London has been named the top global city by this year’s edition of A.T. Kearney's Global Cities Index, on merits of offering a strong business environment, access to top talent and the world’s best cultural experience. New York comes in second, followed by Paris, Tokyo and Hong Kong.
The global cities index has been run by consultancy firm A.T. Kearney since 2008. This year’s edition continues the trend of identifying the world’s top 125 ‘global’ cities on the basis of their ability to attract and retain global capital, people, and ideas, as well as sustain that performance in the long term. The indexes rank cities in two categories: the Global Cities Index, which examines the city’s current performance, and the Global Cities Outlook, which is a projection of a city’s potential.
The indexes are based on a range of metrics, each with different weighting. For the Global Cities Index, 27 metrics across five dimensions are considered: Business activity (30%); Human capital (30%); Information exchange (15%); Cultural experience (15%); and Political engagement (10%). For the Global Cities Outlook index, 13 indicators across four dimensions were taken into consideration: Personal well-being (25%); Economics (25%); Innovation (25%); and Governance (25%).
Top 25 global cities
The top ranked city in the Global Cities Index is London, moving up a spot from last year. The UK’s capital city offers a high level of business related activity, access to some of the world’s best educated people, adequate information exchange, and a strong cultural heritage. New York comes in second, offering a slightly stronger business environment, a comparable human capital environment, although a somewhat lower cultural experience. Paris takes the number three spot, with a comparably lower access to top talent, Tokyo and Hong Kong close the top five.
The ranking has seen little movement in city positions since the previous year, with most of the top ten global cities holding on to their spots, city state Singapore comes in at number 8, while Beijing, even with its chronic air pollution, manages to take the number 9 spot. The top 25 sees a few cities move up in their ranked position. Madrid move from 16th spot to 13th spot, while Sydney and Melbourne increase their position by 1 and 4 respectively, to 14th and 15th place respectively. Berlin moves up one spot to 16, while Amsterdam jumps three to 22nd. Toronto, however, falls four places to 17th, while Moscow too goes back four spots, to 18th.
Global outlook top 25 cities
The research also looked at the cities with the most forward looking outlook in a range of long-term success associated characteristics, such as environmental performance, safety, and innovation capacity. San Francisco came in number one, offering unparalleled strength in innovation. The city’s private investments, a proxy for venture capital, is more than double that of the next highest grossing city, New York. In addition, the city offers a strong performance in wellbeing and governance. New York takes the second spot, offering a strong economic outlook as well as a strong governance framework, while Boston takes the number three spot with a relatively strong innovation score. London, while offering considerable economic potential, falls far behind when it comes to innovation. Houston rounds off the top five.
While US cities enjoy promising outlooks, with 5 entries in the top 10, Europe too boasts a strong performance. Stockholm takes the number 7 spot, followed by Amsterdam, Munich and Zurich. Both Sydney and Melbourne, again, make the top 20 – although both Australian cities lack cutting-edge innovation potential.
In terms of the ‘Global Elite’, 15 cities rank in the top 25 of both the indexes. In the Americas, New York is placed at the top of the list, followed by Los Angeles and Chicago. The only non US city in the region on the list, Toronto, takes the number four spot. In the EMEA region, London takes the top spot, followed by Paris. Brussels comes in third, followed by Berlin, with Amsterdam closing the top five. In the Asia-Pacific region, Tokyo is number one, followed by Singapore, with Sydney and Melbourne taking spots three and four.
London vs New York
The research found that London has managed to steadily climb the rankings since 2008 to become the most global of global cities. This year, London performed better in two of the five dimensions: cultural exchange and business activity. Even though New York maintained its top position in human capital, London closed the gap. London has also seen noticeable improvement in information exchange, while New York’s political engagement has dropped 10% as London’s has increased 33%.
Andres Mendoza Pena and Mike Hales, both Partners at A.T. Kearney in Chicago and co-authors of the study, state: “Together, the Index and the Outlook provide a unique look at 125 of the world’s largest and most influential cities today and those primed to make an impact in the future. Taken together, results from this year’s study can help businesses make key investment decisions such as where to place regional and global headquarters, as well as manufacturing and research hubs.”
The importance of cities is forecasted to rise in the coming decades. According to the United Nations, up to two thirds of the world’s population will be living in an urban environment by 2050.