technical Support (Level 3 & 4)

Professional Services

Documentation


Performance Benchmarking

1 Bay Area

2 Atlanta

3 Seattle

4 San Diego

5 Austin

6 Los Angeles

7 Boston

8 Vancouver

9 Toronto

10 Raleigh-Cary

1 Bay Area

2 Austin

3 Atlanta

4 Seattle

5 Raleigh-Cary

6 Boston

7 Los Angeles

8 San Diego

9 Toronto

10 Dallas

1 Bay Area

2 Atlanta

3 Seattle

4 San Diego

5 Austin

6 Los Angeles

7 Boston

8 Vancouver

9 Toronto

10 Raleigh-Cary

1 Bay Area

2 Raleigh-Cary

3 San Diego

4 Seattle

5 Austin

6 Atlanta

7 Pittsburgh

8 Minneapolis

9 Dallas

10 Los Angeles

1 Buenos Aires

2 Brasilia

3 Bogota

4 Rio de Janeiro

5 Davenport

6 Santiago

7 San Jose, Costa Rica

8 Puerto Rico

9 Lincoln

10 Guadalajara

Top Locations

Zinnov 18

SUMMARY - ENGINEERING ACTIVITY - EMEA

A few high cost locations have total product ownership and serve as a design center along with development and testing


PDLC Heat Map






Concept Definition

Concept Evaluation




Feature Definition

Project Planning



Program Management

Product Development

Product Maintenance

Project Management

Regression Testing

Testing Automation






Documentation



1 Tel Aviv

2 Cambridge

3 Nice

4 Haifa

5 Frankfurt

6 London

7 Munich

8 Helsinki

9 Brussels

10 Geneva

1 Tel Aviv

2 Cambridge

3 Haifa

4 Nice

5 St. Petersburg

6 Munich

7 Helsinki

8 Brussels

9 Dublin

10 Budapest

1 Tel Aviv

2 Cambridge

3 Nice

4 Haifa

5 Frankfurt

6 London

7 Munich

8 Helsinki

9 Brussels

10 Geneva

1 Prague

2 Moscow

3 Dublin

4 St. Petersburg

5 Budapest

6 Bratislava

7 Bucharest

8 Ra'Anana

9 Kiev

10 Warsaw

1 Prague

2 Moscow

3 Dublin

4 St. Petersburg

5 Sofia

6 Bratislava

7 Bucharest

8 Ra'Anana

9 Kiev

10 Warsaw

Top Locations

Zinnov 19

SUMMARY - ENGINEERING ACTIVITY - APJ

Total product ownership seldom occurs in low cost locations; major focus is on downstream activities such as development, testing and support


PDLC Heat Map






Concept Definition

Concept Evaluation




Feature Definition

Project Planning



Program Management

Product Development

Product Maintenance

Project Management

Regression Testing

Testing Automation






Documentation



1 Tokyo

2 Seoul

3 Taipei

4 Singapore

5 Bangalore

6 Beijing

7 Hong Kong

8 Kawasaki

9 Sydney

1 Bangalore

2 Beijing

3 Seoul

4 Tokyo

5 Taipei

6 Shanghai

7 Guangzhou

8 Singapore

9 Sydney

10 NCR

1 Tokyo

2 Seoul

3 Taipei

4 Singapore

5 Bangalore

6 Beijing

7 Hong Kong

8 Kawasaki

9 Sydney

1 Bangalore

2 Beijing

3 Shanghai

4 Singapore

5 Hyderabad

6 Selangor

7 Metro Manila

8 Hong Kong

9 Chengdu

10 Dalian

1 Pune

2 Hyderabad

3 Chennai

4 Penang

5 Xiamen

6 Coimbatore

7 Colombo

8 Shenzhen

9 Selangor

10 Hochiminh City

Top Locations

Zinnov 20

SUMMARY - SKILLS AVAILABILITY - AMERICAS

North America is a hub for software product development, whereas South America is fast emerging as major IT services center


Product Development - Software Product Development - Hardware

IT Services

Atlanta

Austin

Bay Area

Boston

Dallas

Buenos Aires

Guadalajara Oklahoma City

Seattle

Vancouver

Santiago

Davenport

Lima Lincoln

Wichita

Toronto

Pittsburgh

The area has skills available in all 3 categories

Mexico City

Chicago

Detroit

Los Angeles

Raleigh-Cary

Montreal

New York

San Diego

Washington D.C.

Bogota

Boise

Brasilia

Boulder

Fairfax

Florence

Fremont

San Juan

Sao Paulo Honolulu

Ft. Lauderdale

San Jose, Costa Rica

Zinnov 21

SUMMARY - SKILLS AVAILABILITY - EMEA

Western Europe has well established locations for software product development talent, where as eastern Europe is fast emerging as destination for IT services



IT Services

Frankfurt Tel Aviv

Bratislava

Bucharest

Cairo

Kiev

St. Petersburg


Moscow

Brussels

Cambridge

Budapest

Munich

Copenhagen

Dubai

Geneva

Haifa Helsinki

London

Nice

Prague

Warsaw

Kharkov Ra’Anana

Amman

Durban

Dublin

Johannesburg

Zinnov 22

SUMMARY - SKILLS AVAILABILITY - APJ

Established locations in APJ have high availability of talent in PDS and PDH, where as emerging locations are majorly focused on IT Services



IT Services

Bangalore Beijing

Chennai

Taipei

Dalian

Hyderabad

Pune

Selangor Chandigarh

Chengdu

Coimbatore

Metro Manila

Penang Xiamen


Seoul

Guangzhou

Hong Kong

Tokyo

Kawasaki

NCR

Shanghai

Singapore

Sydney

Shenzhen

Colombo Hochiminh City

Kolkata

Zinnov 23

SUMMARY - R&D TALENT SUITABILITY HEAT MAP - AMERICAS

In terms of overall R&D talent suitability, Bay Area, San Diego and Seattle are the most suitable locations


Cities Development Testing Product Management Overall

Austin

Atlanta

Bay Area

Boston

Chicago

Dallas

Detroit

Los Angeles

Raleigh-Cary

Minneapolis

Montreal

New York

San Diego

Seattle

Toronto

Vancouver

Washington D.C. 3.0

3.5

3.5

4.0

4.0

3.0

3.0

3.5

4.0

4.0

3.0

3.5

3.0

4.0

4.5

4.0

4.0

3.0

3.0

3.0

4.0

4.0

3.0

3.0

3.5

4.0

3.5

3.0

3.5

3.0

3.5

4.5

3.5

3.5

3.5

3.0

3.5

4.0

4.0

3.5

3.0

3.0

3.5

3.5

2.5

3.0

3.0

3.5

4.5

3.5

4.0

3.2

3.2

3.3

4.0

4.0

3.2

3.0

3.3

3.8

3.7

2.8

3.3

3.0

3.7

4.5

3.7

3.8


Zinnov 24

SUMMARY - R&D TALENT SUITABILITY HEAT MAP - AMERICAS

Amongst the emerging locations, Fremont and Boulder are most suitable, closely followed by Broomfield, Pittsburgh and Davenport



Bogota

Boise

Boulder

Brasilia

Broomfield

Buenos Aires

Pittsburgh, PA

Fairfax

Florence

Fremont

Ft. Lauderdale

Guadalajara

Honolulu

Mexico City

Oklahoma City

San Jose

San Juan

Santiago

São Paulo

Davenport

Guayaquil

Lima

Lincoln

Managua

Rio de Janeiro

Santo Domingo

Wichita

Santiago de Queretaro 1.0 1.0 1.0 1.0

0.5 2.5

1.0 0.5

2.5 1.0 1.0

0.5 1.0

2.0 1.0

2.0 1.0

2.0 3.0 3.0 3.0

2.0 1.0

3.0 1.0

3.5 1.0 1.0

2.0 2.5 2.5 2.5

2.0 3.0

2.0 2.0

3.5 3.0 3.0

2.5 2.5 2.5 2.5

2.0 2.0

3.0 3.5

3.0 3.0

3.5 3.5

3.0 3.0

4.0 3.0 3.0

2.0 0.5 0.5 0.5 0.5

2.0 0.5 0.5

2.0 1.0 1.0

0.5 0.5

1.0 0.5

2.0 1.0 1.0

3.5 3.0

2.0 2.0

1.0 2.0

0.5 2.0

3.0 0.5

2.0 1.3 1.3 1.3

1.0 2.5

1.2 1.0

2.7 1.7 1.7

1.2 1.3

1.8 1.3

2.0 1.3

2.0 3.3

3.0 2.7

2.5 1.8

2.7 1.5

3.2 2.3

1.5

Emerging and Future Emergent Locations

Zinnov 25

SUMMARY - R&D TALENT SUITABILITY HEAT MAP – EMEA

In EMEA, Israel has emerged as the top location in terms of R&D suitability, closely followed by Cambridge in UK



