London loses top spot of world's 25 most influential cities

03 August 2017 Consultancy.uk

London has lost its number one spot on the Global Cities Index, after the latest edition of the annual report found New York had overtaken the UK capital. The Index, which maps the world’s most influential cities today and tomorrow, also found that San Francisco was the city with the brightest outlook.

The latest edition of the Global Cities Index, maps the world’s most important cities, as well as the cities that exhibit the most potential for the future. The Index, which was developed by A.T. Kearney, a global strategy consulting firm, is developed from 27 metrics across 5 dimensions, in relation to current performance, and across 13 indicators across four dimensions, in relation to potential. The data for both indexes are derived from city-level data.

Top 25 City Index

Business activity and human capital metrics are the biggest contributors, at 30% apiece, with the total weights determining the final rank and score. In terms of potential, personal well-being, economics, innovation and governance each contribute 25% to the final score. The rank and score, however, is “averaging rate of change across each metric using the past five years' data. then projecting out to 2027. Weighted averages applied to each dimension to yield a score."

Top 25 City Index

This year shows New York has regain its spot at the top of the Global Cities Index. The city, has high levels of business activity – home to wall street – high levels of quality human capital, and relatively strong political engagement and cultural experience. London takes the number two spot, usurped by New York – the latest ranking for Britain’s capital city to have fallen down, having earlier also lost out as the top European city for hotel investment to Amsterdam. London’s business activity score is slightly below that of its main rival, while human capital is relatively equal, while it performs strongly on cultural experience. Paris rounds off the top three, with around 10 points below New York. The city has a strong business environment, but lacks access to human capital.

Tokyo and Hong Kong score fourth and fifth respectively, with both offering a strong business environment, but relatively weaker human capital scores. Singapore comes seventh, improving two spots on last year, while Chicago retains its eighth spot – falling short on business environment. Los Angeles, Beijing and Washington DC, complete the top ten. Beijing scoring highly on business environment, while LA has a strong performance in human capital.

Global cities outlook

Risers in this year’s report include Berlin, up two; Toronto, up one; Shanghai, up one; Boston, up three; and Barcelona, up two. Some fell meanwhile, with Seoul down one spot, while Sydney lost three spots to fall to number 17.

Top 25 outlook

In terms of future potential, San Francisco leaders, largely due to its strong performance in innovation – it comes in 23 in the top 25 Index. New York takes second spot, with strong across the board performances – highest in economics and falling behind in innovation. Paris rounds out the top three, with relatively strong performances in all metrics bar innovation; and up from number 13 the year previous.

London here takes a backseat, with a weaker score on innovation and economics affecting its outlook. The Brexit vote of 2016 has left numerous key industries doubting their future in London, with a recent report from consulting firm Oliver Wyman predicting as many as 40,000 investment bankers could be on the brink of leaving the City of London financial district. Boston, meanwhile, loses one spot to fall from number three to number five. Melbourne has seen its ranking jump from #15 to #6, on the back of the strongest score in personal well-being of the cities listed. Moscow too sees its score improve significantly, from #35 to #10, while Amsterdam and Atlanta have both plummeted by 8 and 11 spots respectively.

Global elite are in top 25

In terms of a combined score, various cities perform strongly in both scores. The EMEA is led by London, which stands at #2 on the Index and #4 on Outlook, while Paris comes second, at #3 and #3 respectively. Berlin is third, with a #14 Index spot and #18 Outlook.

In the Americas, the top five is dominated with US cities, with New York at number one, with a #1 Index and #2 Outlook score, followed by Chicago and LA. Toronto is the only non-US entry, taking the number five spot with an Index placement of #16 and Outlook placement of #20.

Tokyo is the number one contender for the Asia Pacific region, with an Index score of #4 and an Outlook score of #23. Singapore takes the number two spot for the region, followed by Melbourne and Sydney.

2017 Global Cities Index leaders

In terms of various metric outcomes, various cities have lead. In the business activity dimension, Beijing leads the Fortune 500 metric, while London is the top for global services firms. New York is the top of capital markets, while Paris leads in ICCA conferences. For the human capital dimension, New York leads in Foreign-born population, while Tokyo in terms of population with a tertiary degree. London has the highest number of international students.

London does have three top outcomes in cultural experience however; leading visual and performing arts, sporting events and international travelers. Moscow leads on museums, while New York has the top culinary offerings. Political engagement sees Brussels win on political conferences and embassies and consulates, while Geneva boasts the most international organisations.

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