New York, 10 October 2012 – Though New York and London lead cumulative scoring, emerging cities, including Beijing and Shanghai, are narrowing the gap within key economic indicators, according to the fifth edition of Cities of Opportunity released today by PwC and the Partnership for New York City.
While New York officially edges out London by one point across 10 economic indicators, the city wins in no individual category. Toronto, which finishes third, also shows great balance yet wins no category. London, however, takes the lead in "city gateway," an indicator introduced this year that measures global interconnectedness and international attraction. Rounding out the leaders are Paris, which advances four spots from 2011 to number four, and Stockholm at number five.
In addition to looking at the current performance of 27 cities that are global capitals of finance, commerce and culture, the study for the first time analyzes city employment in the most significant and telling job sectors and projects the trajectory of the cities in jobs, economic output, and population to 2025.
"Cities succeed when they invest in core needs important to both people and businesses," said Bob Moritz, PwC's US Chairman and Senior Partner. "When a city invests continuously and aggressively in critical areas, including education, healthcare, safety and infrastructure, it creates a healthy urban environment. Entrepreneurs and businesses thrive, the city economy grows, and long-term resiliency follows."
“The Cities of Opportunity report is a detailed and insightful analysis of how leading global cities stack up against one another,” said Partnership for New York City President and CEO Kathryn Wylde. “New York City and London, along with other established cities, maintain their top status because of a depth and diversity of strength across all measures. But the true value of this report is not just the rankings; it is that every city can learn from one another about what works when building a 21st century city.”
The Cities of Opportunity key indicators and top three cities within are:
Beijing advanced to the top spot in "economic clout" while Shanghai placed fifth behind Paris, London, and New York. This is the first time two emerging cities appeared in the top five of this indicator category.
Beijing and Shanghai are also in the top five in a new category, “city gateway,” along with London, Paris, and New York. Balanced progress across a range of social and economic indicators represents the next step for these cities in transforming exceptional growth into sustainable performance for these emerging cities.
For the first time, the 2012 report provides an in-depth look at some of the most significant and telling job sectors, now and looking ahead to 2025. The financial and business services, manufacturing, and wholesale and retail sectors anchor many city economies in 2012. Financial and business services when grouped together account for more than a third of the jobs in Milan, Paris, London, Beijing, San Francisco and Stockholm. One in three Shanghai jobs today is in manufacturing, although the study projects the city shifting to a more diversified economy by 2025. Wholesale and retail make up more than 20 percent of the workforce in Hong Kong, Kuala Lumpur, Moscow, Mumbai, Mexico City and Istanbul. New York leads the world in healthcare employment with nearly 16 percent of its workforce in the field, while Abu Dhabi takes the lead in hospitality and tourism.Our Cities Tomorrow Future employment and economic risks for the 27 cities are pinpointed in a new section that projects a 2025 baseline scenario and several “what if” models, including:
The study's baseline scenario projects that by 2025 an additional 19 million individuals will live and 13.7 million will work in the cities. They will generate an additional US $3.3 trillion in gross domestic product—all predicated on a world of modest growth. At the same time, the wealth divide will remain much the same in 2025 as it does today. Population and employment will surge in cities like Beijing, Mumbai, Istanbul and São Paulo. Mature cities will maintain greater spending power and the consumer and corporate demand that drives emerging economies. Mutual self-interest would logically unite emerging and mature cities as one side continues to need the other.
Despite the rise of emerging cities in key indicators, Cities of Opportunity details some of the long-term challenges facing developing cities due to rapid growth. For example, both Beijing and Shanghai will need to devote roughly 42 percent of GDP to infrastructure between now and 2025 to accommodate growth while cities like London and New York only need to invest 17 percent and 20 percent, respectively.
Cities of Opportunity is a continually evolving project created for cities, their leaders, businesses, and citizens seeking to improve their economies and quality of life. The report is based on publicly available information supported by extensive research. Three main sources are used: Global multilateral development organizations such as the World Bank and International Monetary Fund, national statistics organizations, such as UK National Statistics and the US Census Bureau, and commercial data providers. The data were collected during the latter half of 2011 and first quarter of 2012. In the majority of cases, the figures used in the study refer to 2010 and 2011 data. In some cases, national data are used as a proxy for city data. Care has been taken to ensure that, where used, national data closely reflects city data. The scoring methodology was developed to ensure transparency and simplicity, as well as comparability across cities.
Taking the data for each individual variable, the 27 cities are sorted from the best performing to the lowest performing. The cities are then assigned a score from 27 (best performing) to 1 (lowest performing). Once all 60 variables are ranked and scored, they are placed into their 10 indicators. Within each group, the variable scores are then summed to produce an overall indicator score for that topic. This produces 10 indicator league tables that display the relative performance of our 27 cities.
Methodology presented for The City Tomorrow section can be found on page 14 of the report.
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The Partnership for New York City’s (www.pfnyc.org ) mission is to engage the business community in efforts to advance the economy of New York City and maintain the city’s position as the center of world commerce, finance and innovation. Through the Partnership for New York City Fund, the Partnership contributes directly to projects that create jobs, improve economically distressed communities and stimulate new business creation. Partnership companies account for nearly seven million American jobs and contribute over $740 billion to the national GDP.