A new study compiles a list of the world's most global cities, weighing financial as well as cultural and political influence
We're in an era not only of rapid globalization but also of urbanization. According to the U.N., 2008 marks the first year when more of the world's people live in cities than in rural areas. One result is that the influence of cities—in politics, business, and culture—has never been greater.
To understand how simultaneous globalization and urbanization are affecting everything from international politics to corporate behavior, management consulting firm A.T. Kearney teamed up with the Chicago Council on Global Affairs and Foreign Policy magazine on a major study of the world's cities. The results, released this month, use a variety of metrics to rank cities according to how "global" they are, and thus, how well they fare in an increasingly competitive battle to attract and retain people, capital, and ideas.
The winners? New York came out on top, not just due to its role as the world's leading business and financial center but also its vibrant cultural life and heavy concentration of international organizations, from the U.N. to embassies and think tanks. The second- and third-place cities, respectively, were London and Paris, thanks to attributes similar to New York's.
What differentiates the A.T. Kearney study from many others is its use of "softer" factors, such as quality of life. Similar studies in the past have tended to focus primarily on business activity as an indicator of where cities rank on the global stage. But such a narrow view is increasingly inadequate, argues Paul Laudicina, managing officer and chairman of A.T. Kearney. For that reason, the Global Cities Index ranks cities based on business activity, human capital, and information exchange but also tosses in two broad categories called cultural experience and political engagement.
Megacities on the Rise
Laudicina notes that cities often provide the most reliable indication of regional success. "The city predates the nation-state by thousands of years," he says. Countries, on the other hand, have tended to be fairly unstable over time. Cities also are continuing to evolve as millions more people leave rural areas in search of work and freedom. According to the U.N., the number of "megacities" around the world, where the population exceeds 10 million, should rise from 19 now to 27 by 2025.
The top cities on the index—which also include Tokyo, Hong Kong, and Los Angeles—aren't surprising, given their financial markets and sophisticated business climates. But their positions as global leaders also are bolstered by the presence of top-quality universities, world-class museums, international cuisine, and culturally diverse populations. New York, for instance, has the world's largest foreign-born citizenry and Tokyo boasts the largest number of inhabitants with university degrees.
Laudicina says the index also helps to explain why businesses choose headquarters in places that can present considerable cost disadvantages. A good example is the San Francisco Bay Area, ranked 15th, where real estate prices and taxes are among the highest in the U.S. The region is made more appealing, Laudicina says, by high quality of life, the prevalence of multidisciplinary academic and scientific research, and other cultural dimensions.
The index reveals another trend, too. Cities in emerging economies, such as Beijing, Moscow, Shanghai, and Dubai, eventually may dislodge the old guard. China's industrial explosion and Russia's recent oil and gas boom have pulled in tourists, foreign investment, and internal migrants looking for the fruits of prosperity.
Rapid Urbanization
It's not yet clear how the current crisis will affect next year's rankings, Laudicina says, but some shift is likely. Cities in wealthy countries most directly linked to global finance could see their numbers slip. In poorer countries, infrastructure will be the main problem. "If global conditions worsen, you will see growth in people migrating to cities for what they see as better economic opportunities," he says. Rapid urbanization, which is absorbed by sturdy municipal infrastructure in wealthy countries, can be devastating in poorer ones. Sewer systems, health facilities, housing, and schools all would likely suffer, Laudicina says.
Cities in the middle—places like Buenos Aires, Beijing, and São Paolo—may fare the best. Though they, too, are challenged by infrastructure problems, they're also less exposed to continuing problems in financial services and could see their rankings rise. Moscow, which might otherwise have fit this category, faces a particular problem, Laudicina says: Much of its current prosperity has derived from energy and natural resources, but now that prices for commodities have fallen, the Russian capital may take a hit.
What's most important about the Global Cities Index, Laudicina says, is that it provides perspective at a time when the value of globalization is being called into question. "We are at a very critical crossroads right now," he says, recalling a collective retreat in the 1930s from an earlier trend to globalization. "Will we continue to keep making decisions that keep our borders and our minds open?"
