December 28, 2023
min read

5 Best Emerging Tech Cities in Europe

Eli McGarvie

When people discuss Europe’s tech scene, the primary focus is on tech hubs such as London, Amsterdam, and Berlin. While these tech cities still offer plenty of opportunities for skilled workers and founders, these are highly competitive arenas. Whether you want to get your foot in the door, take a step up in your career or even increase your quality of life, it makes sense to look outside of these main hubs to emerging markets. 

In this article we are going to discuss some of the emerging tech cities in Europe. We’ve chosen a few cities that have shown growth and will continue to show growth over the next decade. Be aware that it’s a tough time to measure industry growth given the global contraction of the tech industry — some of the data might seem inflated and/or conservative. 

The 5 Best Tech Cities in North America

🇪🇺 Best emerging tech cities Europe

This is not a comprehensive list, and these cities are not in any particular order. There are many great European cities that we haven’t included but might include in the future. If you’d like to get an understanding of the indicators we used to select these markets, check out the resources at the bottom of this article. 

Here are the best emerging tech cities in Europe: 

# City
1 Zurich
2 Tallinn
3 Porto
4 Bucharest
5 Barcelona

1. Zurich, Switzerland

Zurich is the largest city in Switzerland and a rising European tech hub. According to Startup Genome, Zurich ranked third in Europe for VC funding per capita. The number of startup exits in Zurich in 2023 saw a growth of 300% compared to 2022. And when we compare billion dollar exits (IPOs and Mergers & Acquisitions) in Europe, Switzerland comes in 6th place (Atomico). 

According to the State of European Tech 2022, Switzerland was identified as one of the top risers (#4) in Europe based on capital invested per capita. In terms of total capital invested, Zurich sits at #7 in Europe, neck and neck with Helsinki and behind Amsterdam. While COVID certainly affected investment from 2020-2021, there’s a clear upward trend for Zurich going forward. And given that Zurich is already an established finance hub, growth in this region is inevitable. 

Swiss Business Culture and Etiquette →

Not only is Zurich great because it’s centrally located and filled with wealthy investors, but it is also a fantastic place to live. The Global Liveability Index 2023 ranks Zurich as the 6th best city in the world (in the top 10 for the last three years). If we remove Australian and Canadian cities — Zurich places second in Europe after Copenhagen. Switzerland as a whole is also regarded as the ‘best’ country in the world, that is according to U.S. News. 

Zurich is widely considered a top contender in Europe for jobs and talent. According to FDIintelligence’s 2023 report, Zurich came first in the mid-sized cities category largely due to its pool of highly educated talent and an already established financial hub. The country recently topped the Global Innovation Index for the 13th successive year which further speaks to the highly skilled talent pool.

Guide for Expats Living in Switzerland →

There are a number of reasons why Switzerland is a mecca for highly skilled talent. The country has fantastic education and then there’s the swath of multinational companies (who offer high wages). Additionally, you’ve got an incredible amount of wealth in the region which bumps up the quality of life and sets quite a high bar for workers and expats. 

In Addition to the international banks operating in Zurich, you can find tech giants like Google, Amazon, Lufthansa, and Microsoft. There are also a number of unicorn companies in Switzerland that have put the Swiss tech scene on the map, these being: SonarSource, Acronis, 21.co, Nexthink, Numbrs, MindMaze, and Scandit.

In terms of tech jobs, the Swiss economy is estimated to need over 117,000 additional IT specialists by 2028. The majority of those jobs will be centred around Bern, Geneva and Zurich. In terms of tech related job postings, over a three month period in 2023 there was an average of 2,148 jobs posted. 

The average salary for a developer in Switzerland is €105,000 which is the highest in Europe. (As a comparison the average salary in Zurich is €100,000). Despite high salaries, the cost of living in Switzerland is the highest in the world. Zurich has been dubbed the world’s most expensive city. It is extremely costly to live in Switzerland. For example, consumer prices in Zurich are 52% higher than London, and groceries are 96% higher (Numbeo).

Find a tech job in Switzerland →

2. Tallinn, Estonia

Tallinn has been called the Silicon Valley of Europe. This is not a comment on the size of Tallinn’s tech scene but the innovative and digitised economy which punches well above its weight. Estonia (and Tallinn as an extension) has a culture of speed and efficiency which has led to things like a digital-first government, e-Residency, and the ease at which a person can start a business. 

