Report by JLL and The Business of Cities reveals seven key global cities and what keeps them ahead of the pack
SINGAPORE – Four Asian cities are among the top seven most competitive cities in the world, says a new report by real estate consultant JLL and city intelligence and strategy group, The Business of Cities. The study, which includes analysis of 44 of the most robust city indices, reveals that Singapore, Tokyo, Hong Kong and Seoul are among the ‘Big Seven’, following behind London, New York and Paris. The South Korean capital is a new addition in 2017, while the other Asian cities have been included since 2013.
“Seoul has stepped up to join the top six ‘Established World Cities’ due to increasing openness, exceptional digital connectivity, the presence of innovative global firms and robust infrastructure,” says Jeremy Kelly, Director in Global Research, JLL. “Once a traditionally closed market, Seoul is widening its international talent base with the presence of many multinationals, making the city highly competitive on a global level.”
Singapore and Hong Kong maintain stronghold as global cities
Singapore, which ranks at number four of the seven, continues to build its position as a truly global gateway, with an emphasis on being a smart city. According to Mr Kelly: “To retain its ranking as a global city, Singapore needs to continue fostering its innovation economy and presenting itself as a hub for talent and business.”
Similarly, Hong Kong, in sixth place, continues to punch above its weight as a global city. However, it faces stiff competition from other Chinese cities, with questions raised over its future direction due to political uncertainties, and affordability issues.
“Hong Kong faces both challenges and opportunities from increasing integration with China,” explains Dr Megan Walters, Head of Research, Asia Pacific, JLL. “On the one hand, it faces huge competition from the likes of Shanghai and Shenzhen. On the other, there are new opportunities especially when it comes to internationalising the Chinese economy, notably with the Belt and Road Initiative.”
Competition among global cities
The ‘Big Seven’ form a coherent group with shared challenges and imperatives relating to affordability, infrastructure financing, regional growth management and relationships with their nation-states. Collaboration around what they can learn will be crucial to maintaining their positions in the global hierarchy,” notes Mr Kelly.
In Asia, issues such as poor air quality and income inequality could potentially hamper governments’ efforts to move up the city rankings. City growth is also impacted by geopolitical uncertainties – the rise of protectionism across the globe and military escalations in Asia have all altered perceptions about which cities appear to be ‘safe bets’ or present higher risks for investment.
As more cities are becoming competitive, a second tier group of 10 ‘Contenders’ has emerged, close on the heels of the ‘Big Seven’. According to the report, China’s ‘Alpha Cities’ – Beijing and Shanghai – are part of this rising group of emerging hubs as the country’s Belt and Road Initiative represents the next step in these cities’ global pathway. The other ‘Contender’ cities identified globally are Los Angeles, Amsterdam, Chicago, San Francisco, Toronto, Madrid, Sydney and Washington DC.
With more than 300 city indices currently measuring all aspects of urban life, The Universe of City Indices 2017: Decoding City Performance includes an analysis of 44 of them spanning seven factors: corporate presence, city gateway function, market size, infrastructure platform, access to talent, specialisation and innovation, and soft power.
“These indices have a bearing on how we understand city dynamics and serve to guide investors, businesses and employees as they make location choices. They point to which cities have the ingredients for future success and help steer the real estate industry in its response to the rapidly changing urban landscape,” concludes Mr Kelly.
JLL’s ‘Established World Cities’ rankings benchmark the most competitive urban cities in the world.
The ‘Big Seven’ comprises:
- New York
- Hong Kong
The ‘Contenders’ comprises:
- Los Angeles
- San Francisco
- Washington DC