New York and San Francisco dominate Global Cities report
New York City (NYC) and San Francisco are the world’s most influential and competitive cities according to new analysis from global consultancy A.T. Kearney. The US is the best-represented country on two rankings – current strength and future outlook – but faces increasing competition from China on both fronts.
Now in its 10th year of research, A.T. Kearney’s Global Cities report assesses hundreds of urban strongholds by 27 key metrics. These metrics span five dimensions: business activity, human capital, information exchange, cultural experience, and political engagement.
Two lists are produced. The Global Cities Index ranks entrants by their current power and influence while the Outlook ranks them by competitiveness and future prospects for success. A total of 135 global cities were included in this year’s rankings.
For the second year running NYC tops the Global Cities Index. High levels of business activity and unrivaled human capital sealed victory for the Big Apple, ahead of London, Paris, Tokyo and Hong Kong. Los Angeles and Chicago joined the metropolis in the Index top 10, both enjoying a high ranking thanks to strength in human capital.
Other US cities to crack the top 25 power rankings included Washington DC (11th), which performed strongly on the political engagement metric, San Francisco (20th), and Boston (24th) – thanks to its access to elite universities. An honorable mention goes to Toronto, which helped bring the North American presence in the top 25 to seven cities, compared to nine in Europe.
On the Outlook table measuring cities’ projected future impact, NYC ranked second behind only San Francisco. The West Coast dynamo – which includes Silicon Valley – topped the Global Cities Outlook table for the fourth consecutive year. Companies in the Bay Area drove growth by registering more than 34,000 international patents in the four years, from 2011-2015.
Also present in the Outlook top 25 were Boston (eighth), Chicago (15th), and Washington DC (24th). Despite its absence from the Index, Houston entered the Outlook table in ninth spot and is considered a city to watch. With Montreal, Vancouver and Toronto included, there were nine North American cities among the Outlook top 25, compared to 11 in Europe.
Chinese burn
In 2018, seven new cities joined the Index and the Outlook, but only Seattle represented the US. The other six entrants – Changsha, Foshan, Ningbo, Tangshan, Wuxi, and Yantai – are all Chinese. Although in the world’s second-largest economy just three cities – Shanghai, Beijing and Hong Kong – are represented in the top 25, emerging Chinese cities are beginning to climb the ladder.
There are now 27 Chinese cities included on the full Index, up from seven a decade ago. They are also growing faster than the global average. While the elite North American cities recorded an Average Annual Growth Rate (AAGR) of 0.6% between 2008 and 2018, Chinese cities easily outpaced them with an AAGR of 1.8%. The story repeats on the Outlook table, with Chinese "super cities" outgunning North American rivals with an AAGR of 2.2% compared to 1.1% across the Pacific.
"We've been tracking several Chinese cities over the past decade and have seen how coordinated local, regional, and national strategies and a holistic development approach have led to significant improvements," Andrés Mendoza Peña, A.T. Kearney partner and coauthor of the study, said.
"The urban infrastructure in China is creating a really exciting business environment where tech start-ups can flourish. We're also seeing more and more top talent attracted by the wealth of cultural and educational opportunities in China.”
The Chinese threat to American hegemony was also reflected in a recent KPMG survey which found that 25% of global executives expect the next major breakthrough in disruptive technology to come from China. The respondents also ranked Shanghai the global leader in tech innovation.
The perfect city
A key theme of the Global Cities report is that different urban powerhouses can learn from one another and that there is an optimal mix of attributes that, if combined, could create the "perfect city" for business, says Erik Peterson, partner with A.T. Kearney and managing director of the firm's Global Business Policy Council.
"Ecosystems with the strongest commitment to innovation and development are emerging as the world's best cities," he said. "Now more than ever, it's vital for cities to attract investment that drives growth. The cities highlighted in our report have discovered the right mix of ingredients to do so."
“Index insights can be crucial inputs into decisions on where and how to operate to win the war for growth and sustain performance with the right talent mix,” Nicole Dessibourg-Freer, coauthor of the report and a consultant with A.T. Kearney, said. Such knowledge is especially vital as companies experience huge strategic shifts in their business, she added.
