Growth CoLab's co-director Frank Neffke wins the 2025 „netidee SCIENCE“ Grant

Frank Neffke, a group leader at the Complexity Science and the co-director of the Growth CoLab at CEU won the “netidee SCIENCE” award for his research proposal "Skills and the Geography of Software Startups". netidee SCIENCE is Austria’s most prestigious privately funded research prize for research of the online world. The award, worth €400,000, is presented by the Austrian Science Fund (FWF) and endowed by the Internet Foundation. In the scope of the award, Frank Neffke will investigate why software development remains concentrated in a few regions despite the digital transformation of the economy.

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Transformationsforscher Frank Neffke erhält „netidee SCIENCE“- Förderung

Die „netidee SCIENCE“-Förderung, Österreichs höchstdotierter privat finanzierter Forschungspreis für exzellente Onlineforschung, geht 2025 an Frank Neffke vom Complexity Science Hub.

About the research proposal

Software companies or companies with large software-related businesses increasingly dominate the global economy. The top 5 largest companies in the world include prominent software companies, such as Microsoft and Alphabet (Google), with the remaining three being Apple, Nvidia and Amazon. Many such companies started only recently as new software ventures to then experience explosive growth and stock market valuations. Unsurprisingly, regions around the globe compete fiercely over such companies, as well as the highly skilled software developers that constitute their human capital.

At the same time, software development is a highly collaborative process. Leveraging online collaboration platforms, such as GitHub, programmers work together on large, highly complex software projects. The online nature of this division of labor in software production, as well as the delivery of the output to customers through downloads and cloud-based business services, suggests that the software development sector would be able to organize itself without much regard for geographical distance. However, in practice, software development activities concentrate strongly in a few prominent software hubs, from Silicon Valley to Bangalore and from London to Zürich.

This raises various important questions about the geography of software, the startups that generate new businesses in this sector and the skilled programmers they hire. In this proposal, we develop a new methodology to describe the human capital of software developers from the code they produce on GitHub, the world’s largest online collaboration platform for software development. We do so by constructing a fine-grained, dynamic taxonomy of software skills based on tens of millions of answers to programming questions posted on Stack Overflow, a popular question-and-answer platform for the global software community. With this skill taxonomy, we can now describe the detailed skills of individual programmers. Next, we merge this information to a large dataset on new software ventures, including information on their patents, their success in attracting venture capital funding and in being acquired by larger firms to describe the skill base of these new software ventures. We then analyze to what extent the success of these ventures depends on the skills and social networks of their early employees. Finally, we ask when and how these ventures transform a local economy’s software sector through the introduction of new types of software activities and to what extent the software skills that are available in these local economies determine the success of new software ventures. Doing so will not only provide new insights into the geography of software development, but also on the dynamics of the firms and workers involved, and on the opportunities for regions across the world to compete in this sector.