Software development is one of Munich’s most significant and high growth sectors. The city’s successful economy, the region is known Germany’s wealthiest (and most expensive), is increasingly tech-focused, attracting employers of tech talent and the talent itself to Munich and its wider metropolitan area.
Munich is a city that offers software developers and other IT experts a buoyant, well paid jobs market though it’s also a relatively expensive city and the surrounding region to live in. From the perspective of employers, there is a large pool of IT talent in and around Munich but demand outstrips it. That can make hiring software development talent locally difficult and expensive for companies and organisations that are not at the top end of the food chain when it comes to budget.
Our Software Development in Munich 2022 Guide will give you the lowdown on:
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The city of Munich, or München to native German speakers, is the capital of Bavaria and, with a population of 1.5 million, Germany’s third largest city after Berlin and Hamburg. Munich’s metropolitan region, which hosts a population of 6 million, is Germany’s fifth most populous.
Economically, however, Munich is a powerhouse that punches well above its weight in both the German and EU context. In 2019, Munich added 23,704 full-time, socially insured jobs, representing a 2.8% gain year-on-year. Over five years, the number of socially insured jobs grew by 12.6% with an unemployment rate of just 3.5% in 2019 – Germany’s best for years now. Employment took a hit in 2020 as a result of the pandemic and grew to 4.5%. However, by January 2022, that had dropped back to 4.1% compared to a 5.1% average for Germany as a whole.
Munich’s average per capita purchasing power is, at around €33,000, the highest in Germany and one of the highest in Europe. The city is also surrounded by Germany’s two wealthiest rural regions, by the same measure – the Starnberg rural district (EUR 32,901 per capita) and Munich rural district (EUR 32,650 per capita).
The city’s economic success has become a virtuous circle, with strong business tax revenues giving the local government the financial firepower to invest in further developing Munich as a key European business hub.
Munich is also considered one of Germany and Europe’s most dynamic innovation hubs. It benefits from a healthy mix of global blue chip corporations, forward-thinking midcaps and is a proven breeding ground for exciting and often successful startups, with an active community and good access to venture finance supporting their growth.
The city is one of Germany and Europe’s most digitally progressive urban centres, with a highly skilled workforce and internationally renowned research organisations and higher education institutes. Over the years, local government prioritising investment in digital transformation culture and infrastructure has paid off, creating an environment that has promoted the development of new technology-centric products and services in the city and surrounding area.
With the most highly educated workforce of any German city, it should come as no surprise that Munich has a thriving tech scene and software development sector.
Munich boasts the largest concentration of technology companies in the TecDAX index, whose constituents are the 30 biggest German technology firms. Six of those 30 are represented in the Bavarian capital: Cancom SE, Infineon Technologies SE, MorphoSys AG, Nemetschek SE, Siltronic AG and Telefónica Deutschland AG.
7 companies in the DAX40 are also based in Munich compared to just 4 in Berlin, the next closest challenger. Munich also hosts 9 companies in the mid-cap MDAX and 13 in the small-cap SDAX compared to 6 in each from Hamburg, which ranks second across both indices.
Munich’s dynamic startup scene is rivalled by only Berlin. Its vibrancy and health is built on the foundation of a tight-knit ecosystem that nicely links startups with universities, research institutes, local government, investors and established companies including the many corporate giants based in the area.
A 2018 PwC study showed 96% of the startups based in Munich rate the regional startup ecosystem in and around the city as good to very good. The city’s digital infrastructure and opportunities to collaborate with established companies, many of whom financially support the Munich startup scene and individual companies, are the two most positive factors highlighted by startup founders themselves. While there has been no update to that particular report since and a general drop-off in good data sources, an impact of the pandemic, there have been no major changes
A report by Startup Genome “Global Startup Ecosystem Report (GSER) – Succeeding in the New Era of Technology” values Munich’s startup ecosystem at $4.5 billion and rates Munich as a world leader for young technology companies in the fields of:
Munich’s Department of Labour and Economic Development, in partnership with the Chamber for Industry and Commerce for Munich and Upper-Bavaria have been running the Munich Business Startup Office (MEB) for over 20 years now. The office offers a valuable foundational resource for startup founders, providing information, education and coaching through materials available online, weekly events and over 1000 consulting sessions a year.
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Germany is Europe’s largest software development market and Munich is Germany’s largest local economy. This inevitably means there is a huge demand for software developers and other IT specialists. And the demand to supply disbalance for software developers and IT specialists is well publicised.
An article in Handelsblatt outlines the severity of the situation:
“This year alone, Germany was short of 82,000 IT staff who would otherwise have been busy shaping that digital transition across all industries — almost 50 percent more than the previous year. According to the latest study by Bitkom, an industry association, four out of five firms lack personnel with the IT qualifications they need.”
The concentration of companies with high tech needs in and around Munich means this supply-demand problem is particularly pronounced in the region. The overall strength of the city’s economy is, of course, generally a positive for the area and companies operating in the city. But one drawback is that software development costs are especially high if relying on locally based experts.
