PwC: London retains status as globe's top city for Opportunity

22 September 2016 Consultancy.uk

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.

Rankings at a glance

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.

Rankings at glance

Bottom 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.

Growth, work, and the trends

Growth opportunity

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.

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”