When pressed to name the world's top cities, most of us would probably rattle off a few places with obvious political and economic clout: New York, London, Paris, Tokyo…you know, the usual suspects.
But in a globalizing world, a city's business climate and government alone are no longer adequate measures of what makes it truly global—and thus attractive to companies and employees. That's why management consulting firm A.T. Kearney, along with the Chicago Council on Global Affairs and Foreign Policy magazine, conducted a study examining the character, influence, and reach of some of the world's greatest urban areas.
The Global Cities Index, released this month, ranks the world's top metropolises by measuring dozens of attributes grouped into five broad categories: business activity, human capital, information exchange, political engagement, and cultural experience.
The leading cities on the list—surprise, surprise—are New York, London, and Paris. But many emerging countries can be proud that their capitals and other major cities are fast becoming challengers to long-recognized leaders.
No. 1: New York
A.T. Kearney ranks New York the world's most global city—and not just for its bistros, bagels, and bodegas. This "city of neighborhoods," which has the largest foreign-born population of any metropolis in the world, finds Albanians, Afghans, and Armenians living side by side with Poles, Pakistanis, and Puerto Ricans. The Big Apple's rich cultural patchwork is reflected in its international cuisine, where it ranks No. 1. Its top-ranked capital markets are still the driving force for the world's economy. And as home to the U.N., the city comes in first worldwide for the number of embassies, consulates, and trade missions. New York also gets high marks as the preferred headquarters for Global 500 firms (behind only Tokyo), its wealth of nongovernmental organizations, and its performing arts scene.
No. 2: London
The erstwhile imperial city on the Thames was once the British Empire's seat of power, with sway over a quarter of the world's population. Today, though London holds no sovereign claim over its former colonies, the city's legal, linguistic, and literary influence still resonates in the far corners of the globe. Besides ranking first for its numbers of international travelers and nongovernmental organizations (NGOs) with global reach, London also ranks second in the world for attracting foreign students to its elite universities, for hosting international sporting events, for its number of think tanks, and for the number and quality of its museums. It is also strongly situated as a center of higher education, diplomacy, and finance.
No. 3: Paris
French may no longer be the dominant international language of diplomacy, but French citizens still can be proud that their capital remains the standard-bearer for a host of other attributes, making it the No. 3 most global city. Paris' world-class dining, hundreds of museums, and high-quality universities continue to inspire residents and visitors alike. And while Versailles is no longer an obvious venue for signing treaties, Paris remains, as it has for centuries, a hub of global diplomacy, ranking fifth in the number of consulates, embassies, and trade missions it hosts. Plus, it's just plain beautiful.
No. 4: Tokyo
The sun continues to shine on Japan's vivacious capital. With the highest number of Global 500 companies in the world calling Tokyo home and a highly educated population—Tokyo boasts the world's highest ratio of university-educated residents—Japan's largest city is certain to remain a global leader. But Tokyo isn't just all work and no play. Visitors and residents have countless choices for dining out: Tokyo's international cuisine is ranked second worldwide. The city also finishes a respectable seventh in the availability of museums.
No. 5: Hong Kong
Once a glittering jewel of the British Empire's claim to the East, Hong Kong continues to sparkle as the world's fifth most global city. As a major gateway to trade in Asia, the city, now a special administrative region of China, ranks second in the world (behind Singapore) for its port throughput and international air freight. The children of expatriates living and working in Hong Kong enjoy top-quality international primary and secondary schools, for which it comes in third. A multitude of international dining options as well as the presence of many "Top 40" corporations help boost its global position.
No. 6: Los Angeles
With its Spanish name and busy airport that welcomes many trans-Pacific airline passengers, America's second-largest city is a nexus of cultures and an obvious player on the global stage. The sprawling coastal metropolis is home to the second-largest immigrant population of any city on earth, with Spanish, Chinese, and Korean—among many other languages—regularly heard on the streets. L.A. also ranks third in international sporting events and fourth for availability of performing arts venues, influenced no doubt by the Hollywood film business that has carved L.A.'s image into the minds of moviegoers the world over.