Before we dive into the Tallinn tech scene, let’s establish where Estonia is sitting on the international playing field. According to Startup Genome, Estonia has ranked #10 in the emerging ecosystems (worldwide). This is a huge feat, considering this is a country of only 1.3 million people (for reference Zurich has around 1.4 million people). 

Estonia has the highest capital invested per capita (2022), more than double that of the UK, France, or Switzerland. Estonia also tops the charts for investments as a share of GDP (3.59%), two whole points higher than the second spot, Croatia (1.15%). Furthermore, when comparing compounded annual growth rate ("CAGR") of capital invested in startups (by city), Tallinn is again, number one beating out London, Paris and Berlin.  

When we look at top hubs in Europe by total capital invested (2022), Tallinn comes in at #10 with 1.3 billion invested — similar to Helsinki and Milan. Over the last five years, the startup sector in Tallinn has grown 30% year on year. The tech ecosystem in Estonia is very healthy and all signs are pointing up. 

Despite only having created 10 unicorn companies, Estonia has the most unicorns per 1 million inhabitants in Europe (Atomico). Estonia also has the highest number of startups per capita, at over one startup per 1,000 inhabitants. The concentration of tech in society is the highest in Europe followed by Iceland and Ireland.

 Estonia’s unicorns 🦄: Glia, Veriff, Gelato, ID.me, Zego, Pipedrive, Bolt, Wise, Playtech, and Skype.

While Tallinn is exceeding by all metrics, the country doesn’t seem to be suffering the shortage of ICT specialists that other EU nations are forecasted to experience. What Estonia is lacking is a shortage of specialist ICT workers who are generally in high demand because of their unique skill set. Absent in Estonia is also the multinational tech giants like Google and Microsoft. In conclusion, there are not that many active tech jobs in Estonia. 

Despite the lack of job opportunities, Tallinn has a great cost of living ratio. The average developer salary in Tallinn is around €29,000 but when considering rent and consumer good prices, the money left over isn’t going to be far off what one can earn in the major hubs (Berlin, London). Rent Prices in Tallinn are 57.6% lower than in London. And overall, a person living in Tallinn will spend 30% less than a person living in London (Numbeo). 

One great aspect of Estonia’s digitised government is the e-Residency which allows people from all around the world to register an EU business online without relocating and free from bureaucracy. This program has been incredibly popular among tech workers. 

3. Porto, Portugal

In recent years, Portugal has repositioned how people view the country, from a cheap tourist destination to now a progressive location where one can do business at a lower cost. The government has introduced a number of schemes which have gained international attention from workers and investors. Some of these schemes include a low tax remote working visa with one of the best tracks to residency in Europe. Plus a golden visa program where one can directly invest into the local economy for permanent residency. 

Lisbon has become quite popular, and as the city grows, people have noted the rising costs. Thankfully there are still some hidden gems in Portugal that are not overrun with ambitious tech workers. Porto is the second largest city in Portugal and located about three hours north of Lisbon. It has been dubbed, by Monocle, as one of the best small cities in the world. 

When comparing investment growth over the last decade, it was found that Porto was the fastest growing market in Europe in terms of foreign direct investment, with a growth rate of 930% (when comparing 2014-17 to 2018-21). So it’s clear that investors are capitalising on the growth potential of this city – which is also a good sign for workers and job seekers. 

Looking at the tech scene in Portugal, we can see that it’s ripe for growth. According to Atomico, Portugal is one the top risers in terms of capital invested (2022). And we’ve seen a number of billion dollar companies emerge from the country in the last few years, with a total of 7.  

Portuguese unicorns 🦄: Anchorage Digital, Remote, Sword Health, Talkdesk, Feedzai, OutSystemsFarfetch

According to most sources, there are plenty of jobs in Porto for skilled tech workers (a lot of hybrid and remote opportunities too). The main drawback is the salary. Tech jobs in Southern Europe tend to pay quite a bit less than what you might expect to earn in Germany or the UK. Average developer salary is €26,311 (avg. Portugal €22,000). So unless you are working for a multinational company or a unicorn you might want to lower your salary expectations. Remote opportunities are generally the best option to maximise income. 

Cost of living in Porto is regarded as low by European standards. Consumer Prices in Porto are 31.9% lower than in Berlin and 43.7% lower than in London. Rent in Porto is also 30% cheaper than in Berlin. So if you can earn German wages in Portugal, you’ve effectively increased your salary by 30% — which is huge. 

