Move over London, New York, Paris, and Tokyo. Make way for a new breed of emerging global cities. A recent study that looked at 21 of the world’s strongest finance and commerce hubs has found that though those powerhouse cities still dominate in certain key quantitative indicators like economic clout or strength of currency, the world’s so-called second cities may have more to offer qualitatively.1 For instance, Chicago, Singapore, Stockholm, Sydney, and Toronto excel in quality-of-life indicators, such as intellectual capital, sustainability management, and city livability. Put differently, the most desirable cities socioeconomically may be the most well-balanced ones that offer both resources to businesses and livability to residents.
One of the keys to a well-balanced city is what might be called “smartness.” Intellectual capital is at the core of a city’s appeal; a strong intellectual base not only attracts investment but can also foster innovation. On the flip side, a brain drain deflates a city’s potential for vibrancy. A more educated population is a strong indicator of intellectual capital, as is the presence of well-regarded institutions of higher learning. Stockholm, for example, leads with the highest percentage of higher-educated people, followed by Paris and Tokyo. London and Singapore offer the largest share of top business schools, whereas Paris and New York have the largest share of top 500 universities.
Sustainability has become increasingly important to urban city planning, businesses, and residents alike. According to the study, the greenest city is Stockholm. The Swedish capital scored the highest in air quality and percentage of green space. It also led in the indicator green cities—a composite of raw data such as garbage production per capita, gasoline and electricity prices, smoking laws, and private vehicles per capita. Seoul and Sydney are also well-planned sustainable cities, topping the ranks in recycled waste and smallest city carbon footprint, respectively.
Aside from smart and green, a city should also be livable. Looked at from the standpoints of education, infrastructure, culture and environment, healthcare, and stability as city livability factors, second cities overtake the power cities of New York, London, and Paris. Toronto, Sydney, and Stockholm all provide greater quality of life with regard to livability. Cities should also provide the right balance of demographics to create a cosmopolitan atmosphere. Diversity of population, for example, is an important indicator in any major metropolis, as diverse nationalities and ethnicities suggest that a city is open to new peoples and ideas.
To no one’s surprise, New York and London lead with respect to diversity, but Toronto, Chicago, and Sydney also attract a significant number of people from around the world.
Despite the rise of the second cities, the traditional powerhouses of New York, London, Paris, and Tokyo are still attractive hotspots. But such cities also face challenges from emerging and maturing cities that increasingly offer better livability and affordability for both businesses and residents.