New York and London Top 2012 Cities of Opportunity Study

Globe

Though New York and London lead cumulative scoring, emerging cities, including Beijing and Shanghai, are narrowing the gap within key economic indicators, according to the fifth edition of Cities of Opportunity released last week by PwC and the Partnership for New York City.

While New York officially edges out London by one point across 10 economic indicators, the city wins in no individual category. Toronto, which finishes third, also shows great balance yet wins no category. London, however, takes the lead in "city gateway," an indicator introduced this year that measures global interconnectedness and international attraction. Rounding out the leaders are Paris, which advances four spots from 2011 to number four, and Stockholm at number five.

In addition to looking at the current performance of 27 cities that are global capitals of finance, commerce and culture, the study for the first time analyzes city employment in the most significant and telling job sectors and projects the trajectory of the cities in jobs, economic output, and population to 2025.

'Cities succeed when they invest in core needs important to both people and businesses', said Bob Moritz, PwC's US Chairman and Senior Partner. 'When a city invests continuously and aggressively in critical areas, including education, healthcare, safety and infrastructure, it creates a healthy urban environment. Entrepreneurs and businesses thrive, the city economy grows, and long-term resiliency follows'.

'The Cities of Opportunity report is a detailed and insightful analysis of how leading global cities stack up against one another', said Partnership for New York City President and CEO Kathryn Wylde. 'New York City and London, along with other established cities, maintain their top status because of a depth and diversity of strength across all measures. But the true value of this report is not just the rankings; it is that every city can learn from one another about what works when building a 21st century city'.

The Cities of Opportunity key indicators and top three cities within are:

Intellectual capital and innovation: Stockholm, Toronto, Paris

Technology readiness: Seoul, San Francisco, New York

Transportation and Infrastructure: Singapore, Seoul/Toronto (tied for second), Tokyo

Health, safety and security: Stockholm, Toronto, Sydney

Sustainability and the natural environment: Sydney, San Francisco/Toronto (tied for second), Berlin

Economic clout: Beijing, Paris, London/New York (tied for third)

Ease of doing business: Singapore, Hong Kong, New York

Cost: Berlin, Seoul, Kuala Lumpur

Demographics and livability: Paris, Hong Kong/Sydney (tied for second), San Francisco

City gateway: London, Paris, Beijing

The full report, along with in-depth video interviews with leaders who offer their analysis of its findings, including E.O. Wilson, emeritus professor of entomology at Harvard, and Bill Bratton, former New York and Los Angeles chief of police, is available at http://www.pwc.com/cities.

Emerging Cities Advance

Beijing advanced to the top spot in "economic clout" while Shanghai placed fifth behind Paris, London, and New York. This is the first time two emerging cities appeared in the top five of this indicator category.

Beijing and Shanghai are also in the top five in a new category, "city gateway," along with London, Paris, and New York. Balanced progress across a range of social and economic indicators represents the next step for these cities in transforming exceptional growth into sustainable performance for these emerging cities.

Where the Jobs Are

For the first time, the 2012 report provides an in-depth look at some of the most significant and telling job sectors, now and looking ahead to 2025. The financial and business services, manufacturing, and wholesale and retail sectors anchor many city economies in 2012. Financial and business services when grouped together account for more than a third of the jobs in Milan, Paris, London, Beijing, San Francisco and Stockholm. One in three Shanghai jobs today is in manufacturing, although the study projects the city shifting to a more diversified economy by 2025. Wholesale and retail make up more than 20 percent of the workforce in Hong Kong, Kuala Lumpur, Moscow, Mumbai, Mexico City and Istanbul. New York leads the world in healthcare employment with nearly 16 percent of its workforce in the field, while Abu Dhabi takes the lead in hospitality and tourism.

Our Cities Tomorrow

Future employment and economic risks for the 27 cities are pinpointed in a new section that projects a 2025 baseline scenario and several "what if" models, including:

• If knowledge, technology and travel connections determine future success—placing London, Tokyo, New York, Seoul and Paris among the leaders; • If protectionism spreads as a way to counter lingering slow growth, where all cities suffer; and • If quality of life drives city economies, the beauties of Stockholm, Sydney, Paris and San Francisco fuel strong growth

The study's baseline scenario projects that by 2025 an additional 19 million individuals will live and 13.7 million will work in the cities. They will generate an additional US $3.3 trillion in gross domestic product—all predicated on a world of modest growth. At the same time, the wealth divide will remain much the same in 2025 as it does today. Population and employment will surge in cities like Beijing, Mumbai, Istanbul and São Paulo. Mature cities will maintain greater spending power and the consumer and corporate demand that drives emerging economies. Mutual self-interest would logically unite emerging and mature cities as one side continues to need the other.

Despite the rise of emerging cities in key indicators, Cities of Opportunity details some of the long-term challenges facing developing cities due to rapid growth. For example, both Beijing and Shanghai will need to devote roughly 42 percent of GDP to infrastructure between now and 2025 to accommodate growth while cities like London and New York only need to invest 17 percent and 20 percent, respectively.

Cities of Opportunity 2012

image: © Shayne Kaye

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