London is again the top ‘city of opportunity’, according to a yearly published study. The UK capital performs strongly across almost all metrics, hobbled only by cost. Singapore comes in second spot, followed by Toronto, Paris and Amsterdam. The poorest performer in this year’s index is Lagos, followed by Mumbai. Lagos can take some solace in the fact that, of all cities, it is by far the fastest growing, at an annual rate of 6.5% over the next 15 years, while London is projected to sustain only 3.0% annual growth in the same period.
PwC’s 2016 edition of the ‘Cities of Opportunity Index' highlights the top global cities based on their combined performance across ten dimensions, which considers everything from their demographics to business potential, infrastructure and costs. This year’s edition, which is based on data sets from 2014 and 2015 – thereby not taking into account the effects of Brexit in the UK – is expanded on previous editions with 15 new variables and a tweaking of a further 12.
The aim of the study is to provide deeper insight into a phenomenon of cities, which are having an increased impact on the lives of people and the planet, as urbanisation and the wider environmental impact of cities increases.
Top ten cities of opportunity
The top performer in this year’s analysis is London. The city has come first in three metrics: it a hub of intellectual capital and innovation, it is the city gateway and has the biggest economic clout. In addition, the UK’s capital comes second in demographics and livability and third in the ease of doing business. The only indicator in which the city performed poorly is cost, coming in at number 26 – which, given the high demand for areas in which the city excels, comes, according to the firm’s analysis, as no surprise.
Another recently released ranking on the attractiveness of cities, conducted by A.T. Kearney, also put London in pole position. The potential departure from the European Union may however put London's dominance at risk, in particular in the Financial Services industry.
The city state of Singapore comes second in PwC's study, and is also first placed in three categories, including technological readiness, transportation and infrastructure and ease of doing business. It does poorly in demographics and livability and cost, affecting its overall performance. Toronto, Canada’s largest city, comes in third. The city has a strong performance across the ten dimensions ranked, particularly in one of the most important metric for residents: the city’s quality of living sub-metric was rated as #1.
Paris takes the number four spot. The city has a strong performance across the board, coming in the top 10 in nine out of our 10 indicators. The major let down for the city is its cost indicator, the city is slightly more expensive than London. Amsterdam closes off the top five. The Dutch capital is a new entrant to this year’s ranking, buoyed by the introduction of new indicators. The city has a strong performance in digital infrastructure and technology metrics with a #1 position in internet access in schools, #2 in mobile broadband speed and #3 in ICT Usage.
New York is placed at number six in the ranking, buoyed by a strong performance in demographics and livability, but pulled down by cost and sustainability and natural environment. Stockholm, San Fransisco, Hong Kong and Sydney round off the top ten.
The poorest performers in the firm's analysis include Lagos, Mumbai and Jakarta. Lagos performs very poorly in almost all metrics, pulled up slightly by its performance in economic clout. Mumbai, while scoring considerably higher than the worst placed city, has few areas in which its performance is competitive. Rio de Janeiro takes the number four spot, while Bogotá completes the top five, with a particularly poor performance in being a city gateway, holding back its ranking. Johannesburg, at seventh spot, while performing poorly in technological reediness, is the cheapest city on the list. Mexico City takes the number eight spot, Moscow the number nine spot, brought down by health, safety and security, and Shanghai comes in at number ten.
As part of the study, the firm also considered the growth rate of the various cities ranked. The research highlights that, while emerging cities tend to rank relatively poorly on the index, their annual GDP growth rates between 2015 and 2030 are relatively high. Lagos, for instance, has a growth rate of 6.5%, while Jakarta is projected to grow at a rate of 5.6%. Shanghai and Beijing take the third and fourth spots, with growth rates of 5.5% and 5.2% respectively, while Kuala Lumpur rounds of the top five with a growth rate projection of 4.6%.
The leading developed city in the list is San Francisco, home of many of the world’s tech giants, whose growth rate is projected to be in the order of 3.7%. London is projected to grow by 3.0%, although this was previous to the Brexit decision. Amsterdam is projected to grow by 2.2%, while Berlin by a lowly 1.2%. Tokyo too has a low growth rate forecast, of just 1.0% per year over the coming 15 years.