Overcoming the tech talent shortage in Benelux
The Benelux region is stronger than its size. Despite only having 1.7% of the European territory and 5.6% of the European population, it accounts for 7.9% of European GDP. Its long history as a financial and cultural hub as well as its growing tech and startup scene are key to this success.
While the tech scene has helped grow the economy in recent years, it’s also accelerating the widening tech talent shortage in Benelux.
The situation is not hopeless.
Each country’s skill shortage is unique, as are the responses they have put in place, but the overall picture is the same. The Benelux region needs more skilled ICT professionals and they need them fast.
Perhaps it’s no wonder that more companies are investing in various offshore models to overcome these skills shortages. But are they the best option?
In this article, we’ll explore at the exact state of the challenge, the opportunities for those who can overcome it, and the path ahead.
Positive signs for the Benelux tech ecosystem
London, Paris and Berlin have typically dominated technology headlines, especially over investments. The Covid-19 pandemic and Brexit have disrupted that stronghold. One of the areas that has benefited the most has been the Benelux, comprisingcomprised of Belgium, The Netherlands and Luxembourg.
In 2021, VCs invested €4.7 billion in the Benelux tech scene, triple the amount compared to 2020. While it still doesn’t attract as much attention, nor investment, as its Western European rivals, the region is gaining a growing reputation for Fintech, clean energy, and health.
Here’s a breakdown of the unique factors and traits of each country’s tech ecosystem.
The Netherlands leads the region
The Netherlands is the top in Europe for digital skills [Eurostat].
Amsterdam has always been a strong tech hub with unicorns including Booking, MessageBird, Takeaway, and Adyen. In recent years, however, this growth has accelerated. In the aftermath of Brexit, significant European initiatives and investments have relocated to the Silicon Canals.
With Amsterdam’s Euronext replacing the London Stock Exchange as the top venue for share trading in Europe back in 2021, it’s become a prime location for the Fintech industry.
When combined with its existing tech hub status, large existing talent pool, and position at the top of EF’s English Proficiency Index (a measure of English skills globally) it is an attractive location for internal companies.
All of which explains why Amsterdam came second in the European Cities of the Future this year, and Startup Genome ranked it in the top 20 startup locations worldwide.
The Netherlands is more than just Amsterdam. And that’s reflected in the market.
Two-thirds of all startup jobs in the Netherlands are based outside the capital. Rotterdam has a thriving tech scene influenced by its port and large multinationals such as Shell. Eindhoven, Utrecht and Enschede are growing startup destinations thanks in part to their educational institutions and investments in research.
It’s no wonder that demand for tech skills is skyrocketing up and down the country.
Belgium’s governmental help and highly skilled workforce
Belgium’s multilingual identity and presence of European institutes have made it a multicultural hub for tech companies. This has helped Belgium attract a highly skilled workforce with a large migrant population. Plus, government programmes are helping drive business growth in clean energy, business services, and the digital economy sectors [Statistica].
This global character — especially in Brussels — helps explain why 76% of all Belgium startups are B2B focused. This has helped Brussels rise into the top four European regional challenges in the 2022 Startup Genome report.
Luxembourg’s wealth draws in talent
Although Luxembourg is the smallest member of the Benelux region, it has a key advantage. Its status as the second richest country in the world (GDP per capita) has made it a talent magnet for the surrounding regions — including France and Germany.
Multinational giants including Amazon and PayPal have their European headquarters here. They’re probably attracted to its multilingual heritage, large financial institutions, and importance within the European Union. In recent years, this has been boosted by several government-backed initiatives to encourage the tech sector.
The net effect?
Benelux currently boasts 33 unicorns and 21 soonicorns split between the three countries as well as countless more startups and scaleups. And these are powered by one of the highest developer-to-population ratios in the world.
But that growth has amplified its greatest challenge: skill shortages.
The challenge: tech talent shortages in Benelux
Demands for ICT professionals across Europe rose 57% between 2012 to 2022, and the Benelux is no exception.
But although demand has skyrocketed, the supply of employees hasn’t managed to keep up. This has led to high vacancy rates for ICT professionals in every member country.
The region suffers from the same factors that are driving global talent shortages. Demographic shifts, ongoing digitisation of legacy industries, and the rise of machine learning and generative AI have caused a surge in demand for IT professionals.
With the great resignation leading to a decrease in skilled workers and insufficient junior engineers joining the ranks, migration is becoming the only way to mitigate the demographic challenges.
The fourth industrial revolution was turbocharged by the Covid-19 pandemic. Now, almost every company is a tech company in some form and requires a team of engineers.
Advances in artificial intelligence are promising increased profit margins to those who can leverage them effectively. Something only possible with the limited pool of AI and data experts available globally.
There are, however, unique factors specific to the region and each country that are increasing demand and decreasing the supply of skilled engineers across Benelux.
Understanding these challenges is critical to devising an effective strategy to overcome these shortages and keep development on track.
Read the full article at : https://thescalers.com/tech-talent-shortage-benelux/
