London-based investment firm Balderton Capital has released a report dubbed “The European Talent Landscape,” highlighting statistics about the share of developers and salary trends across Europe’s most prolific startup ecosystems. The report largely restricts itself to the European Union, but includes data on other states on the continent.
“In this report, we’ve set out to identify where people working in European technology companies come from, what experience they have, and what they expect in their roles,” Balderton Partner James Wise wrote in the report, which purportedly profiles over 15,000 employees in over 1,000 companies.
The UK, Germany, and France dominate the continent in numbers people might not realize: a dominant 68 percent of all employees are working in that triad of countries, followed by Sweden (6%), the Netherlands (4%), then a tie among Spain, Finland, and Denmark (3%).
Those three countries also have nearly as many developers between their capitals (515,000) as does Silicon Valley (564,000). In parallel with that, London, Berlin, and Paris (in that order) are home to the most startups in Europe, as well as the most money invested in startups between 2011 and Q3 2016.
A familiar set of second tier ecosystems follow: Stockholm (€3.139 billion), Amsterdam (€613 million), Madrid (€499 million), and Helsinki (€451 million).
“We have learnt that the talent market in Europe can vary massively,” Balderton Partner James Wise wrote in the report. “Pay for similar roles can range by four times from Lisbon to Geneva, and seed stage companies in London are generally able to hire twice as many people as their counterparts in Berlin.”
There is a lot of moving around, with 43 percent of all workers being from outside the countries where they are working. That might skew the number of true migrants though, as only 12 percent of those workers are from outside the European Union. Additionally, 92 percent of all workers graduated from a European university.
The report does not specify whether or not the bulk of those workers might be from other European countries which are not members of the European Union (particularly tech-heavy countries like Norway and Switzerland, as well as much of the Balkans).
In terms of experience, nearly a quarter of all workers have previous experience in a startup, another quarter in more established technology companies like IBM, Nokia, Microsoft, Accenture, Rocket Internet, or Google.
Despite how the report presents it, the percentage of science, technology, engineering and math (STEM) grads per country does not really correlate with the rankings of ecosystems with the most startups, the most venture capital, or the most tech workers.
The UK and France still lead, but beyond that things change. Austria comes in third (.55% of the general population have graduated from STEM programs), then Ireland, Finland, Sweden, Portugal, and Denmark. Germany comes in ninth; the Netherlands comes in 13th place.
Developer salaries also don’t correlate. Swiss developers get $90,000 a year, Norwegians $86,000, then Denmark $75,000. After that you see the UK, Ireland, Sweden, and Germany. Of the 15 countries listed, the following four are glaringly on the outside looking in: Italy and Spain ($34,000), Greece ($25,000), and Portugal ($23,000).
Southern Europe’s vulnerability showed throughout the report. Italy (71%), Spain (70%), and Greece (69%) were in the bottom three slots for developer job satisfaction, correlating heavily with salary data.
Predictably, these countries also led the pack for developers changing jobs within the past year with Greece (41%) at the top, Portugal (40%) in second, then Spain (35%) in fourth.
Engineering managers typically make the most money of many prominent positions in the startup world. In the UK they make $100,000 a year, Germany $82,000, the Netherlands $74,000, Ireland $73,000, and France $70,000.
Sales and BizDev tend to be higher on the salary totem pole in smaller countries (Spain 1st, Sweden 1st, Ireland 2nd, Denmark 3rd), probably because there is a need to go international more quickly.
Ireland is a quandary in the report. Irish developers also faced a lot of instability, at 4th to last in job satisfaction (75%) and third in job hopping (37%). But developer salaries on average were high, in fifth place at about $66,500. They also had a high density of developers, .64% of the general population.
It could be that Irish frontend developers were weighing down the numbers, as they are the least valued employees in the positions evaluated with average salaries of $33,000 a year. Backend developers also made a comparatively low $45,000.
Forty percent of UK founders did not study in the UK. The report incorrectly says 1.27 million tech jobs are outside London (Slide 21), while it’s actually by their estimates around 947,000. The bulk of jobs are also still in England with Scotland having 101,000 slots available, Wales 43,000, and Northern Ireland 25,000.
Germans often find themselves working at a different set of major tech companies than Brits and Frenchmen: Rocket Internet, Zalando, Groupon, and McKinsey & Co, then Google. Their top five sources of graduated workers are in Berlin and Munich led by Berlin’s Humboldt University and Freie University.
What the report indicates
London still has command of startup Europe, with France and Germany clipping at the UK’s spurs. Munich is also gaining notoriety in Germany, indicating how strong the country’s multipolar startup ecosystem is.
France is often discounted in rankings, although this might be a language barrier issue as English proficiency is lower in France (one probable reason sales reps make so much there). But the opening of centers like Station F show France has enough manpower and companies to rank higher.
The Nordics are consistent performers, especially Stockholm. Helsinki is smaller, but merely in real numbers.
The real worry for Europe is in the south. Greece’s weaknesses in terms of salary and human resources are to be expected, but the struggles of Portugal, Spain, and Italy don’t bode well as those countries try to fend off a Greek economic situation. As Lisbon, Madrid, Barcelona, and Milan make names for themselves internationally, it will be correcting glaring salary gaps that ensure those ecosystems continue to grow.
Ireland has some embedded contradictions, with a high density of talent and yet a lot of people switching jobs. Startups can be found throughout the Republic and not just in Dublin, but the smaller ecosystems will still go with the ebb and flow of the capital city. Ireland has the resources to correct its salary gaps to remain competitive, something that becomes more important as London-based startups increasingly look west to stay in the EU should the UK follow through with Brexit.