Brussels

Cambridge

Copenhagen

Frankfurt

Geneva

Haifa

Helsinki

London

Munich

Nice

Tel Aviv 4.0

3.5

3.5

4.0

3.5

4.0

3.5

3.5

3.5

3.5

3.5

3.5

3.0

3.0

3.0

3.5

3.5

3.0

3.0

3.0

3.5

3.0

3.5

3.0

3.0

3.0

3.0

3.5

3.5

3.0

3.0

3.5

3.0

3.7

3.2

3.2

3.3

3.3

3.7

3.3

3.2

3.2

3.5

3.2


Zinnov 26

SUMMARY - R&D TALENT SUITABILITY HEAT MAP – EMEA

St. Petersburg and Moscow in Russia are fast catching up with other established locations in development and testing



Bucharest

Bratislava

Budapest

Cairo

Dubai

Dublin

Durban

Johannesburg

Amman

Kiev

Kharkov

Moscow

Prague

Ra'Anana

St. Petersburg

Warsaw

Sofia 1.5

2.0

3.5

3.5

2.5

3.0

2.0

2.5

1.5

3.0

3.0

3.0

2.5

2.0

3.0

2.5

2.5

2.5

2.5

3.5

3.5

3.0

3.5

2.5

2.5

1.5

2.5

3.0

3.0

2.5

2.0

3.5

2.5

2.5

1.0

0.5

3.0

3.0

1.0

3.0

0.5

1.0

0.5

1.0

1.5

3.0

2.5

1.0

2.5

1.5

1.5

1.7

1.7

3.3

3.3

2.2

3.2

1.7

2.0

1.2

2.2

2.5

3.0

2.5

1.7

3.0

2.2

2.2


Zinnov 27

SUMMARY - R&D TALENT SUITABILITY HEAT MAP – APJ

Seoul and Tokyo lead the overall R&D talent suitability index, closely followed by Taipei, Bangalore and Beijing



Bangalore

Beijing

Chennai

Guangzhou

Hong Kong

Kawasaki

NCR

Seoul

Shanghai

Singapore

Sydney

Taipei

Tokyo 4.0

4.0

3.0

3.5

3.5

4.0

3.0

3.5

3.5

3.0

3.0

4.0

4.0

4.0

4.0

3.0

3.5

3.5

4.0

3.0

3.5

3.5

3.0

3.0

4.5

4.5

4.0

3.5

3.0

3.0

3.0

4.0

2.5

3.5

3.0

2.5

2.5

3.0

3.0

4.0

3.8

3.0

3.3

3.3

4.0

2.8

3.5

3.3

2.8

2.8

3.8

3.8


Zinnov 28

SUMMARY - R&D TALENT SUITABILITY HEAT MAP – APJ

Low cost locations in India and China are fast emerging as hubs for development and testing



Dalian

Hyderabad

Pune

Selangor

Shenzhen

Chandigarh

Chengdu

Coimbatore

Colombo

Hochiminh City

Kolkata

Metro Manila

Penang

Xiamen 2.5

2.0

2.5

2.0

2.5

2.0

2.0

2.5

1.5

3.0

2.5

3.0

3.0

2.5

3.0

2.5

2.5

2.0

2.5

2.0

2.5

3.5

2.0

3.5

2.5

3.5

3.0

3.0

1.5

1.0

1.0

1.0

1.0

0.5

1.0

1.5

0.5

2.0

1.0

2.0

2.0

1.5

2.3

1.8

2.0

1.7

2.0

1.5

1.8

2.5

1.3

2.8

2.0

2.8

2.7

2.3


Zinnov 29

Buenos Aires Guadalajara Oklahoma City Santiago Pittsburgh Boulder

3,240 4,160 4,440 3,330

12,720

4,360 4,100 4,500 5,500

3,750

13,500

5,000

2007 2011

SUMMARY – R&D TALENT POOL – AMERICAS

The installed talent base has grown significantly in the emerging American cities in last five years (1/2)


R&D Talent Pool Numbers for Established Cities in Americas

Austin Atlanta Bay Area Boston Dallas Seattle Toronto Vancouver

23,520 66,240

241,820

64,680 46,160 34,050 36,750 8240

27,000 76,020

329,000

71,400 49,000 43,500 50,000 9100

2007 2011

3.5%

8%

2.5% 2.5%

3.5%

2.5% 1.5%

Davenport Lima Lincoln Wichita

1,480 2,940 2,170 2380 1,600

4,800 2,350 2,525

2007 2011

2% 13% 2%

8%

3% 1.5% 6% 2%

1.5%

5.5% 3.5%

Emerging Cities Future Emergent Cities

Zinnov 30

Buenos Aires Guadalajara Oklahoma City Santiago Pittsburgh Boulder

10,775

2,370 4,270

2,570

7,390

3,650

18,200

4,000 5,000 4,500

8,000

3,800

2007 2011

SUMMARY – IT SERVICES TALENT POOL – AMERICAS

The installed talent base has grown significantly in the emerging American cities in last five years (2/2)


IT Services Talent Pool Numbers for Established Cities in Americas

Austin Atlanta Bay Area Boston Dallas Seattle Toronto Vancouver

14,410

37,840

72,320

39,000 26,650

33,320 28,850

8710

15,000

46,000

84,600

42,900 30,000

37,500 33,750

9800

2007 2011

1%

4%

3%

3%

5% 2.4%

3%

Emerging Cities

Davenport Lima Lincoln Wichita

2,600

5,920

1,900 2000 3,300

10,000

2,500 2,525

2007 2011

6%

14%

7%

Future Emergent Cities

4%

15% 6%

14%

14%

2%

4% 10%

Zinnov 31

SUMMARY – R&D TALENT POOL – EMEA

Cities in Central and Eastern European countries have emerged as major locations for outsourcing R&D activities (1/2)


R&D Talent Pool Numbers for Emerging Cities in EMEA

Tel Aviv

10,730 13,300

2007 2011

Bucharest Bratislava Budapest Cairo Dublin Kiev Prague Moscow St. Petersburg

5,270 3,100

11,700

3,300 5,700

3900 3500

14,600

9,700 8,000

4,500

20,700

4,670

8,500

6200 5100

22,700

17,000

2007 2011

10% 10%

11% 9% 12%

Sofia

3,400 5,000

2007 2011

Established Cities Future Emergent Cities

10%

11%

15% 12%

15%

5.5%

Zinnov 32

SUMMARY – IT SERVICES TALENT POOL – EMEA

Cities in Central and Eastern European countries have emerged as major locations for outsourcing R&D activities (2/2)


IT Services Talent Pool Numbers for Emerging Cities in EMEA

Tel Aviv

6,540 7,800

2007 2011

Bucharest Budapest Bratislava Cairo St. Petersburg Kiev

15,470

27,760

4,100

8,680

14,460

5,200

30,000 33,750

6,000

14,670

29,000

7,871

2007 2011

5% 19% 18%

10%

Sofia

4,400

6,800

2007 2011

Established Cities Future Emergent Cities

11.5%

14%

11%

4.5%

Zinnov 33

SUMMARY – R&D TALENT POOL – APJ

Bangalore (India) in APAC region has emerged as a leading location in terms of talent pool number, followed by Taipei (Taiwan) (1/2)


Bangalore Chennai Beijing Taipei

63,760

7,570

47,520 48,820

80,500

11500

60,000 64,000

2007 2011

R&D Talent Pool Numbers for Future Emergent Cities in APAC

Chandigarh Chengdu Coimbatore Metro Manila Penang Xiamen

420

4,250 2,830

15,280

7,310 5,460

500

6,690 4,000

20,790

8,390 8,000

8%

9% 12%

4%

10% 4%

Dalian Pune Hyderabad Selangur

3,860

23,350

14,060

7,850 5,870

36,740

22,130

11,500

2007 2011

Established Cities Emerging Cities

6%

11%

6% 7%

11%

12%

12%

10%

Zinnov 34

SUMMARY – IT SERVICES TALENT POOL – APJ

Bangalore (India) in APAC region has emerged as a leading location in terms of talent pool number, followed by Taipei (Taiwan) (2/2)


Bangalore Chennai Beijing Taipei

111,210

50,100

114,430

33,760

175000

107400

150000

38000

2007 2011

IT Services Talent Pool Numbers for Future Emergent Cities in APAC

Chandigarh Chengdu Coimbatore Metro Manila Penang Xiamen

7,710

31,300

2,650

18,570

10,170 5,000

13500

52860

5500

38500

12360 24000

20%

20%

14%

15% 48%

5%

Dalian Pune Hyderabad Selangur

16,900

67,820

47,140 32,900

30590

140640

91400

48200

2007 2011

Established Cities Emerging Cities

12%

21%

7%

3% 16%

20%

18%

10%

35 Zinnov

35 35

SUMMARY - INNOVATION

Emphasis and focus on Innovation/IP creation is increasing globally

Source: Interviews with globalization leaders, Zinnov portfolio analysis framework, Zinnov R&D Council and Zinnov city analysis framework

CHINA

• China, having established itself as the factory for the world, is fast transforming into an innovation hub.

• Baidu, the Chinese language search engine, has over 75% market share in China. It directly competes with Google and Yahoo in search market. It is listed in NASDAQ1 and has a market capitalization of over US $45 billion.

INDIA

• India is fast transforming itself from the back office of the world to a R&D hub. The IT industry is moving from being service driven to one driven by product innovation. India has over 670 MNC R&D centers operating in the country.

