As the global economy gradually works out a new path, the shape of investment markets and urban competition is visible. At the summit, New York and London have retained their pre-eminence as finance centres and hubs for global business networks and in co-ordination roles. They maintain unique densities of talent and human capital. While Paris and Tokyo rate higher on environmental initiatives, transport infrastructure and liveability, they trail the Anglo-American dyad for overall competitiveness.
These ‘big four’ world cities that have been identified since the early 1990s are, for the first time, finding their position challenged by Singapore and Hong Kong. These somewhat autonomous Asian gateways have surpassed Paris and Tokyo in business environment and human capital terms. Hong Kong is rapidly closing in at the top of the Global Financial Centres Index and is comfortably the world’s third most connected business city. Singapore, meanwhile, is one of the only top finance hubs to have truly outstanding infrastructure. The city-state is also commended as the outstanding environmental city in Asia, benefiting from seamless policy execution. The pair’s only limitations appear to be in cultural and educational assets, innovation-led research and development, and political-informational influence. The ‘big four’ is, for now at least, the ‘big six’.
Singapore and Hong Kong spearhead a clear shift Eastwards in the upper echelons of the global city hierarchy. The Chinese centres of Shanghai and Beijing stand out for their remarkable progress. Shanghai is on the verge of becoming a global business leader, forecast to be the world’s 3rd wealthiest city by 2025, with world-class performance in foreign direct investment and financial asset management. Beijing is gaining considerable political and intellectual influence, enjoying remarkable growth as an academic and research hub.
Together the pair galvanise mainland China’s international urban renaissance. Behind them a cluster of regional centres, headed by Seoul and Kuala Lumpur, show steady progress, with demonstrable success in R&D, real estate, international connectivity and multinational firms. However, India’s main hope, Mumbai, is beset by critical weaknesses in R&D, cultural provision and transport. All high-population Asian cities – except Tokyo, Seoul and Singapore – continue to struggle in indices of liveability, environmental progress, cultural-historical kudos and health.
North American cities have, on the whole, weakened. With the exception of New York, all six North American cities have lost ground in the Global Power City Index. The trailblazers – Boston, Seattle, Vancouver, Austin and Portland – have excelled on environmental and entrepreneurial measures, successfully nurturing innovation and creativity. These cities have illustrated the benefits of compactness and a local governance framework responsive to future economic and social trends. Intellectual assets and knowledge economy talent remain the key differentiators for urban success in this region.
A wide divergence of long term fortunes is also manifesting itself in Europe. Barcelona, Berlin, Stockholm and Zurich stand out for their cultural and/or niche economic-science functions, offering significant quality of life benefits and improved business promotion. This quartet represents Europe’s biggest mid-size urban success stories, although their lack of scale means they do not yet present an all-round offering capable of matching Paris and London. Others, includeng Rome, have failed to leverage their historic prestige and social richness optimally to create a new knowledge economy. The future roles in the international system for these cities appear uncertain.
A handful of other cities are showing global promise. Sao Paulo is the big mover in Latin America, ahead of Mexico City, although both face resurgent external rivals in Madrid and Miami. The Eastern European megacities of Istanbul and Moscow have recovered strongly into a new robust growth pattern, but have pervasive infrastructure, health and regulatory limitations. While Dubai’s meteoric rise has stalled, it is neighbour Abu Dhabi that is gaining ground for talent, cultural buzz and tourism. Finally, Sydney has achieved recognition for its excellent balance between quality of living and economic prosperity, based on visionary leadership and brand strength.
In such an environment of flux, city leadership challenges facing the world have just got much bigger. Leaders will need to be prepared to undertake key roles in shaping how investment is attracted and how their city can succeed in the new business cycle.
Gain more insight into the progress of our urban centres during dedicated city conferences at MIPIM 2012.
What did cities look like this time last year? Take a look back and compare!