Three indicator categories—economic clout, ease of doing business, and cost—measure the overall economic and business standing of 30 global cities.
London remains top of the class here and does so with an even stronger performance than in the last edition. It opens up breathing space between it and second-place New York, which switches position with third-place Beijing (#2 in our last report to New York’s #3). Although it doesn’t rank #1 in any variable, London is the only city of our 30 that finishes in the top 10 in every one of the six, again showing the balanced strengths. San Francisco rises to fourth place from seventh and Sydney finishes sixth, up an impressive seven places since 2014. Shanghai drops to seventh from fifth, Paris falls to eighth from fourth, and Singapore declines to ninth place from its previous sixth. Amsterdam, once again, finds itself in the top 10, ranking #10, tied with Stockholm.
The Swedish capital, along with Madrid, in fact, is part of one of the most striking improvements in economic clout this year. Stockholm, which tied Spain’s capital for #17 in the last edition, is in 10th place this year, with improved GDP growth helping. But Madrid has done even better, rising 12 spots to finish #5 out of 30 cities. In doing so, the Spanish capital went from dead last in GDP growth in our last report to edging the top 10 this time at #11. It also registers the best job growth of any European city, finishing fourth overall just behind Lagos, San Francisco, and Kuala Lumpur in this critical variable.
Pak Ahok tells PwC’s Julian Smith why official corruption is so corrosive for city life and what needs to be done to improve transit, education, housing, and parks in one of Asia’s emerging megacities.
Singapore repeats as first in this indicator for the third straight edition, with Hong Kong follows in second place for the third straight time as well. In fact, these two Asian cities have finished #1 or #2 since 2008—clearly, the kind of rock-solid results that are built on years of success and achievement.
The only significant difference over the last few years is that, for the first time in our report, New York falls out of the top 5, dropping to seventh place, due mostly to a drop of 11 places in ease of starting a business and a low score in tax efficiency (#20), as well as the effect of the removal of the employee regulations variable, in which New York had performed best in 2014. New York has now been replaced as #3 by London, which climbs two places and also finishes in the top 10 in six out of eight variables and #11 in the other two. Toronto remains in fourth place. In fifth and sixth, two European cities have risen significantly since our last report—Stockholm in fifth and Paris in sixth, climbing five and eight places, respectively.
The inclusion of housing and personal tax costs have underlined the high price of life in some of the world’s most in-demand cities, and spotlighted the issue of affordability if cities hope to keep attracting talented young people and serving as a home for the middle-income. New York tumbles from #9 last time to #25 now. London falls from #15 in our last edition to #26 now. This is also the British capital’s worst performance in the 10 indicators. And Paris does worst of all among the traditional triad of cosmopolitan Western cities, finishing 27th out of 30—again, its worst performance.
The combination of high personal tax rates, high cost of living, and high costs of rent for both businesses and individuals adds up to a challenging environment for these cities. It is important that this continual rise in costs be kept from spreading beyond the traditionally expensive urban enclaves—or, at least, that it be tempered as it does so, so that young persons, middle-income earners and seniors can all afford to live in and help to build and enrich life in great cities.
Global Leader, Government & Public Services, PwC US
Cities & Local Government Sector Global Leader, PwC US