• MakeMyTrip is a leading Indian online platform for travel reservations. One in every twelve domestic flight tickets booked is from MakeMyTrip. The company was recently listed in NASDAQ and was valued at over US $1 billion.

ISRAEL

• Israel is well known for it’s R&D with more than double the average number of engineers than U.S per 10,000 employees. It is rated second only to Silicon Valley for it’s startup ecosystem. Israel has more than 70 companies listed in NASDAQ.

• A few of the successful high tech companies from Israel that are listed in NASDAQ include NICE systems, Eltek, Comverse, ECI Telecom.

SOUTH AMERICA

• South America is known for it’s innovation in agricultural productivity, aerospace industry and offshore petroleum production.

• Embraer is the world’s leading aircraft manufacturer. It has over 5,000 aircrafts operating in 92 countries. It is also a market leader for commercial jets of up to 120 seats. Similarly, Petro bras is another one of the leading energy companies.

USA

• Tier-2 cities in U.S, such as Boulder, are emerging as innovation hubs.

• Colorado is a hub for clean tech and IT startups. Advanced Micro labs is an analytical instrumentation company dedicated to pioneering in-line microchip measurements for clear water markets. The company has been awarded US $2 million grants from National Science Foundation.

36 Zinnov

36 36

TABLE OF CONTENTS

Note:

Top 100 Cities 1


City Profiles 3


Zinnov 37

City Profile - Atlanta

Atlanta is the most populous city in the US state of Georgia, it is the cultural and economic center of the region

Note : *Index based on a scale where cost of living in New York is 100; Source: Zinnov Location and talent framework

City Statistics

City Location Georgia, USA

City Population 420,003

Area 343 square km

Official Language English

Exchange Rate NA

Cost of Living Index* 89.8

Unemployment Rate 11.6%

Talent Availability Talent Trends, 2011

Competency Availability Quality Scalability

Hardware Eng.

Software Eng.

Tech Support

IT

IT Services & Consulting

Low Moderate High

Category Talent Pool

Hardware Product Development 8,500

Software Product Development 67,520

IT Services 46,000

• Employment in high tech sector contributes to about 5.2% of the overall jobs in Atlanta.

• Approximately 50-60% of high tech employment in Atlanta MSA is concentrated among large companies.

Image Source- www.fim-medical.com

Zinnov 38

City Profile - Atlanta

Many companies in Atlanta have a presence in tech support and IT services sectors


Established Companies

• More than 90,000 students are enrolled in primary, secondary, and high schools in Atlanta. • Around 40,000 students are enrolled in undergraduate courses and approximately 14,000 students are enrolled in post graduate

courses. • Atlanta is home to around 150 research centers which are mostly affiliated to Georgia Institute of Technology or Emory University.

Education and Research Scenario

IBM Infor Cloud Sherpas Tectonic Network, Inc

ACS Accenture Soltech Inc Deloitte

McKesson Symcor Inc Elavon, Inc Volt Information Sciences

Accessibility, Living Conditions and Business Climate

Compensation Data and Other Fixed Costs Experience Median Salary (US $)

0 to 3 Years 72,140

3 to 7 Years 95,200

7 to 10 Years 115,000

More than 10 Years 137,800

Index Value

Rent 41.5

Groceries 75.1

Restaurant 63.9

Transport Since 1999, Hartsfield- Jackson Atlanta International Airport has been the world's busiest airport.

Health Atlanta has over 13,000 physicians and 12,300 beds in 52 hospitals.

Catastrophic Risks In Atlanta, tornado activity is above and earthquake activity is significantly below the nation’s average.

Tech Parks/Govt. Incentives Companies that have their headquarters in Georgia (prior to Jan 1, 2009) are entitled to tax credits.

Zinnov 39

City Profile – Bay Area

The Bay Area is comprised of nine counties and has a skilled work force of over 3.6 million people


City Statistics

City Location California, USA

City Population 7,188,637

Area 22,838 square km.


Exchange Rate NA

Cost of Living Index* 101


Talent Availability


Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High

Image Source- sddefenselawyers.com

Talent Trends, 2011




IT Services 197,400

• The overall attrition in the California zone was close to 16% for the year 2010 which was close to the US average.

• There is an inbound migration of talent due to unparalleled opportunities in the High Tech sector.

Zinnov 40

City Profile – Bay Area

Higher wage in the Bay Area has resulted in software companies moving to other locations



• The Bay Area has about 500,000 students enrolled in higher education. • 25 community colleges, 48 WASC accredited institutions and 43 state approved institutions are present in Bay Area. • The Bay Area is home to the world’s leading research universities such as Stanford and the University of California at Berkley.


Hewlett-Packard Google Cisco Systems Oracle

Apple eBay Juniper Networks Symantec

Super Micro Computer Yahoo Brocade Communications Adobe Systems



0 to 3 Years 82,170

3 to 7 Years 109,680

7 to 10 Years 128,530


Index Value

Rent 95

Groceries 86

Restaurant 82

Transport San Francisco International Airport handles more than 40 million passengers &1,300 flights a day.

Health The Bay Area healthcare system includes 87 hospitals, 9 medical centers and 4 university clinics

Catastrophic Risks California falls under the earthquake prone zone which caused up to US $55 billion damage since 1971

Govt. Incentives Incentives like the California New Jobs Tax Credits and SEZ Payroll Expense Tax Credit exist.

Zinnov 41

City Profile - Boston

Greater Boston Area is the tenth largest Metropolitan Area in the United States


City Statistics

City Location Massachusetts, USA


Area 12,105 square km.


Exchange Rate NA



Talent Availability


Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High

Image Source- neuroinformatics2011.org

Talent Trends, 2011




IT Services 42,900

• The average employee turn over in the New England area was 13.6% per annum for the Year 2010, which was lower than U.S average of 16%.

• Hiring time has increased slightly with the drop in employment due to recession.

Zinnov 42

City Profile - Boston

Greater Boston Area has an access to highly skilled talent due to the presence of World renowned educational institutions



• There are more than 100 colleges and universities located in the Greater Boston Area, with more than 250,000 students attending college in Boston and Cambridge alone.

• There are close to 260 high schools and 220 middle schools in the Greater Boston Area. • Boston has access to talent from world renowned institutes of higher education like Harvard Business School and MIT


Hewlett-Packard Company EMC Dell Oracle

Intel Corporation AMD IBM General Electric Aviation

Boston Scientific BBN Technologies ITA Software Sun Microsystems



0 to 3 Years 80,000

3 to 7 Years 105,500

7 to 10 Years 127,300


Index Value

Rent 71

Groceries 120

Restaurants 83.2

Transport In 2010, over 27 million passengers and 300,000 flights used Logan International Airport in Boston.

Crime Boston has a high crime rate which is currently decreasing due to the efforts of the local police.

Catastrophic Risks Boston’s tornado and earthquake activity though less than the state is higher than the US average.

Govt. Incentives Businesses can receive credit for wages paid (~10%) to qualified research and development employees

Zinnov 43

City Profile - Bratislava

Bratislava is the capital of Slovakia and has a large talent pool working in IT services and BPO sector


City Statistics

City Location Southwestern Slovakia

City Population(2011 E) 488,859

Area 367.6 square km

Official Language Slovak

Exchange Rate(Sept. 2011) 0.74 Euro (EUR) per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 6,000

• The attrition in BPO services is around 13%-15%. • The attrition in IT services is lower and around 10%. • The attrition in Engineering services is very low at

4%-6%.

Image Source- http://www.msagency.sk

Zinnov 44

City Profile - Bratislava

Bratislava is the political, cultural, and economic center of the country



• Bratislava has over 70,000 students enrolled in higher education (university level). • There are more than16,000 students enrolled in engineering and 12,000 students enrolled in business studies in Bratislava. • The research and development expenditure of the Bratislava region¹ was around US $210 million in 2009. • 75% of the research and development expenditures in the Bratislava region¹ were spent on natural science and engineering in 2009.


Accenture AT&T CSC Amazon

Adastra Lenovo Datalan SAP

Alcatel Lucent IBM Henkel Slovensko Siemens IT Solutions



0 to 3 Years 16,180

3 to 7 Years 26,180

7 to 10 Years 41,250


Index Value

Rent 29.1

Groceries 58.19

Restaurant 49.4

Transport Bratislava is well connected to major European cities.

Health There are more than 18 healthcare establishments in Bratislava with more than 4,500 beds.

Catastrophic Risks Bratislava is safe from natural disasters.

Tech Parks/Govt. Incentives The Slovak government provides income tax relief to foreign firms which invest over US $6.76 million.

Zinnov 45

City Profile - Bucharest

Bucharest is a prime destination for IT and technical support services in Eastern Europe


City Statistics

City Location Southeast Romania

City Population (2011 E) 1,943,981

Area 228 square km

Official Language Romanian

Exchange Rate 3.10 Romanian Lei (RON) per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 30,000

• Attrition rates for business process outsourcing and shared service centers was between 30-40% in 2010.

• Attrition rates for older BPO centers has decreased to 20-30% on an average in 2010.