No. 7: Singapore
As a major hub for international business and finance, this city-state of 5 million people in Southeast Asia ranks seventh among the world's most global cities. Singapore is most notable for its port activity, where throughput is higher than any other city in the world. Corporations are heavily drawn to the multi-ethnic city, whose government is trusted as reliable, efficient, and hands-off in maintaining an inviting business atmosphere. Singapore ranks third in conferences hosted for international associations and fourth for the number of international students who attend its top universities.
No. 8: Chicago
It may be buried deep in America's Midwest, but Chicago is a major global player. Home to dozens of major U.S. corporations, the tallest building in North America, and one of the world's busiest airports, this sometimes overlooked trading giant has three major financial markets whose value is rated second in the world. Chicago ranks third in the world for its ability to attract international students to its world-class universities. It also has great museums, music, and other performing arts.
No. 9: Seoul
South Korea enjoys a unique distinction as the most plugged-in country on the planet. And its capital, Seoul, leads this trend, coming in first for broadband penetration. But Internet connectivity is only one of the city's many strengths. Given the prominence of its financial exchanges, Seoul's capital markets rank third in the world. As a convenient and preferred meeting place for international conferences, it places fifth in that category. And Seoul ranks high in hosting major sporting events and its number of inhabitants who possess university degrees.
No. 10: Toronto
Canada's cultural capital and largest city marks the first of four North American metropolises that make the top 10. Torontonians may find inspiration in the city's multitude of performing arts venues, the most of any city in the world. They can also discover foreign cuisine in most corners of the city, which is ranked fourth for its selection of international dining. Toronto also is notable for the diversity and size of its foreign-born population, for which it places fifth globally.
No. 11: Washington, D.C.
It's perhaps no surprise that the capital of the U.S. is among the world's most global cities. But some of the characteristics that help put it there might not be so intuitive. Sure, Washington ranks first in the number of think tanks nestled along the Potomac River. It also takes top marks as the seat of international organizations and third for the number of international political conferences held there. But the District of Columbia also is home to a thriving diversity of international cuisine, where it places 10th. Additionally, residents and visitors enjoy a multitude of performing arts venues as well as world-class museums.
No. 12: Beijing
The Chinese capital is among a growing number of cities in emerging countries—others include Moscow, Shanghai, and Dubai—whose continued march toward prosperity could soon challenge traditional leaders in the U.S. and Europe. Beijing's main business is business. It has the fifth-largest number of Global 500 company headquarters and ranks ninth for the number of global industry conferences held there. Beijing also is a rising hub of diplomacy, with the eighth-largest number of embassies and trade missions.
We're in an era not only of rapid globalization but also of urbanization. According to the U.N., 2008 marks the first year when more of the world's people live in cities than in rural areas. One result is that the influence of cities—in politics, business, and culture—has never been greater.
To understand how simultaneous globalization and urbanization are affecting everything from international politics to corporate behavior, management consulting firm A.T. Kearney teamed up with the Chicago Council on Global Affairs and Foreign Policy magazine on a major study of the world's cities. The results, released this month, use a variety of metrics to rank cities according to how "global" they are, and thus, how well they fare in an increasingly competitive battle to attract and retain people, capital, and ideas.
The winners? New York came out on top, not just due to its role as the world's leading business and financial center but also its vibrant cultural life and heavy concentration of international organizations, from the U.N. to embassies and think tanks. The second- and third-place cities, respectively, were London and Paris, thanks to attributes similar to New York's.
What differentiates the A.T. Kearney study from many others is its use of "softer" factors, such as quality of life. Similar studies in the past have tended to focus primarily on business activity as an indicator of where cities rank on the global stage. But such a narrow view is increasingly inadequate, argues Paul Laudicina, managing officer and chairman of A.T. Kearney. For that reason, the Global Cities Index ranks cities based on business activity, human capital, and information exchange but also tosses in two broad categories called cultural experience and political engagement.
