(Bloomberg) -- European tech firms have mostly stopped looking to the U.S. for programming talent, with fewer than one in five choosing to relocate their engineering base ahead of American expansion, according to a survey by venture capital firm Index Ventures.
Just 33% of European tech firms surveyed started U.S. operations before early, “series A” fundraising rounds from 2015 to 2019 compared to about 59% that added offices there or relocated entirely between 2008 and 2014, according to the survey.
“While for some founders, and certainly once a business reaches certain milestones, establishing a U.S. base is a good decision, it is becoming increasingly costly and challenging,” Danny Rimer, a partner at Index Ventures, said in a statement.
Europe's success stories have increased the pool of experienced, home-grown investors and developers, which new companies can draw on. Leading European tech companies including Farfetch Ltd., Klarna, Transferwise Ltd. and Adyen NV, have kept more than 90% of research and development employees in Europe, whereas the older cohort of tech companies had to recruit in the U.S., Index said.
There are now more than 6 million developers in Europe compared to 4.3 million in the U.S., according to data from StackOverflow that was cited in the Index report. Demand for U.S.-based engineering and tech talent has outstripped supply in recent years, making workers more expensive.
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