Economic views

  • We expect to see a general shift of the world’s largest clusters from developed to emerging and developing nations as the centre of global economic gravity continues to shift towards these countries. This shift is unlikely to be uniform across the five industries we examine here. For automotive assembly, it is already well underway and set to continue apace. For pharmaceuticals, asset management and filmed entertainment, Asian clusters in particular are rising – but we expect developed economy clusters to retain top position. While for industries such as tertiary education, we expect clusters in today’s developed economies to remain significantly ahead of those in developing economies in the medium to long term.
  • The large increase in the share of world GDP represented by Asia over the next 30 years, helped by the expected rapid growth of economies such as China and India, should aid the development of dominant clusters in the region. This is likely to be especially apparent in industries that can benefit from large economies of scale. The top locations within Asia of some of these clusters have not yet come to light. Our expectations are that for filmed entertainment Mumbai may beat Shanghai, while for asset management we expect Singapore to beat Hong Kong and for pharmaceuticals we expect to see Shanghai emerging as the regional centre. The automotive sector currently tends to be somewhat more dispersed than the others – but we expect to see key hubs develop in China around the Nanjing/Shanghai area and Tianjin/Beijing.
  • In the pharmaceutical industry we expect that the cluster in Shanghai will grow to become one of the world’s most significant. However, we also expect the current leading clusters in New York and London to remain the largest. The increased affluence and aging populations in emerging markets will benefit centres such as Shanghai through boosting demand for healthcare. However, developed market centres such as London and New York benefit from their proximity and linkages with world class academic institutions which will support their continued function as major clusters in the sector.
  • Growing automotive assembly clusters around Tianjin, Nanjing and Sao Paulo may rise to be amongst the world’s largest by 2040. The growth of the middle classes in China, India and South America will add hundreds of millions of potential car owners to the world market between now and 2040. This will require an enormous increase in production capacity in these regions.
  • In asset management we expect the existing large clusters in New York, London and Boston to be joined by Singapore, which may become the leading cluster in the Asian region. Tighter regulation and higher taxes are currently working against clusters in the United States and Europe but the key factor will be the increase in public and private capital available in Asia – which will fuel growth in asset management in the region.
  • In the filmed entertainment sector Los Angeles, or Hollywood, has been the dominant cluster for many years and is the most globally recognised centre for film and television production. We expect Hollywood to retain this position up to 2040, however, it will face growing competition from rising film production clusters around Mumbai and Shanghai which are increasingly moving into mainstream productions.
  • We expect that New York, London and Boston will remain the principal tertiary education clusters over the next 30 years due to the depth of quality universities they currently host, as well as offering environments in which these clusters can flourish. Many emerging and developing nations are investing heavily in tertiary education clusters, which are likely to improve significantly over the next 30 years. However, we do not expect them to surpass the existing top tertiary clusters in this timeframe.