The total monthly cost of living is estimated to be around €1,500. The tax rate is essentially the same as Western Europe unless you are a remote worker. Remote workers can save further on tax, only paying a flat rate of 20% on local income and no tax for foreign income. 

4. Bucharest, Romania

Bucharest is the capital city of Romania and a fast rising tech hub in Eastern Europe. Currently Romania has the 12th largest software development industry (by revenue) in Europe and the 4th in Central Eastern Europe. 

According to La Salle, Bucharest was the city with the 6th best GDP score in Europe. Romania’s ICT sector contributes to around 6.2% of the country’s GDP. Surprisingly, the city has attracted large multinational tech companies like Oracle, IBM, Microsoft, Amazon, Honeywell, and Adobe. The skilled IT talent and low overheads seem to be the biggest driving forces for these satellite offices. 

Romania only has one unicorn company, UiPath.

In terms of foreign direct investment, Romania has seen a generally uptrend, dipping slightly in COVID times, 2021 and 2022 seeing some of the highest levels of investment since 2007 (when Romania became a member state of the EU). 

There’s no question that Bucharest is fast becoming a top destination for startups and companies but what’s it like on the other side, as an employee working there? According to levels.fyi, the average software engineer salary is around €38,810, but we’ve found this to be on the higher end. A better estimate would be €15k entry level and up to €34k for mid-senior engineers. With most engineers suggesting a reasonable middle ground of around €25k. Read more about salaries here

Although salaries are a bit lower than Western Europe, you might find balance as the cost of living is also lower. Consumer prices including rent in Bucharest are 45.6% lower than in Berlin (Numbeo). Costs are close to half what you’d be paying in Berlin. Renting a one bedroom in the city centre of Bucharest, for example, is 61% cheaper than in Berlin and 80% cheaper than London. 

A moderate estimate of the cost of living comes to around €1,100 per month. 

5. Barcelona, Spain

Although Barcelona is not the capital of Spain, it has surprisingly received more investment in the last few years than Madrid. In the top 20 European hubs, Barcelona ranks 11th while Madrid falls in at 13th. Madrid is seen to be more expensive with a more competitive labour market — these are two things that are a big deterrent for startups. That’s why you’ll find a vibrant startup scene blossoming in Barcelona. 

Over the last decade Barcelona has grown an impressive tech scene. The industry has accumulated 52 startup incubators, world-class research facilities, technology parks, and a host of international companies like Airbnb, Amazon, HP, Microsoft, and Ubisoft. 

Spanish Business Culture and Etiquette →

Already we’ve seen some great local companies emerge from Spain and hit the international market, some of these include Jobandtalent, Cabify, TravelPerk, Recover, Factorial, Glovo, Flywire, Wallbox, eDreams, and Devo (all unicron status). According to Atomico, Spain has launched 12 unicorn companies which puts the country at #7 in Europe behind Switzerland and tied with Norway. Despite a rough couple of years (for everyone), Spain has managed to maintain positive growth for capital invested, while larger tech hubs such as the UK and Sweden have experienced a noticeable drop. 

While the presence of multinational companies has raised the average tech salary in Barcelona, you’ll notice salaries are still lower compared to other hubs such as London or Berlin. The average software developer salary is around €35,000 (overall avg. €29,113). This estimate is considered optimistic… €50,000 salary is almost unheard of unless you are working for a FAANG company or a well funded unicorn like Glovo. 

Unfortunately, the cost of living to salary ratio is not as good as some of the other cities we mentioned earlier (Porto & Bucharest). Still, you will be spending around 15% less in Barcelona compared to Berlin and around 41.2% less than London. The monthly cost of living is estimated to be around €2,000 per month. 

Like we’ve mentioned with the other cities above, local salaries are the main drawback to living in Spain. Your best option is to land a remote job or work for a FAANG company with a satellite office in Barcelona. Remote visa holders get the additional benefit or lower tax rates of around 24% (compared to <40%). 

Where to find European tech jobs

The next step is finding a high paying tech job that can support you living in one of these emerging tech hubs. As we mentioned, to get the biggest bang for your buck, a remote job with a company located in Switzerland, Germany, Netherlands or the UK is going to be your best option. There are a bunch of companies advertising remote jobs with great paying salaries on WeAreDevelopers.

5 Best Emerging Tech Cities in Europe

December 28, 2023
min read

Subscribe to DevDigest

Get a weekly, curated and easy to digest email with everything that matters in the developer world.

Learn more

From developers. For developers.