Image Source- www.stichtingwerkgroepurgenta.nL, Luventicus

Zinnov 46

City Profile - Bucharest

It is the most industrialized and economically developed city in Romania



• There are 16 public universities and 19 private universities in Bucharest. • There are 65 research institutes covering 14 specialized scientific divisions in both technical and natural sciences. • In 2009, around 400,000 students were enrolled in universities. Out of this, around 216,100 students were enrolled in state owned

universities and around 183,900 were enrolled in private universities


Adobe Microsoft Intel Capgemini

Freescale Ericsson Oracle Orange

HP SAP IBM Genpact



0 to 3 Years 19,000

3 to 7 Years 28,960

7 to 10 Years 43,400


Index Value

Rent 15.5

Groceries 44.3

Restaurants 40.5

Transport Bucharest has the largest transport network in Romania, and one of the largest in Europe.

Crime Bucharest's crime rate is rather low in comparison to other Eastern European capital cities.

Catastrophic Risks Located on a seismic fault area, Bucharest is a city prone to low intensity earthquakes.

Tech. Park Baneasa Business and Technology Park lies between the International Airport and the city center.

Zinnov 47

City Profile - Cairo

Cairo is the capital of Egypt and the largest city in the Arab world and Africa


City Statistics

City Location Northeast Egypt

City Population (2011 E) 8,495,493


Official Language Arabic

Exchange Rate 5.96 Egyptian pounds(EGP) per US $


Unemployment Rate 12%



Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 14,670

• Attrition in IT services and product dev. domains is due to brain drain of talent to other countries

• Enterprise technical support has higher turnover rate compared to customer support due to increased demand for these skills.

Image Source- Britannica, Luenticus

Zinnov 48

City Profile - Cairo

It is the prime destination for IT services and BPO sector



• The graduating pool from Egypt’s universities (~330,000 students) makes it one of the largest low cost offshore outsourcing destinations.

• There are 23 research institutes in Cairo. • Total available talent with multilingual skills was ~31,000 in 2010 in Egypt.


HP ITworx Delta Software Teleperformance

IBM Oracle Microsoft Vodafone

Mahindra Satyam EMC SySD Soft Alcatel Lucent



0 to 3 Years 11,270

3 to 7 Years 18,800

7 to 10 Years 30,700


Index Value

Rent 20.4

Groceries 52.8

Restaurants 48.8

Transport Cairo Airport served more than 15,000 aircraft movements and over 16 million passengers in 2010

Health There are around 100 hospitals and 13,000 doctors in Cairo. Air pollution causes health problems.

Catastrophic Risks At present, Egypt is under military rule of the Supreme Council of the Armed Forces.

Govt. Incentives By 2012, about 40,000 new workers are expected to be trained as per the govt. training initiative.

Zinnov 49

City Profile - Chandigarh

Chandigarh is an attractive location for voice-based BPO services


City Statistics

City Location North India

City Population(2011) 1,054,686

Area 114 square km

Official Language Hindi, Punjabi, English

Exchange Rate 50.9 Rupees (INR) per US $


Unemployment Rate(2010) 10.5%



Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High


Hardware Product Development 100

Software Product Development 400

IT Services 13,500

• The attrition rate is 30-40% for voice-based activities, and 20% for non voice-based activities.

• Attrition in the software industry is around 20-25%. This is due to the migration of fresh talent to NCR and other IT hubs in Southern India after gaining work experience.

Chandigarh

Zinnov 50

City Profile - Chandigarh

Chandigarh has a significant number of resources in the IT services sector



• Chandigarh has two renowned engineering colleges with approximately 400 students graduating every year. • Over 150 Ph.D. students graduate from the Punjab University in Chandigarh. • Chandigarh has over 150 schools affiliated to the central board of secondary education. Chandigarh has 11 primary schools, 23

secondary schools and 15 senior secondary schools.


IBM Rolta India Net Solutions Quark

Spice Telecom Bharti Airtel Simtech Care Fusion

Tech Mahindra Ericsson Damco Solutions Edifecs



0 to 3 Years 8,100

3 to 7 Years 23,240

7 to 10 Years 31,900


Index Value

Rent 7.8

Groceries 32.3

Restaurant 20.8

Transport Chandigarh is well connected domestically but does not have international flights

Health Chandigarh is ranked second in India in the primary health care index ranking.

Catastrophic Risks Chandigarh lies in Zone IV, an active region for potential earthquakes.

Tech Parks/Govt. Incentives Technology companies in SEZs are provided exemptions on corporate tax, income tax, excise tax etc.

Zinnov 51

City Profile - Chengdu

Chengdu is a major outsourcing hub in China and has attracted investments from several Fortune 500 companies in the last decade


City Statistics

City Location Sichuan, Central China

City Population (2011 E) 14.04 million

Area 12,132 square km

Official Language Mandarin

Exchange Rate 6.3 Yuan Renminbi per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 52,860

• The attrition rate in the software industry is approximately 10%.

• Due to an increasingly competitive job market, the attrition rate is expected to increase in the medium to long term.

Image Source- www.chinahighlights.com

Zinnov 52

City Profile - Chengdu

Chengdu has well developed infrastructure facilities and lower operating costs when compared to other Tier-1 cities in China



• Chengdu has over 100,000 students graduating each year. Of this number, 50,000 are in science and technology programs. • Chengdu has 42 universities. The total number of students on campus is 590,000. • Chengdu is home to 44 technical schools with 60,000 students on campus. • There are 37 national specialized laboratories and 9 national engineering research centers.


IBM HiSoft Siemens Oracle

Huawei Symantec Wipro Motorola Microsoft

Intel Neusoft Tencent NEC



0 to 3 Years 14,400

3 to 7 Years 30,300

7 to 10 Years 48,100


Index Value

Rent 10.9

Groceries 51.9

Restaurants 25.8

Transport Chengdu is well connected to major domestic and international cities across the globe.

Health There are more than 4,000 hospitals and community healthcare institutions in Chengdu.

Catastrophic Risks In 2008, the region experienced an earthquake of 7.9 magnitude on the Richter scale.

Govt. Incentives Enterprises operating within the special zones in Chengdu enjoy a favorable income tax rate of 15%.

Zinnov 53

City Profile - Chennai

Chennai has the fourth largest Gross Metropolitan Product in India


City Statistics

City Location Tamil Nadu, India

City Population(2011 E) 4,681,087

Area 174 square km

Official Language Tamil, Hindi, English






Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 107,430

• Attrition rate has increased in the BFSI vertical of IT services.

• Attrition rate in the city ranges from 15 – 23% depending on the type of work within IT services and consulting.

Image Source- wikipedia.org

Chennai, India

Zinnov 54

City Profile - Chennai

A significant number of educational institutions across various disciplines in Tamil Nadu allow ample employee base for non voice services



• Tamil Nadu offers a large talent pool of over a hundred thousand engineers from world class universities, making it a good location for the IT/BPO operations

• Chennai is home to over 15 universities thereby establishing itself as a hub for higher education • Chennai has 27 higher secondary schools, 38 high schools, 124 middle schools, 141 primary schools and 30 kindergarten schools


RBS HSBC Renault Nissan American Megatrends

Nokia Bank of New York Temenos India Pvt .Ltd. Vestas

Maersk Barclays Paypal Caterpillar



0 to 3 Years 9,800

3 to 7 Years 27,300

7 to 10 Years 37,800


Index Value

Rent 10.6

Groceries 33.5

Restaurant 19

Transport Chennai has an excellent Local, National and International Transportation System

Crime Chennai is one of the four major cities in the country that reported a lower crime rate than the state

Catastrophic Risks Chennai lies in Zone III seismic category and has experienced a few earthquakes in the past

Tech Parks/Govt. Incentives Tamil Nadu has a proactive government that is perceived to encourage growth of the IT-BPO industry

Zinnov 55

City Profile - Coimbatore

IT, financial services, retail marketing and manufacturing are the key sectors employing the majority of the talent pool in Coimbatore

Note : *Index based on a scale where cost of living in New York is 100; ** As of January 2012 Source: Zinnov Location and talent framework

City Statistics

City Location Tamil Nadu, South India


Area 105.5 sq.km.

Official Language Tamil, Hindi and English

Exchange Rate** 50.9 Rupees (INR) per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 5,500

• Attrition in the city is 15-30% lower than in developed cities but has been on the rise over the past few years due to the entry of new firms

• Around 20% of the talent employed in the IT-BPO industry goes for higher education after 2-3years of work experience


Coimbatore, India

Zinnov 56

City Profile - Coimbatore

Research institutes in Coimbatore focus on sugar, textile, clinical research and computer engineering



• Coimbatore has about 40 engineering colleges and 115 arts and science colleges are located in corporation limit. • Coimbatore has more than 30,000 engineering students and 75,000 arts and science graduates studying in various institutions. • Coimbatore has about 18 polytechnics and 36 industrial training institutes (ITI) with an annual output of 6,780 and 1,961 graduates

respectively.


Cognizant Vestige HP Cbay Systems

TCS Nous Info Systems Sierra Infosys (P) Limited Robert Bosch

Tata Elxsi Mascot Pricol Technologies CADS



0 to 3 Years 7,700

3 to 7 Years 22,600

7 to 10 Years 32,500


Index Value

Rent 8.2

Groceries 31.5

Restaurant 18.5

Transport Coimbatore international flight service is comparatively less developed than the domestic service

Health There are 103 hospitals and medical centers in and around Coimbatore with a capacity of 5000 beds.

