German Cities to Rescue Europe? - Greg Clark, Senior Fellow, ULI Europe

Strong city governments, proud commitments to social equity, excellent university/R&D links, pioneering efforts to become sustainable and liveable: the German urban approach has certainly attracted favourable commentary since the global financial crisis. But what do the numbers say?

The leading global indexes suggest that four German cities – Munich, Berlin, Frankfurt and Hamburg – have a definite worldwide presence and constitute the elite group of German cities in the global consciousness. Frankfurt, the clear number one German city in the 1990s, continues to punch above its weight economically. It is rated in the top ten by PwC and the Partnership for New York City’s Cities of Opportunity study in 2010, and marginally outside the top ten as an international financial centre by Z/Yen, and for business activity by AT Kearney’s Global Cities Index. But Germany’s financial powerhouse is no longer pre-eminent across comprehensive global rankings. Instead, the capital, Berlin, despite its poor global business connections (55th according to GaWC), has improved its overall provision impressively, reaching the dizzy heights of 6th in the esteemed 2010 Global Power City Index, and 8th in the 2010 Citigroup Wealth Report (Frankfurt 16th and 15th) respectively. Such outstanding improvements have been achieved thanks to excellent scores in cultural, entertainment and environmental measures, rather than economic performance. These have compensated for the capital being barely in the top 100 wealthiest urban economies according to PwC’s most recent assessment, a measure where German urban polycentrism works as a disadvantage.

German city performance on selected global indices

Munich and Hamburg are the other two cities to consistently record respectable scores at a global level. Munich, strongly fancied to become the host for the 2018 Winter Olympics, has a world-class reputation for knowledge and quality of life. It ranks 2nd worldwide for infrastructure and equal 7th for liveability by Mercer, and the best city living in the world according to Monocle Magazine. Hamburg, a pioneer in urban design, is ranked an impressive 40th by the Chinese-led global Urban Competitiveness Report and gains a host of strong scores for living attributes.

Beneath this foursome, there is a substantial gap before we get to the engineering hub of Stuttgart, after which smaller German cities rarely appear in global measures of urban provision. One exception is Düsseldorf, which finishes a highly impressive 6th for both infrastructure and quality of life by Mercer in 2009 and 2010.

At the European scale, Germany’s four high ranking global cities appear as continental leaders after London and Paris in European indexes, aided by their comparatively stable economies and property markets since the global downturn. Frankfurt remains the leading German business centre and investment prospect, ranked 3rd in the European Cities Monitor and 8th in fDi Magazine’s City of the Future study in 2010. The latter finds German cities are on the whole the best geared in Europe towards attracting inward investment, along with British cities. Elsewhere Munich is a continental leader in real estate, placed in the top three in Europe by ULI and La Salle’s 2010 property investment measures, while the Bavarian centre is also highly regarded for its local and international transport infrastructure. Munich, Berlin and Hamburg have all improved their placing since 1990 in the prestigious corporate European Cities Monitor survey, at the expense of Milan, Zurich and Glasgow, indicative of the business confidence they have inspired over the past two decades

Unusually for German cities, Munich has impeccable brand strength, placed 3rd in Europe by Saffron Consultants. International branding is a long-standing shortcoming facing city leaders in Germany, and in this study is confirmed as below-par compared to their overall infrastructure and business performance. The 2006 World Cup provided a timely and resounding boost to German cities’ image abroad. Yet there remain obvious challenges related to optimally leveraging their research/knowledge base and quality of living to attract more global firms, entrepreneurial talent and visitors.

Top image credit: Photobank gallery

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