London retains top position for a second year in PwC’s seventh benchmarking study of 30 leading business centres globally, boding well for its ability to withstand post-Brexit competition on a number of fronts.
Singapore comes second in PwC’s Cities of Opportunity Index; Toronto third, with Paris and Amsterdam completing the top five. Overall, European cities take four of the top 10 places.
The index assesses the social and economic health of 30 leading business cities: Amsterdam, Beijing, Berlin, Bogotá, Chicago, Dubai, Hong Kong, Jakarta, Johannesburg, Kuala Lumpur, Lagos, London, Los Angeles, Madrid, Mexico City, Milan, Moscow, Mumbai, New York, Paris, Rio de Janeiro, San Francisco, São Paulo, Seoul, Shanghai, Singapore, Stockholm, Sydney, Tokyo and Toronto.
It measures their performance against 10 indicators including transportation and infrastructure, ease of doing business, demographics and liveability, technology readiness and cost.
The report demonstrates that cities succeed not only when they perform well economically, but when they succeed in providing a range of social features, including good quality of life, senior wellbeing, housing, and disaster preparedness-each of which demonstrates a strong relationship with top cities in the study.
The report’s methodology and data is based mostly on the two years before the UK decision in June 2016 to exit the European Union (EU), so the Brexit vote does not impact London’s position. However, detail in the report’s measurements give an early indication of both the city’s international strengths and areas it will have to compete on post Brexit.
Bob Moritz, chairman of PricewaterhouseCoopers International, comments: “Over half the world’s population live in cities, and they represent engines of global or regional economies. A good life is not a luxury in these cities, it’s a basic requirement for cities and businesses to get and keep talent.
“Strong performing cities are those planning and providing across all the measures of the long-term quality of life of its citizens. Having the infrastructure in place – social, economic and physical – builds stronger communities and in turn the resilience of the city no matter what it faces.”
Addressing the challenges
The report highlights the complex economic and policy challenges cities face to succeed.
- London retains top position for a second year, extending its lead against close rivals in the study. The city is among the top three in six indicators covered by the study, including intellectual capital and innovation; technology readiness; city gateway; demographics and liveability; economic clout; and ease of doing business. Any effects Brexit may have on London will take place in a process that will evolve over time and not overnight. Questions include the effects on talent mobility and migration, trade, investment and regulation, among others.
- Singapore, the city-state renowned for its planned development, moves to second from third position in 2014. In addition to ranking #1 in three indicators – technology readiness, transportation and infrastructure and the ease of doing business – the city performs well in the area of tax. An analysis of corporate total tax rate, personal rate, and tax efficiency shows that Singapore, along with Dubai and Hong Kong, have the lowest rates and highest efficiency collectively.
- Toronto, third in the study, ranks in the top 10 in seven of 10 indicators, and does particularly well in categories that speak to the daily needs and concerns of urban residents – finishing second in health, safety and security; second in cost; and third in sustainability and the natural environment (tied with Seoul).
- Paris rises to fourth position overall from sixth in 2014 despite a decade of economic pressure and more recently, terror attacks. Paris performed strongly across the measures, the only city to make the top 10 in nine out of 10 indicators. It returns to first in demographics and liveability overall, tying New York. Paris also bounces back to second as a city gateway after falling to seventh in 2014.
- Amsterdam enters the study for the first time in fifth position. The city finished in the top five in three indicators (intellectual capital and innovation; technology readiness; and sustainability and the natural environment). It also finished in the top 10 in a further four indicators (city gateway; health safety and security; demographics and liveability; and economic clout), challenging the traditional urban powerhouses.
- New York remains part of a global urban elite – but drops to sixth from second position in 2014 and first-place rankings in previous editions before that. The city scores lower in many of this year’s newly-introduced measures and is overtaken by other cities’ gains in existing variables. It needs to improve substantially in sustainability and the natural environment, and health, safety and security (both #16) as well as cost (#25). On the upside, the city finished #1 (tied with Paris) in demographics and liveability, #2 in economic clout, and #3 in technology readiness (tied with Amsterdam).
- Stockholm, seventh, performs particularly well in the area of sustainability and the natural environment (#1 tied with Sydney) and transportation and infrastructure (#3). In addition, the city outscores all others in two new variables, senior wellbeing and water-related business risk.
- Beijing, which retains its overall #19 spot, performs particularly well in two study indicators: city gateway (#3) and economic clout (#3).
- Eight different cities finish first in at least one indicator. Johannesburg tops all cities in competitiveness on cost, but isn’t in the overall top 10.
- While the need for risk resilience is not new, the stakes of disaster have skyrocketed with cities facing increasing risk from extreme weather, terrorism, nuclear mishaps and other manmade threats, as well as disease. This year’s study shows that the most vulnerable cities can also be the most resilient.Tokyo came top in exposure to risk and in their ability to deal with it – outperforming all other cities in natural disaster preparedness. Amsterdam has the second highest disaster vulnerability but the fifth highest preparedness.
“The consistent performance of cities like London, Paris, Singapore and New York within the top ten of Cities of Opportunity shows that it’s not only economic prosperity that drives success,” says Hazem Galal, PwC’s cities and local government sector global leader.
“Good quality of life in the city plays a fundamental role in their ability to attract and retain the globally mobile talent they need. The continued urban competitiveness of these cities rests on continuing collaboration between the businesses, policymakers and citizens who build them.”
As no two cities are the same, the study suggests each city needs to develop its own individual strategy to understand strengths, weaknesses, and identities and then orchestrate growth to suit its own profile, building on opportunities and also tackling challenges like providing affordable housing, knitting together effective public transit and reducing disaster exposure.
Top-ranking cities in individual categories are as follows:
Intellectual capital and innovation: London, San Francisco, Paris
Technology readiness: Singapore, London, Amsterdam and New York (tied for third)
City gateway: London, Paris, Beijing
Transportation and Infrastructure: Singapore, Dubai, Stockholm
Health, safety and security: Tokyo, Toronto, Sydney
Sustainability and the natural environment: Stockholm and Sydney (tied for first), Seoul and Toronto (tied for third)
Demographics and liveability: New York and Paris (tied for first), London
Economic clout: London, New York, Beijing
Ease of doing business: Singapore, Hong Kong, London
Cost: Johannesburg, Toronto, Los Angeles
An upgrade for the US, Europe and Japan is offset by downgrades for Mexico and other major emerging economies.
Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit signed a memorandum of understanding in Brussels for developing digital trade chain (DTC).
The Swedish corporate bank’s fixed income macro strategist believes rising infltaion will see the Riksbank lift rates.
ClearBank is likely to concentrate on services for fintechs, according to founder Nick Ogden who originally launched WorldPay.