Catastrophic Risks Coimbatore has not seen any major natural calamities and has stable climatic conditions.

Tech Parks/Govt. Incentives The Government of Tamil Nadu has given multiple incentives to the IT-BPO industry.

Zinnov 57

City Profile - Dalian

Dalian is a fast emerging city of China with a significant talent pool for IT services

Note : *Index based on a scale where cost of living in New York is 100 Source: Zinnov Location and talent framework

Regional Statistics

Region Location Liaoning, China

Region Population(2011 E) 6,310,000


Official Language Mandarin



Unemployment Rate 2.7



Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 30,590

• The attrition rate in Dalian is relatively high especially in BPO and technical /customer support areas.

• Dalian has a large talent pool of multi-lingual employees speaking Chinese, English, Japanese and Korean .

Image Source: wikipedia.org

Dalian, China

Zinnov 58

City Profile - Dalian

Dalian is managed by a municipal government that promotes the growth of the IT sector



• There are31 colleges and universities, 103 secondary vocational schools and 80 high schools in Dalian. • Universities in Dalian produce more than 20,000 IT graduates annually. • The under graduate student population in Dalian is around 250,000. • NeuSoft and other MNCs have started training centers to improve the quality of work force in Dalian.


IBM Genpact Fidelity Oracle

HP Intel NeuSoft Sanyo

Accenture SAP Cisco Siemens



0 to 3 Years 14,875

3 to 7 Years 31,400

7 to 10 Years 49,800


Index Value

Food 73

Clothing 86

Transport 28

Housing 25

Transport Dalian International Airport is the busiest in Northeast China and has several international flights.

Health There were 2.71 doctors and 5.16 hospital beds for every thousand people in 2010.

Catastrophic Risks Apart from a severe drought in 1999, Dalian has not suffered from any major incidents in its past.

Govt. Incentives Corporate income tax rate for hi-tech enterprises is at a discounted rate of 15% .

Zinnov 59

City Profile - Davenport

Davenport is ranked 15 among US cities in terms of cost of doing business by Forbes


City Statistics

City Location Iowa, USA

City Population(2011 E) 105,349

Area 168.1 square kilometers


Exchange Rate NA





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 3,300

• The attrition rate in the Midwest region of the United States is around 18%. The attrition rate in the IT sector is around 13%-15%.

• Talent pool migration is observed across the different cities of the Quad Cities region.

Image Source- www.fim-medical.com

Davenport

Zinnov 60

City Profile - Davenport

It has a large number of IT and BPO companies


Established Companies (Quad Cities)

• The Quad Cities have around 148 public schools which include 100 elementary, 25 intermediate and 23 high schools. • There are around 40 colleges and universities within a 90 mile radius of the Quad Cities. • There are around 20,000 undergraduate students and about 5,500 graduate students enrolled in universities. • In 2009, 35.6% of residents above 25 years held associates degrees, 26.7% held bachelors degrees and 7.8% held graduate degrees.


Cobham Mission Systems DRS Systems Visa International Alpine Access

Best Buy Aquent IT Solutions United Health Group AT&T

SAIC John Deere CTG Rent-A-Car



0 to 3 Years 62,300

3 to 7 Years 76,400

7 to 10 Years 92,790


Index Value

Housing 110

Healthcare 97.2

Utilities 81.5

Transportation 100.6

Transport Quad City International Airport has daily flights to Atlanta, Detroit, Chicago, Denver and Minneapolis.

Health The Genesis Medical Center has over 500 beds, 3,000 staff, 450 physicians and over 1,000 volunteers.

Catastrophic Risks Located on the banks of the Mississippi River, Davenport witnesses frequent floods.

Tech Parks/Govt. Incentives Tax credits are provided to off-set the cost incurred to locate, expand or modernize an Iowa facility.

Zinnov 61

City Profile - Guadalajara

Guadalajara is considered a "city of the future" due to its youthful population, low unemployment rate and a large number of recent foreign investments


City Statistics

City Location Jalisco, Mexico


Area 151 square km

Official Language Spanish

Exchange Rate 13.47 Mexico Pesos per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 4,000

• Companies in Guadalajara normally face an attrition rate of 5%-10%.

• For entry level IT programmers wages have stayed relatively low. The wages are between US $400 and $800 per month.

Image Source- Guadalajara Maps and Orientationa

Zinnov 62

City Profile - Guadalajara

Guadalajara is the main producer of software, electronic and digital components in Mexico



• More than 90,000 students are enrolled in primary, secondary, and high schools in Atlanta. • Around 40,000 students are enrolled in undergraduate courses and approximately 14,000 students are enrolled in post graduate

courses. • Atlanta is home to around 150 research centers which are mostly affiliated to Georgia Institute of Technology or Emory University.


IBM HP Oracle Teletech

Intel Siemens VDO TCS Continental

Freescale Accenture iGate Bank of America



0 to 3 Years 19,000

3 to 7 Years 32,500

7 to 10 Years 49,670


Index Value

Rent 12

Groceries 61

Restaurant 46.5

Transport In 2010, the airport handled 6.9 million passengers showing an increase of 7.9% from 2009.

Crime Guadalajara has relatively low crime rates however illegal drug trade and kidnapping are rampant

Catastrophic Risks Guadalajara's political and economic stability has been a positive factor in attracting investment.

Govt. Incentives Complete exemption from payroll tax is given to new companies.

Zinnov 63

City Profile - Hyderabad

Hyderabad produces the second largest pool of engineers in India and has one of the best research infrastructures within local universities

Note : *Index based on a scale where cost of living in New York is 100; ** As of January 2012 Source: Zinnov Location and talent framework

City Statistics

City Location Andhra Pradesh, India

City Population(2011 E) 4,010,238

Area 527 square km

Official Language Telugu, Hindi and English

Exchange Rate** 50.9 Rupees (INR) per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 91,400

• Competition is high which increases the tendency for employees to leave jobs for higher pay.

• A number of new companies entering Hyderabad is reducing due to the slight increase in political risks.


Hyderabad, India

Zinnov 64

City Profile - Hyderabad

Hyderabad is well connected to major international locations like London, New York and Hong Kong, with approximately 160 flights a day catering to these destinations



• The University of Hyderabad was recently ranked first within the Indian Subcontinent in the R&D arena. • Increasingly, due to its reputation as a leading IT-BPO destination, the city is attracting talent from across the country. • There are over 17 public research institutions including 3 related to nuclear energy and 4 defense research labs in the city. • There are approximately 930 degree colleges in Andhra Pradesh (AP) with around 460,000 students.


Electronic Arts JDA HSBC Virtusa

DE Shaw Teradata Franklin Templeton Wipro

GE Cordys Wells Fargo L&T Infotech



0 to 3 Years 9,700

3 to 7 Years 26,000

7 to 10 Years 38,500


Index Value

Rent 7.5

Groceries 31.3

Restaurant 19

Transport Hyderabad is well connected to major international locations with 160 flights a day

Crime In 2009, Hyderabad ranked 19th out of 35 Indian cities in crime rate.

Catastrophic Risks As per UNDP’s classification Hyderabad lies in a moderate damage risk zone for earthquakes.

Govt. Incentives The liberal government policies have played a vital role in attracting significant foreign investments.

Zinnov 65

City Profile – Kiev

Kiev is Ukraine’s largest city, both in terms of population and area. It is Ukraine’s center for business and commercial activities


City Statistics

City Location North Central Ukraine


Area 839 square km

Official Language Ukrainian

Exchange Rate 7.91 Hyrvnia (UAH) per US $



Talent Availability


Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High

Image Source- http://www-db.in.tum.de

Talent Trends, 2011




IT Services 7,870

• The salaries are 50-70% lower when compared to the US or Western Europe.

• Ukraine has a low attrition rate in IT sector when compared with other developing countries

Kiev

Zinnov 66

City Profile – Kiev

Ukraine is the fifth largest IT services exporter in the world



• Around 200,000 students enroll each year for higher education in Ukraine. The country is home to the fourth largest post-secondary graduate population in Europe.

• Scientific research is undertaken in many higher education institutes in Kiev. In addition, some institutes associated with the Ukrainian Academy of Sciences also undertake advanced research.


Wincor Nixdorf AG Lohika Hewlett Packard SAP AG

Microsoft Cisco IBS EPAM Systems

Aricent IBM GlobalLogic Ciklum



0 to 3 Years 20,000

3 to 7 Years 29,400

7 to 10 Years 40,400


Index Value

Rent 35.4

Groceries 39

Restaurant 65.5

Transport Kiev is well connected to major international locations across Europe, America and Asia.

Crime Rate The level of street crime grew by 30% in 2009 when compared to 2008.

Catastrophic Risks The political situation has been strained in the past leading to tensions in the country.

Govt. Incentives The IT outsourcing industry enjoys the benefit of 0% VAT on exporting software development services.

Zinnov 67

City Profile - Lincoln

Lincoln, along with Omaha, is a prime destination for IT services and technical support


City Statistics

City Location Nebraska, USA




Exchange Rate NA





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 2,500

• The Greater Omaha region added 17,500 jobs from 2000 to 2009.