Megacities on the Rise
Laudicina notes that cities often provide the most reliable indication of regional success. "The city predates the nation-state by thousands of years," he says. Countries, on the other hand, have tended to be fairly unstable over time. Cities also are continuing to evolve as millions more people leave rural areas in search of work and freedom. According to the U.N., the number of "megacities" around the world, where the population exceeds 10 million, should rise from 19 now to 27 by 2025.
The top cities on the index—which also include Tokyo, Hong Kong, and Los Angeles—aren't surprising, given their financial markets and sophisticated business climates. But their positions as global leaders also are bolstered by the presence of top-quality universities, world-class museums, international cuisine, and culturally diverse populations. New York, for instance, has the world's largest foreign-born citizenry and Tokyo boasts the largest number of inhabitants with university degrees.
Laudicina says the index also helps to explain why businesses choose headquarters in places that can present considerable cost disadvantages. A good example is the San Francisco Bay Area, ranked 15th, where real estate prices and taxes are among the highest in the U.S. The region is made more appealing, Laudicina says, by high quality of life, the prevalence of multidisciplinary academic and scientific research, and other cultural dimensions.
The index reveals another trend, too. Cities in emerging economies, such as Beijing, Moscow, Shanghai, and Dubai, eventually may dislodge the old guard. China's industrial explosion and Russia's recent oil and gas boom have pulled in tourists, foreign investment, and internal migrants looking for the fruits of prosperity.
Rapid Urbanization
It's not yet clear how the current crisis will affect next year's rankings, Laudicina says, but some shift is likely. Cities in wealthy countries most directly linked to global finance could see their numbers slip. In poorer countries, infrastructure will be the main problem. "If global conditions worsen, you will see growth in people migrating to cities for what they see as better economic opportunities," he says. Rapid urbanization, which is absorbed by sturdy municipal infrastructure in wealthy countries, can be devastating in poorer ones. Sewer systems, health facilities, housing, and schools all would likely suffer, Laudicina says.
Cities in the middle—places like Buenos Aires, Beijing, and São Paolo—may fare the best. Though they, too, are challenged by infrastructure problems, they're also less exposed to continuing problems in financial services and could see their rankings rise. Moscow, which might otherwise have fit this category, faces a particular problem, Laudicina says: Much of its current prosperity has derived from energy and natural resources, but now that prices for commodities have fallen, the Russian capital may take a hit.
What's most important about the Global Cities Index, Laudicina says, is that it provides perspective at a time when the value of globalization is being called into question. "We are at a very critical crossroads right now," he says, recalling a collective retreat in the 1930s from an earlier trend to globalization. "Will we continue to keep making decisions that keep our borders and our minds open?"
When pressed to name the world's top cities, most of us would probably rattle off a few places with obvious political and economic clout: New York, London, Paris, Tokyo…you know, the usual suspects.
But in a globalizing world, a city's business climate and government alone are no longer adequate measures of what makes it truly global—and thus attractive to companies and employees. That's why management consulting firm A.T. Kearney, along with the Chicago Council on Global Affairs and Foreign Policy magazine, conducted a study examining the character, influence, and reach of some of the world's greatest urban areas.
The Global Cities Index, released this month, ranks the world's top metropolises by measuring dozens of attributes grouped into five broad categories: business activity, human capital, information exchange, political engagement, and cultural experience.
The leading cities on the list—surprise, surprise—are New York, London, and Paris. But many emerging countries can be proud that their capitals and other major cities are fast becoming challengers to long-recognized leaders.
No. 1: New York
A.T. Kearney ranks New York the world's most global city—and not just for its bistros, bagels, and bodegas. This "city of neighborhoods," which has the largest foreign-born population of any metropolis in the world, finds Albanians, Afghans, and Armenians living side by side with Poles, Pakistanis, and Puerto Ricans. The Big Apple's rich cultural patchwork is reflected in its international cuisine, where it ranks No. 1. Its top-ranked capital markets are still the driving force for the world's economy. And as home to the U.N., the city comes in first worldwide for the number of embassies, consulates, and trade missions. New York also gets high marks as the preferred headquarters for Global 500 firms (behind only Tokyo), its wealth of nongovernmental organizations, and its performing arts scene.
