Three characteristics necessary for a locale to become a technology innovation hub or a top location for IT outsourcing are a modern infrastructure, the availability of investment funds, and an educated workforce.

1. Modern Infrastructure

According to the 2020 Technology Innovation Hubs report, the most important factor that would lead to a city becoming an IT innovation hub is that it has a modern infrastructure.
Additionally, the Harvard Business Review found that cities should invest in “basic infrastructure to ensure future growth and to retain a highly-trained local workforce.”
Singapore, for example, was named as one of the “leading technology innovation hubs outside Silicon Valley” in 2020. Prior to this, the city invested heavily in infrastructure. According to Forbes, “Singapore’s robust and resilient technology infrastructure investment is the foundation on which its digital economy ambitions are built.” The city tapped into a nationwide broadband network, providing cheap fiber broadband access available from any address in the city. Singapore is also investing in the fibre optic cable infrastructure necessary to power new technologies such as the “internet of things (IoT), robotics, data analytics, artificial intelligence and virtual reality applications.”
According to the Singapore Economic Development Board (EDB), “Singapore’s plug-and-play business environment lets tech companies hit the ground running almost immediately. In Singapore, businesses get instant access to one of the most technologically advanced IT infrastructures in the world.”
Further proving Singapore’s technological infrastructure prowess, it was “ranked first in digital infrastructure” in the 2018 Asian Digital Transformation Index by the Economist Intelligence Unit.
China was also named in the 2020 Technology Innovation Hubs report as a country-wide center for technology innovation. Part of this is due to China’s massive investment in technology infrastructure, with an “estimated $1.4 trillion over six years to 2025.”

2. Investment Availability

According to the 2020 Technology Innovation Hubs report, another important factor in deciding which locations can become technology innovation hubs is the availability of investment.

The US, China, and the UK were the top 3 countries in global VC investments, indicating the mass amounts of investment funds available in these countries. Cities within these countries have all been named as leading technology innovation hubs.
India, which has been named as one of the top countries to place an IT offshore development center, attracted $17 billion in investment from top technology companies in the first half of 2020 alone.
Beijing, named the city “closest to taking Silicon Valley’s crown as the world’s premiere tech hub”, is second only to Sillicon Valley as well in funding secured by tech companies.

3. Educated Workforce

According to the 2020 Technology Innovation Hubs report, a young and educated workforce is necessary for innovation.

According to the Harvard Business Review, higher education institutions “play a critical role in growing the local innovation economy through research commercialization and by serving as a hub for entrepreneurial training and new business formation.”
For example, India was named as one of the top countries to place an IT offshore development center. This was due in part to their “huge talent pool of professionals“.
Poland and the Philippines were also noted as top IT outsourcing locations due to their large numbers of educated professionals who are knowledgeable about the IT industry.
In London, which was named as one of the top innovation hubs outside Silicon Valley in the 2020 Technology Innovation Hubs report, the London Business School runs many programs focused on innovation including the “innovation lab”, the Incubator programme, and the Institute of Innovation and Entrepreneurship.