• The competition for talent is stiff in IT and BPO industries in Lincoln and companies need to invest in attracting and retaining talent.

Image Source: bse.unl.edu

Zinnov 68

City Profile - Lincoln

The Nebraska Technology Park promotes collaboration between universities and private companies



• In Lincoln, over 38,000 people have a Bachelor’s degree and about 19,000 people have a graduate degree or higher. • Lincoln Public Schools (LPS) consist of 37 elementary schools, 11 middle schools, 6 high schools and 1 alternative high school. • LPS is renowned for providing a high quality of education. Expansion Management Magazine ranked public education in Lincoln in the

top five nationwide for quality.


Cabela’s ADP TEK systems Ameritas Life Insurance

Northrop Grumman LinkedIn Verizon Wireless American Express

Raytheon PayPal Lincoln Financial Group CSC



0 to 3 Years 54,800

3 to 7 Years 67,500

7 to 10 Years 81,500


Index Value

Rent 30.5

Groceries 79.3

Restaurant 61.3

Transport The Lincoln Municipal Airport has daily departures to Atlanta, Chicago, Denver, Minneapolis, Memphis

Crime Lincoln has less violent crimes per 100,000 people when compared to similar sized cities in the US.

Catastrophic Risks Tornado activity in Lincoln is above the Nebraska state and National average.

Govt. Incentives Businesses that perform research and experimental activities are eligible for tax credits.

Zinnov 69

City Profile – Metro Manila

Metro Manila is a prime destination for call centers, BPO and technical support


City Statistics

City Location National Capital Region, Philippines


Area 638 square km.

Official Language Filipino, English

Exchange Rate 43.2 Philippine Peso per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 38,500

• Leading BPO and tech support companies like Convergys, Stream Global Services, Sykes, SITEL and Teletech have large operations in Metro Manila.

• It has a very small base of installed talent for IT and product development.

Image Source- www.wikipedia.org

Zinnov 70

City Profile – Metro Manila

Metro Manila is well connected through two international airports



• Research activities are undertaken through university/departmental labs. • Metro Manila is home to over 200 high schools and middle schools with a total school population of 762,021. • Metro Manila is renowned for its research institutes like University of the Philippines Diliman, Philippine Nuclear Research Institute,

Southeast Asian Fisheries Development Center and National College of Public Administration and Governance


Tele Tech HTMT e Telecare Sitel

Convergys Sitel Telus Stellar Global Solutions

Accenture IBM Daksh Concentrix Corporation NCO



0 to 3 Years 7,800

3 to 7 Years 17,100

7 to 10 Years 26,000


Index Value

Rent 14.1

Groceries 40.4

Restaurant 25.5

Transport Metro Manila is well connected to major International locations

Health The crime rate in Metro Manila has reduced consistently over the last few years

Catastrophic Risks A fault system runs along metro Manila’s east boundary, making the city susceptible to earthquakes

Tech Parks/Govt. Incentives Government is promoting entrepreneurship by reducing the rate of local business taxes by 50%.

Zinnov 71

City Profile – Mexico City

Mexico City is a prime destination for IT and BPO services

Note : *Index based on a scale where cost of living in New York is 100 Source: Zinnov Location and talent framework

City Statistics

City Location Federal District, Mexico



Official Language Spanish

Exchange Rate 13.47 Mexican Pesos per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High


Engineering - R &D ~ 17,000

IT ~ 70,000

BPO ~ 150,000

• Companies in Mexico City typically face an attrition rate of 5%-10%.

• Approximately 65,000 new IT professionals graduate from universities or technical schools every year.

• Mexico’s growing software and IT services sector consists of nearly 500,000 IT professionals.

Image Source- Mexico City Maps and Orientation

Zinnov 72

City Profile – Mexico City

Mexico City contributes to approximately 21% of Mexico’s Gross Domestic Product



• Mexico City offers world-class bilingual education at primary, secondary, and tertiary levels. • Mexico City has 580 public & private universities and academic institutions. It has the highest literacy rate in the country. • Mexico City accounts for 80% of the total R&D activities in the country. • More than one-third of all the patents in the country are awarded to companies and individuals in Mexico City.


Getronics Quarksoft Intel Genpact

Hildebrando Softek Accenture Neoris

Praxis T-Systems IBM ACS



0 to 3 Years 24,000

3 to 7 Years 38,600

7 to 10 Years 55,400


Index Value

Rent 25.5

Groceries 66.34

Restaurant 50.48

Transport Mexico City is Mexico’s major transportation and shipping hub.

Health Mexico City is home to 844 hospitals and 13 national institutes of health.

Catastrophic Risks Mexico City is located in a seismic zone and prone to periodic earthquakes.

Tech Parks/Govt. Incentives The government provides a 30% tax credit for engineering & technology expenses.

Zinnov 73

City Profile – Oklahoma City

Oklahoma City is a prime destination for IT consulting and services


City Statistics

City Location Oklahoma, USA

City Population(2010) 580,000



Exchange Rate NA





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 5,000

• With over 650,000 workers and nearly 120,000 students, the region can fulfill the talent needs of any company.

• Oklahoma's CareerTech System and the Training for Industry Program (TIP) have won national recognition.

Zinnov 74

City Profile – Oklahoma City

Oklahoma City ranks as one of the least expensive cities in the country



• Total student population is around 152,000. • Around 58,000 students are enrolled in universities and colleges in and around Oklahoma City. • The city has over 17 higher education colleges, universities and community colleges. • University of Oklahoma is one of the top ten institutions in Rhodes Scholar graduates.


ACS AT&T TEKsystems FIS

American Express Cisco Kelly Services Hewlett-Packard

Apex Systems Inc SAIC IKON Office Solutions GDH Consulting



0 to 3 Years 62,730

3 to 7 Years 77,700

7 to 10 Years 92,900


Index Value

Rent 29.3

Groceries 95.4

Restaurant 60

Transport Oklahoma City is considered to be a transportation hub due to its strategic location in the US

Health Oklahoma City has one of the best healthcare systems in the country.

Catastrophic Risks Oklahoma City’s historical tornado activity is above national average.

Govt. Incentives SIP is designed to help companies looking to expand or relocate their operations in Oklahoma City.

Zinnov 75

City Profile – Penang

Penang is the second smallest state in Malaysia. It has the third-largest economy in Malaysia


Regional Statistics

Region Location Northwest Coast, Malaysia

Region Population 1,60,000

Area 1048 square km

Official Language Bahasa Malaysia, English

Exchange Rate 3.02 Malaysian Ringgits per US $



Talent Availability


Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High

Image Source- enpower.se

Talent Trends, 2011




IT Services 12,360

There is a higher concentration of R&D centers in Penang due to the close proximity to manufacturing hubs. This causes attrition in Penang to be higher when compared to Malaysia’s national levels

Zinnov 76

City Profile – Penang

The government provides incentives of 100% investment tax allowance for R&D companies with investments in the region



• In 2000, Penang had 8.9% of its population achieving tertiary level of education, and by 2010, this population grew to 22.5%. Penang has a larger educated population when compared to the other three states in the Northern Corridor Economic Region.

• The Higher Education Institutes (HEIs) include 23 public and 31 private universities


Intel JABIL Flextronics AMD

Motorola Seagate Altera MoBif

IBM Agilent Technologies PMC-Sierra Ideal Capital



0 to 3 Years 15,000

3 to 7 Years 24,900

7 to 10 Years 40,300


Index Value

Rent 19.2

Groceries 63.9

Restaurant 28.6

Transport Penang has a fully developed transport infrastructure and connectivity via air, sea, rail and road.

Health Penang has around 2,000 beds in government hospitals and also has more than 10 private hospitals.

Catastrophic Risks Penang Island was hit by the tsunami in 2004, now tsunami warning systems have been installed.

Govt. Incentives Penang has 4 Free Trade Zones (FTZs) and 4 Industrial Parks

Zinnov 77

City Profile - Pune

Pune contributes to over 10% of the total IT-BPO exports from India


City Statistics

City Location Maharashtra, India

City Population(2010 E) 3,446, 330

Area 15,643 sq km

Official Language Marathi, Hindi and English






Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 140,640

• The attrition rate in Pune is marginally lower than Bangalore.

• Migrant workers from outside the state are paid at a higher salary at entry level job positions.

Image Source- http://joshiapte.com

Zinnov 78

City Profile - Pune

Pune is one of the most attractive investment destinations in India for R&D, IT and BPO services



• More than 481,328 students enroll in the University of Pune and its affiliated colleges every year. • Out of the 481,328 students, about 83% are in undergraduate programs, 16% are in postgraduate programs and 1% are enrolled in

doctoral programs. • There are over 25 science and technology related research institutes in Pune.


TCS Tech Mahindra L&T Infotech HSBC

Infosys KPIT Accenture Bank of New York

Wipro Cognizant Cygnus Amdocs



0 to 3 Years 10,400

3 to 7 Years 27,800

7 to 10 Years 39,300


Index Value

Rent 10.5

Groceries 34.7

Restaurant 22.1

Transport Pune is well connected domestically but there are very few international flights from Pune.

