Despite Brexit, London tops PwC's Global Cities of Opportunity Index

news
07 September 2016

London retains the top slot as a centre for business, commerce and culture in PwC's latest Cities of Opportunity Index of 30 major global cities. Economic clout, reputation as a city gateway, ease of doing business, universities, innovation, entertainment and attractions are all reasons why London is the number one global city of opportunity.

For the second time in a row, London performs strongly across the range of indicators that measure the performance of major international cities. The findings show London significantly extending its lead across the performance indicators by 6.5 per cent ahead of its closest rival Singapore, followed by Toronto, Paris and Amsterdam.

The economic power of the British capital is reinforced as it takes top spot comfortably ahead of the two global powerhouses - New York and Beijing. Madrid is the surprise city, making huge advances to turn the spotlight on mainland Europe with improved GDP and the best jobs growth of any European city.

According to David Snell, PwC partner in London, ''Change is ahead and it remains to be seen what impact the UK's decision to leave the EU will have on our vibrant city. London is one of the world's leading financial centres and financial services will continue to make a major contribution to the UK economy.

"The sector accounts for 8 per cent of total UK economic activity and directly employs 1.1 million people - around 3.6 per cent of the total UK workforce, generating income, investment and exports. This is a major opportunity for financial services firms to work with regulators, investors and clients in order to shape a new rulebook fit for the new climate.''

Nevertheless, London continues to be the supreme gateway city and stands out as the global hub for business and leisure travel. The strong performance is due to the city's ranking in variables such as hotel rooms, international tourists, number of international meetings, incoming and outgoing passenger flows and airport connectivity.

London is a major intellectual centre and its focus on innovation and intellectual property is also rewarded with top position this year, ahead of San Francisco and up from last year's number two spot.

A strong performance is also seen in the quality of universities and access to libraries. In this category London is one of the top cities best suited for young people aged between 15 and 29 in variables such as: how youth live, work and play in their urban setting.

The UK capital also stands out not only for the maturity of its technology, but also for the diversity of its cultural offering. It also came top in its attractiveness to employees looking to relocate.

Snell adds, ''Brexit will bring challenges, but it's important we remain positive. If Brexit has effects on London, they will play out in a process over time in areas like talent mobility, trade and regulation. But it is worth remembering that London is resilient, agile and great at adapting. London is open for business and we must seize the opportunities that lie ahead.

''The consistent performance of London across a range of measures shows that its success goes much deeper than economic might alone. London's cultural vibrancy in particular, significantly contributes to its strength and standing on the world stage. Those that live and work in London are proud and passionate for what our city stands for.

''This great city continues to have a lot to offer, and a lot to protect, in terms of its history, culture, business and financial leadership. The growing tech city in Shoreditch, creative industries in Soho and the concept of connecting across the regions will offer huge potential and will benefit the capital and the country in the years to come.''

  • London beats all other cities in terms of its economic clout, intellectual capital and innovation
  • London is the supreme gateway city and the global hub for business and leisure travel
  • Brexit will bring challenges and opportunities but London remains agile and resilient
  • Good quality of life proves to be a winning ingredient for city success

However, reaching the top doesn't come without a price. London is the most expensive city for business occupancy and the cost of living. There is also room for improvement when it comes to sustainability. And, while London has one of the best transport systems, affordability is a big issue.

The  top three cities within each key indicator are:

  • Intellectual capital and innovation: London, San Francisco, Paris
  • Technology readiness: Singapore, London, Amsterdam
  • City gateway: London, Paris, Beijing
  • Transportation and Infrastructure: Singapore, Dubai, Stockholm (London 8th)
  • Health, safety and security: Tokyo, Toronto, Sydney (London 8th)
  • Sustainability & the natural environment: Stockholm and Sydney (tied for first), Seoul and Toronto (tied for second), Amsterdam (London 13th)
  • Demographics and liveability: New York and Paris (tied for first), London, Los Angeles
  • Economic clout: London, New York, Beijing
  • Ease of doing business: Singapore, Hong Kong, London
  • Cost: Johannesburg, Toronto, Los Angeles (London 26th)

Commenting on PwC's Cities of Opportunity Index, London mayor, Sadiq Khan, said, "I'm very pleased that this report reaffirms London as the leading global city in terms of economic importance, intellectual capital and innovation. This is the best city in the world; it's open for business, creative, entrepreneurial, agile, full of opportunity and a hub for business and leisure travel.

