Dubai – A new Economist Intelligence Unit (EIU) research report, commissioned by Citi, reveals that European cities are the world’s most competitive, with London ranking first in competitiveness in Europe and second globally, out of 120 of the world’s major cities.
Released today, the report, entitled Hot Spots, ranks the most competitive cities in the world for their demonstrated ability to attract capital, business, talent and tourists.
With a combined population of about 750 million, the 120 cities ranked in Hot Spots represent approximately 29 percent of the global economy and generated a combined GDP of US$20.24 trillion in 2011.
According to the report, the most competitive cities in Europe are: London (2nd), Paris (joint 4th), Zurich (7th), Frankfurt (11th), Geneva (joint 13th), Amsterdam (17th), Stockholm (joint 20th), Copenhagen (joint 23rd), Vienna (joint 25th), Dublin (27th) and Madrid (28th).
“Attracting the world’s top talent is paramount to fostering growth and innovation for the future and Europe’s cities clearly have the competitive edge,” said Citi EMEA CEO Mike Corbat.
“The demands on cities have never been greater than they are today. We are committed to working with current and emerging urban centers throughout Europe and Africa to help them meet the challenges of urbanization and enable economic progress.”
By the key measure of Economic Strength, two cities in the region, Doha and Abu Dhabi, made it to the top 30 Cities list, while Dubai ranked 10th under the measure of Financial Maturity, and Riyadh came 8th globally as least risky in terms of Environmental and Natural Hazards.
“This validates the attractiveness of major cities in the region as world-class metropolises, owing to their relatively stable economies, high rate of investment in physical and human infrastructure, as well as developed financial and commercial status,” said Atiq Ur Rehman, Citi’s Chief Executive Officer for the Middle East.
“Economic dynamism is definitely rising elsewhere, especially in Asian cities, but U.S. and European cities have legacy advantages that give them a strong competitive edge,” said Leo Abruzzese, the EIU’s global forecasting director. “In particular, these developed cities are better at attracting top talent from across the world.”
The Global City Competitiveness Index
For Hot Spots, the EIU developed a “Global City Competitiveness Index” that measures cities across eight distinct categories of competitiveness and 31 individual indicators. Categories include economic strength, human capital, institutional effectiveness, financial maturity, global appeal, physical capital, social and cultural character and environment and natural hazards. A city’s overall ranking in the benchmark Index is a weighted score of the underlying categories.
Finding a Competitive Advantage
In terms of the human capital category of the Index, European and American cities dominate, as they are able to continue to attract capital, businesses, talent and tourists despite concerns over ageing infrastructure and large budget deficits. It will be key for these Western cities to harness their legacy advantages and global connectivity to continue to compete and succeed against fast-growing emerging market cities.
According to the report, the ten most competitive cities in the world are: New York (1st), London (2nd), Singapore (3rd), Paris and Hong Kong (joint 4th), Tokyo, (6th), Zurich (7th), Washington, DC (8th), Chicago (9th), and Boston (10th).
Additional key findings include:
Asia’s economic rise is reflected in the economic competitiveness of its cities: In terms of “economic strength,” the most highly weighted category, 15 of the top 20 cities are in Asia. Twelve are in China. Tianjin, Shenzhen and Dalian top the list, while nine other Chinese cities rank in the top 20. Singapore (15th), Bangalore (16th), Ahmedabad (19th) and Hanoi (joint 20th) complete the top 20. The top 32 Asian cities are all forecast to grow by at least 5% annually between now and 2016. Twelve of them will grow by at least 10%.
A “middle tier” of mid-size cities is emerging as a key driver of global growth: Although most companies target a combination of advanced economies and emerging market megacities, the fastest overall growth is found in a middle tier of mid-sized cities with populations of 2m-5m such as Abu Dhabi, Lima, Bandung, Dalian, Hangzhou, Hanoi, Pune, Qingdao, and Surabaya. In fact, just nine of the 23 megacities (with populations over 10 million) ranked in the top 30 on economic strength. These mid-size cities are collectively forecast to grow by 8.7% annually over the next five years, ahead of the megacities on which many firms focus.
Infrastructure investments will drive emerging market growth, but more will be needed to secure their attractiveness to tomorrow’s talent: One of the most pressing challenges for emerging market cities in the decades ahead will be whether they can focus their development not just on skyscrapers, rail links and other infrastructure, but also on the softer aspects that will be crucial to their ability to attract and develop tomorrow’s talent—including education, quality of life, and personal freedoms, among other things. In addressing these aspects of competitiveness, cities in Latin America and Africa including Buenos Aires (ranked 60th), Johannesburg (67th) and Cape Town (73rd) can quickly improve their performance in the ranking.
For 200 years, Citi’s central mission has been to enable economic progress. With its global footprint, Citi connects clients to the world, working at the center of global trade and capital flows. On the ground in more than 1,000 cities, Citi has a unique perspective on the complexities of the urban environment. Through Citi for Cities and other initiatives, Citi works with clients and public and private sector partners in cities around the world to enhance public services, facilitate commerce, expand financial inclusion and harness advancements in digital, mobile and card technologies.
Source: Press Release
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