While that may be good news for software engineers themselves, it can be a painful overhead for companies who prefer to hire locally, rather than outsource software development to providers with nearshore hubs. Due to the expense of developing software locally in Munich, that is a common approach, with nearshore destinations in nearby Eastern Europe especially popular for logistics, language and cultural reasons.
The cost of developing software nearshore or offshore from Munich can vary significantly depending on the location. However, it is worth noting that the range of international developer rates has tightened over the past few years and you should be wary of prices that look especially cheap. There is a high chance the lower price will be reflected in the eventual quality.
The tightness of global supply for IT experts and software developers has seen the rates charged by and for more senior software engineers and architects in nearhshore and offshore locations move closer to those typical in Germany. While it used to be possible to hire like-for-like experts at half the price of those based in Germany, or even less, that’s no longer the case.
Take-home salaries for developers from popular nearshore destinations like Ukraine and Poland are now often only 20%-30% less than those in Germany. However, companies still make significant additional savings from the fact social security and other employment taxes are typically much lower.
Munich-based companies who wish to recruit local software engineering talent should steel themselves for a relatively high salary and incentive costs. It’s expensive to hire good quality software developers anywhere in Germany but there is a premium to pay if recruiting in Munich.
The data below shows average salary levels in both Munich and Germany for full stack software developers based on data published by SalaryExpert.
The average full stack developer in Munich earns €85,637 compared to average earnings of €82,096 across the country.
Taking a closer look at specific roles, the trend of developer and other IT specialist salaries being higher in Munich compared to elsewhere in Germany continues. The Munich premium is also higher for more specialist roles, such as DevOps engineers. With the demand to supply gap for software developers expected to widen in Western Europe over the current decade, and local Munich demand especially high, software developer salaries for local hires should be forecast as increasing over coming years.
Despite the relatively high cost of developing software in Munich, the labour market in the city for software engineers is vibrant. Stepstone.de has, as of early 2022, 1405 software developer jobs listed for the Munich area. That’s even more vacancies than for Berlin, where 1136 positions are being advertised. Perhaps surprisingly, there are actually more software development roles advertised for the Stuttgart region where 1212 vacancies are listed.
After the three German technology centres of Munich, Stuttgart and Berlin, there is a relative drop off in software developer demand in and around other big German cities:
Frankfurt 908, Hamburg 876, Cologne 727, Dusseldorf 655, Bremen 174 and Dresden 163.
While there is big demand across the country, the Munich, Stuttgart and Berlin regions are clearly out in front as the cities in Germany with the most demand for software developers. But which specific software engineering skills are most in-demand in Munich in 2022?
The survey shows React.js was the most used web framework in the world by professional developers followed by jQuery then Angular.
In Munich the picture is slightly different with Angular developers in most demand (207 vacancies on Stepstone.de), closely followed by React (198 vacancies) and then Spring (171). There’s also demand for Vue.js, Express and ASP.NET developers but little for jQuery, with just 16 vacancies listed. There is some demand for Django (10 vacancies) and just two vacancies listing knowledge of Flask as a requirement.
Finally, it’s worth noting that demand for DevOps engineers, a software development role focused on infrastructure provisioning and CI/CD pipeline automation that doesn’t fit neatly into any of the four categories here, is also particularly high in Munich. There were 555 roles advertised on Stepstone.de for the Munich region as of February 2022.
There are plenty of options when it comes to sourcing Munich software development resources that fit your needs. One option is to browse the website of companies listed on directories such as:
You can also browse Google, narrowing your search with filter terms such as the particular tech stack or other qualities you are looking for.
In both cases, keep in mind that the positioning of software development agencies you will find through browsing directories and Google says more about their marketing skills than strengths as a software development partner. But you have to start somewhere and that can be a good place to begin putting together a short list.
Word-of-mouth referrals from trusted contacts can also be invaluable, especially if they have direct experience working with a company. And even if you don’t have a direct referral, it is worth making the effort to try and get in touch with other organisations agencies on your shortlist have worked with for a reference.
Again, keep in mind that you qualify referrals through the other filters we’ve already mentioned that are important to consider when judging fit. The referrer’s project and organisational needs may not match your own, which will influence if a development partner that was a good fit for them will also be for you.
As would be expected of a city and region with such a thriving tech scene, Munich has regular events and meetups with a software development and tech focus. You can find out what’s going on in terms of events you might be interested in attending by checking out:
One of Munich’s most anticipated tech events is the Bits & Pretzels Networking Week which usually takes place in September and usually has an all-star line-up of speakers. In the past, global figures including Barack Obama, Sir Richard Branson, Jessica Alba, LinkedIn co-founder Reid Hoffman, Klarna co-founder and CEO Sebastian Siemiatkowski, Dropbox co-founder and CEO Drew Houston and Airbnb co-founder and CTO Nathan Blecharczyk have all spoken.
*If you know of or run other useful directories of Munich tech and software development events, meetups or conferences, please get in touch to let us know and we’d be delighted to add them to this list.
We hope you found this resource on the software development sector and scene in Munich helpful and informative. We’d love to keep on improving it so please get in touch if you think there is any interesting information, facts, figures etc. you think we could add to make it even better.
Enjoy Munich and everything this Bavarian tech hotspot has to offer!
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