Health There are around 360 hospitals within the city with the total number of beds around 6,000

Catastrophic Risks Pune lies in Zone IV seismic activity, which is the second most dangerous seismic zone in India.

Govt. Incentives The property tax will be levied on IT and ITeS units at par with residential rates (not commercial rates)

Zinnov 79

City Profile - Selangor

Selangor is a prime destination for IT and Technical Support Services in Malaysia


State Statistics

State Location West Coast- Peninsular Malaysia

State Population(2011E) 5,411,324


Official Language Malay

Exchange Rate 3.02 Malaysian Ringgits per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 48,200

In Kuala Lumpur and Cyberjaya, the attrition rates are relatively higher in the BPO and IT services driven by availability of better opportunities and steady growth of the industry. Top reasons for job change are- Salary increments and better job related perks; Global exposure opportunities


Zinnov 80

City Profile - Selangor

Selangor is an education hub with the highest number of colleges and universities in the country



• A diverse student population, both local and international, provides a cosmopolitan and multicultural environment for education in Selangor

• Out of the total 1,794 higher education institutes in Malaysia, Selangor houses the highest number of establishments (373 or 20.8%) • Selangor has more than 20 public and private universities making central Selangor the largest higher education center in Malaysia.


IBM SAP Convergys HCL

HP Oracle HSBC EDS

Wipro Ericsson Maxis Intel



0 to 3 Years 18,500

3 to 7 Years 30,700

7 to 10 Years 50,600


Index Value

Rent 19

Groceries 60

Restaurant 30

Transport Kuala Lumpur is well connected to major international cities across the globe.

Health The infant mortality rate in Selangor is 3.7 per 1,000 live births.

Catastrophic Risks Floods in Selangor are frequent and happen nearly once every year during the monsoon season.

Govt. Incentives Pioneer Status with tax exemption of 100% of its statutory income for a period of 5 years

Zinnov 81

City Profile – St. Petersburg

Over 40% of the employed population in St. Petersburg has received a higher professional education

Note : *Index based on a scale where cost of living in New York is 100; ** Working population constitutes total labor force in Atlanta Source: Zinnov Location and talent framework

City Statistics

City Location North Russia



Official Language Russian

Exchange Rate 30.48 Ruble (RUB) per US $



Talent Availability


Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High


Talent Trends, 2011




IT Services 28,960

• Moscow, closely followed by St. Petersburg are the leading locations of choice for IT companies setting up operations in Russia.

• IT Services in Russia is gaining attention due to growing domestic demand by SMBs and the government

St. Petersburg, Russia

Zinnov 82

City Profile – St. Petersburg

St. Petersburg has the largest Russian port and processes up to 60% of the exports from Russia



• Currently, there are more than 1,000 kindergartens, 700 public schools and 70 vocational schools in St. Petersburg. • The number of organizations undertaking research in the city has declined from 429 in 2007 to 354 in 2009. • There were around 90,000 people engaged in research activities in 2004, this number has declined to approximately 80,000 in 2009.


AT Software DataArt EMC Motorola

HP Devexperts EPAM Systems Nokia Siemens Network

Intel Digital Design Google Quest Software



0 to 3 Years 23,000

3 to 7 Years 36,900

7 to 10 Years 57,500


Index Value

Rent 32

Groceries 51.2

Restaurant 72.2

Transport St. Petersburg is part of the imp. transport corridor linking Scandinavia to Russia and Eastern Europe.

Health In 2010, there were 80 doctors , 100 medical personnel and 90 hospital beds per 10,000 people

Catastrophic Risks Storm surges from the gulf have caused over 300 floods in the city

SEZ Incentives Reduction of profit tax to 4.5% and tax relief on property, transportation and land tax for next 5 years.

Zinnov 83

City Profile - Taipei

Taipei is a major global center for hardware product development and technical support sectors


City Statistics

City Location North Taiwan


Area 272 square km

Official Language Mandarin - Chinese

Exchange Rate 29.8 Taiwan Dollar per US Dollar





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 38,000

• In 2010, Taiwan’s average attrition rate in the High-Tech sector was 12%.

• Taipei has a large talent pool working on design, development and manufacturing of computer hardware.

Image Source: CIA factsheet

Zinnov 84

City Profile - Taipei

Taiwan ranks high in healthcare, national security and in overall business environment



• Taipei has 27 colleges and universities, 7 medical schools, 10 large research institutes and 25 innovation driven incubators. • There are about 600,000 students studying in colleges and universities in Taipei. • About 170,000 students are enrolled in engineering programs. • English instruction is mandatory from elementary school onwards.


IBM Microsoft Samsung Accenture

HP Splashtop Intel Broadcom

Oracle Electronic Arts Evershine Service Group Nvidia



0 to 3 Years 25,500

3 to 7 Years 39,400

7 to 10 Years 54,700


Index Value

Rent 24.1

Groceries 73.9

Restaurant 26.5

Transport Taoyuan International Airport is one of the busiest airports with connectivity to major cities worldwide

Health Taiwan has 18.77 physicians and 4.96 dentists per 10,000 people.

Catastrophic Risks Taiwan is prone to typhoons and earthquakes.

Govt. Incentives Enterprises headquartered in Taipei are entitled to various forms of tax deductions.

Zinnov 85

City Profile - Toronto

More than 80% of the labor force in Toronto is employed by the services sector


City Statistics

City Location Ontario, Canada


Area 641 square kilometers

Official Language English and French

Exchange Rate 1.038 Canadian Dollar(CAD) per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 33,750

• Attrition rates in the Toronto region are around 12-13% per year.

• The demand for software engineers is expected to remain strong in the short and medium term.

Image Source: bse.unl.edu

Zinnov 86

City Profile - Toronto

Toronto has a large number of IT, BPO and technology product companies



• A total of 320,000 students are enrolled in the various universities in Toronto . • 87,000 students graduate every year from the universities/colleges in Toronto. • Toronto Region is home to over 300 research institutes that are affiliated with academic institutions, research hospitals and

corporations.


IBM Microsoft EMC CSC

HP Cisco Systems Qualcomm CGI

Accenture Capgemini Quest Software Oracle



0 to 3 Years 73,500

3 to 7 Years 84,700

7 to 10 Years 97,200


Index Value

Rent 53.5

Groceries 101.1

Restaurant 84.5

Transport Toronto Pearson International Airport is the largest and busiest airport in Canada.

Crime Toronto is one of the safest cities in North America. Crime rates are lower than other large cities.

Catastrophic Risks Toronto is relatively safe from catastrophic natural disasters.

Govt. Incentives Commercial and industrial property taxes in the City of Toronto are frozen for business investments.

Zinnov 87

City Profile - Vancouver

Over the past five years, Vancouver’s economy has consistently outpaced the Canadian economy


City Statistics

City Location British Columbia, Canada


Area 115 square km.

Official Language English, French

Exchange Rate 1.01 Canadian Dollar per US $





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 9,800

Welcoming immigration policies contribute to the quality of Vancouver’s ICT workforce, a significant factor in Microsoft’s recent decision to open a software development operation in Greater Vancouver.

Image Source- vancouverhypertension2010.com

Zinnov 88

City Profile - Vancouver

Vancouver is consistently ranked as the world’s most livable city by the Economist Intelligence Unit



• Vancouver is home to 18 high schools and 90 middle schools with a student population of 56,000. • Vancouver has 2 universities, 30 language training institutes and 58 software training institutes. • The city has a number of world renowned research institutes like University of British Columbia Farm, Simon Fraser University,

Bamfield Marine Station, TRIUMF and Peter Wall Institute for Advanced Studies


IBM Intel Broadcom SAP

Nokia Amazon CDC Kodak

Microsoft Netapp McKesson Ericsson



0 to 3 Years 69,000

3 to 7 Years 82,000

7 to 10 Years 96,500


Index Value

Rent 61.1

Groceries 109.8

Restaurant 91.8

Transport Daily International flights to Asia, Europe, Oceania, the United States, and Mexico.

Health Vancouver is among the healthiest regions in Canada with a life expectancy of 82.5.

Catastrophic Risks Vancouver has been far from any major natural disasters.

Tech Parks/Govt. Incentives The federal corporate tax rate has been reduced from 37.8 per cent in 1980 to 15 per cent by 2012

Zinnov 89

City Profile - Wichita

Wichita is the largest city in the state on Kansas


City Statistics

City Location Kansas, USA


Area 360 square km.


Exchange Rate NA





Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High




IT Services 1,650

• Salaries would increase between 6% to 9% in the year 2012.

• For the Wichita area, the Center for Economic Development and Business Research is forecasting a 0.6 percent increase in employment for 2012.

Image Source- www.world-guides.com

Zinnov 90

City Profile - Wichita

Wichita has four technical universities from which over 2500 students graduate every year



• Wichita is served by 8 unified school districts. • Over 50,000 students are enrolled in various public schools in the city. In addition to the public school districts, there are dozens of

private and parochial schools serving preschool through high school students, as well as those needing special education. • The Wichita area is served by fifteen colleges and universities including Wichita State University, Friends University etc.