''Despite the recent vote to leave the European Union, there is no doubt that this will continue to be the best place in the world to do business. I am determined to make the capital an even more prosperous city and to spread the opportunity it brings to all Londoners.''

The study reinforces the need for a balance of social and economic factors across the community as a whole. It finds high scores in the human elements of urban life including good quality of life, senior wellbeing, housing, literacy and enrolment, and disaster preparedness.

Snell concludes,''Over half the world's population lives in cities, and they represent engines of regional\or countries' economies. A good life is not a luxury, it's a basic requirement for cities and businesses to attract and retain talent. Strong performing cities are those planning and providing across all the measures of the long term quality of life of its people. Having the infrastructure in place social, economic and physical builds stronger communities and in turn the resilience of the city no matter what it faces.''

PwC's top Cities of Opportunity:

Cities of Opportunity's comprehensive measurement of major centres of business, commerce, intellectual capital and culture, highlights the complex economic and policy challenges cities face to succeed. Each city's score is the sum of its rankings across variables/ performance indicators.

  • Singapore, the city-state renowned for its planned development, comes in second up from third position in 2014. In addition to ranking No1 in three indicators technology readiness, transportation and infrastructure and the ease of doing business the city performs well in the area of tax. An analysis of corporate total tax rate, personal rate, and tax efficiency shows that Singapore, along with Dubai and Hong Kong, have the lowest rates and highest efficiency collectively.
  • Toronto, third in the study, ranks in the top 10 in seven of 10 indicators, and does particularly well in categories that speak to the daily needs and concerns of urban residents finishing second in health, safety and security; second in cost; and third in sustainability and the natural environment (tied with Seoul).
  • Paris rises to fourth position overall from sixth in 2014 despite a decade of economic pressure and more recently, terror attacks. Paris performed strongly across the measures, the only city to make the top 10 in 9 out of 10 indicators. It returns to first in demographics and liveability overall, tying New York. Paris also bounces back to 2nd as a city gateway after falling to 7th in 2014.
  • Amsterdam enters the study for the first time this year in fifth position. The city finished in the top five in three indicators (intellectual capital and innovation; technology readiness; and sustainability and the natural environment). It also finished in the top 10 in a further four indicators (city getaway; health safety and security; demographics and liveability; and economic clout), challenging the traditional urban powerhouses.
  • New York At No 6,remains part of a global urban elite but drops from second position in 2014 and first-place rankings in the editions before that. The city scores lower in many of this year's newly-introduced measures and is overtaken by other cities' gains in existing variables. It needs to improve substantially in sustainability and the natural environment, and health, safety and security (both #16) as well as cost (No 25). On the upside, the city finished No 1 (tied with Paris) in demographics and liveability, No 2 in economic clout, and No 3 in technology readiness (tied with Amsterdam).
  • Stockholm, seventh, performs particularly well in the area of sustainability and the natural environment (No 1 tied with Sydney) and transportation and infrastructure (No 3). In addition, the city outscores all others in two new variables, senior wellbeing and water-related business risk.
  • Beijing, which retains its overall No 19 spot, performs particularly well in two study indicators: city gateway (No 3) and economic clout (No 3).

Eight different cities finish first in at least one indicator. One of them Johannesburg tops all cities in competitiveness on cost, but isn't in the overall top 10.

While the need for risk resilience is not new, the potential for disruption have skyrocketed with cities facing increasing risk from extreme weather, terrorism, nuclear mishaps and other manmade threats, as well as disease.

This year's study shows that the most vulnerable cities can also be the most resilient; Tokyo came top in exposure to risk and in their ability to deal with it outperforming all other cities in natural disaster preparedness.

Amsterdam has the second highest disaster vulnerability but the fifth highest preparedness.





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