Over the last few decades, startups have evolved from a buzzword to a business model of choice, flocked to by younger and older professionals alike. Among the many benefits of working in startups, these fledgling companies can offer shares, enthusiastic workforces, and lots of responsibility and ownership. Along with the benefits for individual employees, cities can greatly benefit from these businesses. Several locations have become magnets for startups, allowing both new business ecosystems and the local economy to flourish.
At Nestpick, we help professionals source fully furnished accommodation as they move to a new city. Having looked at booking patterns via our platform, it appears that startups are one of the largest catalysts for professionals moving to larger cities. With this in mind, we decided to research the best cities for those looking to work in startups, to help individuals make an educated decision on where they will have the best quality of life and keep more of their earnings.
We began by researching hundreds of locations across the world and selected 85 of the world’s most dynamic startup cities. These ranged from quintessential startup hubs such as San Francisco, to cities leading the way in the digitalisation of their continents, such as Lagos, Nigeria. In this way, we ensured that the results included international representation. The ranking is divided into 5 categories: Startup Ecosystem, Salary, Social Security & Benefits, Cost of Living, and Quality of Life. This comprehensive research provides the basis for an informed decision about the best cities to settle in as a startup professional.
“Certain cities may offer bigger paychecks, but after considering taxes and living expenses, the return may not be so high. Similarly, professionals should consider quality of life: will vacation days be adequate to visit home? Is healthcare as accessible as you would like it to be?” comments Ömer Kücükdere, Managing Director of Nestpick. “We believe that time taken researching potential employers should not overshadow understanding the best cities in which to work. We hope that our study helps those looking to work in startups identify the cities which may best suit their needs.”
Southeast Asia has a strong presence on this list. Fortunately, Nestpick also offers furnished apartments in some of these locations. Keep in mind that apartments for rent in Singapore can be quite expensive, as the cost of living is high. Seoul apartments are a bit more manageable price-wise, however are considered affordable on a tech-industry salary.
|Location||Startup||PM Salary||Tech Salary||Marketing Salary||Social Security & Benefits||Cost Of Living||Quality of Living|
Final scores were calculated by category according to the following proportions:
Some cities have innovation in their DNA.
The Startup Ecosystem score was calculated based on the 2thinknow 2016-2017 Innovation Cities Index, Startup Genome’s 2017 Global Startup Ecosystem Report, the number of startups in each city, and on the availability of capital and funding.
Compensation is a common motivator for employee relocation. Which cities offer the biggest paychecks?
Salary data was collected from local job boards, live job postings, and salary databases for each city to find average salaries for management, technology, and marketing positions. “Entry level” salaries provide an approximate value for a position requiring 0-3 years of previous experience, while “Experienced” salaries were based on jobs requiring 5-10 years of experience. Of course, even for the same position in the same city, salaries fluctuate due to many factors including negotiation, education background, professional experience, and gender. Thus, these salaries may be higher or lower than your actual salary due to individual variation. All salary values reflect the yearly goss salary of an employee.
What percent of your paycheck do you see at the end of the month, and where does the rest of it go? Startup employees may not be keen to see a hefty portion of their salaries withheld for taxes, but in terms of your health and free time, the benefits could outweigh the cost.
Income Tax (~6.7%) - Income taxation is a complex and varied process, with many countries offering progressive taxes based on income, while others levy a flat rate across all income levels. Thus, the Income Tax score was calculated as the middle point between a typical tax rate for a Low-Mid Earner and a typical rate for a Mid-High Earner. In all cases, the selection of these rates was informed by local salary information, and when applicable, the tax rates include employee social security contributions. Health Care Quality (~6.7%) - The Health Care Quality score was calculated based on the World Health Report conducted by the UN, the availability of hospitals per capita, and on the quality of medical facilities in each city. Vacation Days (~6.7%) - The Vacation Days score was calculated according to each city’s minimum number of annual vacation days, including federal holidays.
A high salary is certainly a plus, but it’s all relative to the cost of living in your city.
The Affordability score was calculated by comparing local prices of groceries, street food, restaurants, clothing, public transportation, and monthly rent on a one bedroom apartment in the city center. All data was collected from local price reports, web listings, and online shops. The total Affordability score, which contributes 20% to the final score, was calculated with the following category weightings: 60% Rent, 8% Grocery, 8% Street Food, 8% Restaurant, 8% Public Transport, and 8% Clothing. For more information about the breakdown of the score by category in your city, contact us here.
No matter the salary or career, every employee deserves to feel comfortable and safe in the city they call home.
Safety (12.5%) - Each city’s Safety score reflects the reported perception of safety by residents and public data provided by police departments of each city regarding crime rates. Gender Equality (7.5%) - The Gender Equality score was calculated using the 2017 Global Gender Gap Report by the World Economic Forum. At Nestpick, we are committed to offering equal pay to all employees. Professional women around the world should know which cities offer fair compensation, and which cities still lag behind. School Tuition (0%) - Depending on language, education policies, and personal preference, many expatriate employees choose to send their children to international school, while many others enroll their children in public schools for the full, immersive experience. For those cities in which international schooling for children of foreign workers is most common, we researched average yearly tuition fees for a primary school aged child at an international school. Because schooling is ultimately a personal choice and not applicable to all startup employees, tuition data did not affect the rankings. Rather, the figures reported should serve as additional information for those considering relocation.
All prices accurate on 3 July 2017 with up-to-date exchange rates from Bloomberg Markets.