Netapp Convergys ADP IHS Group

High Touch Inc. Alcatel- Lucent IBM Biztronics



0 to 3 Years 59,300

3 to 7 Years 69,100

7 to 10 Years 83,500


Index Value

Rent 23.8

Groceries 86.4

Restaurant 51.4

Transport The nearest International Airport is located in Kansas City which is 300km from Wichita.

Health Wichita offers a number of medical facilities, including hospitals and stand alone medical facilities.

Catastrophic Risks Wichita has witnessed minor tornadoes, earthquakes and floods in last few years.

Tech Parks/Govt. Incentives Kansas law offers tax deductions for companies that make qualified capital investments.

Zinnov 91

City Profile - Xiamen

Xiamen is a favored destination for BPO and IT services companies


City Statistics

City Location Fujian, China



Official Language Mandarin, Cantonese




Talent Availability


Hardware Eng.

Software Eng.

Tech Support

IT


Low Moderate High

Image Source- Xiamen Maos

Talent Trends, 2011




IT Services 24,000

• The software talent pool in Xiamen has been growing at a rapid rate (over 30% ) in the past 3 years.

• Attrition of software engineers is high in Xiamen due to a high demand in this sector.

Zinnov 92

City Profile - Xiamen

Xiamen’s world class infrastructure and favorable business climate makes it an attractive destination for foreign investments



• Xiamen has 20 universities and colleges with around 80,000 students studying in these institutions. • There are nearly 60,000 undergraduate students enrolled in Xiamen institutions at any given time. • There are 120 scientific research institutes in Xiamen with Xiamen University leading the way.


ABB Longtop Group Yamaha Motor Solutions Yamaha Motor Solutions

Anheuser Busch Jabra Fujitsu IT Services Fujitsu IT Services

Lenovo Teradata Crystal CG Crystal CG



0 to 3 Years 14,000

3 to 7 Years 29,600

7 to 10 Years 47,000


Index Cost(US $/Month)

Internet 24

Utilities 39.36

Apartment rent(per sq. mt.) 6.73

Transport Cost 15.6

Transport Xiamen’s airport has connectivity to 58 domestic and 17 international cities.

Health 1,100 health care institutions, 40 hospitals, 20 community health centers and around 80 clinics .

Catastrophic Risks Xiamen has experienced moderate earthquakes and tropical storms, but no major damages occurred

Govt. Incentives Companies developing software products are exempted from the VAT on selling those products.

93 Zinnov

93 93

TABLE OF CONTENTS

Note:

Top 100 Cities 1


City Profiles 3


94 Zinnov

94 94

Product Development Software - The software engineers employed to design and develop software products (applications and middleware) used for enterprise, desktop, embedded and mobile platforms are classified under product development software talent pool

DEFINITION - ENGINEERING

Zinnov has defined engineering function into three categories as described below

Note: Definition as per “Zinnov Talent Neuron Solution” Taxonomy

Product Development Hardware - The computer hardware engineers who are employed to design and develop hardware and software (firmware, device drivers) functions of microprocessors, microcontrollers and other Very Large Scale Integrated Circuits are classified under the product development hardware engineering talent pool

IT Services - IT Services includes a broad range of services offered in Application Development (design and development of Enterprise application), Application Maintenance (supporting application to ensure high performance), Application Management (managing application for higher performance), Application testing ( testing application for high performance) and IT Infrastructure Management Services (design and maintenance of Enterprise IT infrastructure).

Product Development

Software ENGINEERING

Product Development

Hardware

IT Services

ENGINEERING- Engineering as a function has been sub divided into 3 categories: Product development software, Product development hardware and IT services. The specialists employed for the above services fall under the engineering talent pool

95 Zinnov

95 95

DEFINITION - REGIONS

Zinnov has broadly classified the globe into 3 REGIONS for the simplicity of analysis and representations

Note: Definition as per “Zinnov Talent Neuron Solution” Taxonomy

AMERICAS REGION EMEA REGION APJ REGION

Zinnov 96

METHODOLOGY

Zinnov evaluated 400+ cities worldwide, gathered key metrics and leveraged it to identify the most promising 100 cities for engineering practice


100 Cities worldwide

400+ cities worldwide evaluated Deep dive

Cost Infrastructure Competitive Landscape

University Ecosystem

Installed/Fresh Talent Pool

Technology Depth

Type of Work

Academia

Technology Firms

Industry Experts

IT Firms Zinnov

Knowledge Repository

Recruitment Agencies

Primary & Secondary Research

Industry Associations

Government Bodies

Over the past 10 years Zinnov has built a strong network in the technology industry 40+ Fortune 500 technology

companies are members of Zinnov R&D council

Trusted knowledge partner for government bodies

Zinnov Data Sources

Zinnov 97

METHODOLOGY

Zinnov has built strategic partnerships with various industry organizations across the globe which is effectively leveraged for our studies and reports


India

China

Israel

Eastern Europe

Vietnam

Brazil

Russia

Philippines

Egypt

US

Colombia

Argentina

Costa Rica

Guatemala

http://www.bpap.org/bpap/index.asp

http://www.russoft.org/

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Zinnov 98

METHODOLOGY: R&D TALENT SUITABILITY INDEX

Zinnov’s “Suitability Index” is derived by leveraging the following methodology


𝑓 𝑍𝑖𝑛𝑛𝑜𝑣 𝑆𝑢𝑖𝑡𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝐼𝑛𝑑𝑒𝑥 =

In𝑠𝑡𝑎𝑙𝑙𝑒𝑑 𝑏𝑎𝑠𝑒 𝑜𝑓 𝑡𝑎𝑙𝑒𝑛𝑡+

𝑇𝑦𝑝𝑒 𝑎𝑛𝑑 𝑞𝑢𝑎𝑙𝑖𝑡𝑦 𝑜𝑓 𝑤𝑜𝑟𝑘 𝑏𝑒𝑖𝑛𝑔 𝑑𝑜𝑛𝑒+

𝐿𝑒𝑣𝑒𝑙 𝑜𝑓 𝑜𝑤𝑛𝑒𝑟𝑠ℎ𝑖𝑝 𝑝𝑟𝑜𝑣𝑖𝑑𝑒𝑑 𝑡𝑜 𝑡ℎ𝑒 𝑐𝑒𝑛𝑡𝑒𝑟+

𝑇𝑒𝑐ℎ𝑛𝑜𝑙𝑜𝑔𝑦 𝐶𝑎𝑝𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 𝑜𝑓 𝑡𝑎𝑙𝑒𝑛𝑡 (𝑄𝑢𝑎𝑙𝑖𝑡𝑎𝑡𝑖𝑣𝑒)+

𝐼𝑛𝑏𝑜𝑢𝑛𝑑 𝑡𝑎𝑙𝑒𝑛𝑡

• The objective is to analyze development, testing and product management activities across 100 shortlisted cities on the basis of key parameters as listed below

• A comparison rating has been provided to give a holistic view of the locations which are most suitable with respect to a specific skill set

Parameters considered to arrive at the “Zinnov Suitability Index”

Analysis Objective

Zinnov 99

DRIVERS FOR THE EMERGENCE OF SELECTED LOCATIONS

Cost and labor arbitrage along with access to emerging markets are the key drivers for shift of operations to emerging locations


Saturation of market/talent pool in developed locations

Business continuity

Rise of new competitor’s intent on becoming global

Market liberalization and privatization

Growth of global networks making countries interdependent

Lower attrition rates

Drivers Post 2000

Cost arbitrage

Access to unsaturated and skilled talent pool

Innovations/Reverse innovations

Increase in global customers due to convergence of per capita income, lifestyles

& travel

Access/proximity to customers in emerging markets

Access to growth markets

Drivers which led to the emergence of these Locations

Zinnov 100

ADVANTAGES OF EMERGING CITIES

Emerging cities across the globe offer various advantages to the Companies as compared to the established cities


Advantages offered by Tier -2 Cities across the globe

Increased Business

Continuity

Larger Catchment for

Talent Pool

Lower

Attrition

Reduced Competition

Reduced Operating Expenses

• R&D presence in Tier-2 cities increases the business continuity of the company. The company can

continue it’s operations from Tier-2 locations if the primary location fails.

• Tier -2 location like Pune in India is less prone to natural calamities and terrorist attacks than NCR

and Bangalore.

• The attrition rate in Tier-2 locations such as Selangor in Malaysia is lesser than Kuala Lumpur.

Similarly the attrition rate in Chennai is lower than Bangalore.

• The attrition rate in many Tier-2 cities can be 30% lower than Tier -1 cities.

• The competition for talent in Tier-2 cities is less than that in Tier-1 cities.

• In India, Bangalore has the highest number of MNC R&D centers (312) but the competition for

talent is very high. Pune has a good installed talent pool (96 R&D centers) but the competition for

talent is lesser than in Bangalore.

• The overall operating expenses are much lower in Tier-2 cities than in Tier-1 cities around the world.

• The operating expenses in Tier-2 locations can be as much as 30% lower than Tier-1 cities.

• The cost of living in Austin and Colorado is much cheaper than other established locations like Bay

Area and Boston.

• The company can benefit from access to larger talent pool by opening centers in Tier-2 locations.

• Tier-2 cities like St. Petersburg in Russia, Xiamen in China benefit from a large talent pool and

presence of multinational companies in the region.

Zinnov LLC

Thank You

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