No. 2: London
The erstwhile imperial city on the Thames was once the British Empire's seat of power, with sway over a quarter of the world's population. Today, though London holds no sovereign claim over its former colonies, the city's legal, linguistic, and literary influence still resonates in the far corners of the globe. Besides ranking first for its numbers of international travelers and nongovernmental organizations (NGOs) with global reach, London also ranks second in the world for attracting foreign students to its elite universities, for hosting international sporting events, for its number of think tanks, and for the number and quality of its museums. It is also strongly situated as a center of higher education, diplomacy, and finance.
No. 3: Paris
French may no longer be the dominant international language of diplomacy, but French citizens still can be proud that their capital remains the standard-bearer for a host of other attributes, making it the No. 3 most global city. Paris' world-class dining, hundreds of museums, and high-quality universities continue to inspire residents and visitors alike. And while Versailles is no longer an obvious venue for signing treaties, Paris remains, as it has for centuries, a hub of global diplomacy, ranking fifth in the number of consulates, embassies, and trade missions it hosts. Plus, it's just plain beautiful.
No. 4: Tokyo
The sun continues to shine on Japan's vivacious capital. With the highest number of Global 500 companies in the world calling Tokyo home and a highly educated population—Tokyo boasts the world's highest ratio of university-educated residents—Japan's largest city is certain to remain a global leader. But Tokyo isn't just all work and no play. Visitors and residents have countless choices for dining out: Tokyo's international cuisine is ranked second worldwide. The city also finishes a respectable seventh in the availability of museums.
No. 5: Hong Kong
Once a glittering jewel of the British Empire's claim to the East, Hong Kong continues to sparkle as the world's fifth most global city. As a major gateway to trade in Asia, the city, now a special administrative region of China, ranks second in the world (behind Singapore) for its port throughput and international air freight. The children of expatriates living and working in Hong Kong enjoy top-quality international primary and secondary schools, for which it comes in third. A multitude of international dining options as well as the presence of many "Top 40" corporations help boost its global position.
No. 6: Los Angeles
With its Spanish name and busy airport that welcomes many trans-Pacific airline passengers, America's second-largest city is a nexus of cultures and an obvious player on the global stage. The sprawling coastal metropolis is home to the second-largest immigrant population of any city on earth, with Spanish, Chinese, and Korean—among many other languages—regularly heard on the streets. L.A. also ranks third in international sporting events and fourth for availability of performing arts venues, influenced no doubt by the Hollywood film business that has carved L.A.'s image into the minds of moviegoers the world over.
No. 7: Singapore
As a major hub for international business and finance, this city-state of 5 million people in Southeast Asia ranks seventh among the world's most global cities. Singapore is most notable for its port activity, where throughput is higher than any other city in the world. Corporations are heavily drawn to the multi-ethnic city, whose government is trusted as reliable, efficient, and hands-off in maintaining an inviting business atmosphere. Singapore ranks third in conferences hosted for international associations and fourth for the number of international students who attend its top universities.
No. 8: Chicago
It may be buried deep in America's Midwest, but Chicago is a major global player. Home to dozens of major U.S. corporations, the tallest building in North America, and one of the world's busiest airports, this sometimes overlooked trading giant has three major financial markets whose value is rated second in the world. Chicago ranks third in the world for its ability to attract international students to its world-class universities. It also has great museums, music, and other performing arts.
No. 9: Seoul
South Korea enjoys a unique distinction as the most plugged-in country on the planet. And its capital, Seoul, leads this trend, coming in first for broadband penetration. But Internet connectivity is only one of the city's many strengths. Given the prominence of its financial exchanges, Seoul's capital markets rank third in the world. As a convenient and preferred meeting place for international conferences, it places fifth in that category. And Seoul ranks high in hosting major sporting events and its number of inhabitants who possess university degrees.
No. 10: Toronto
Canada's cultural capital and largest city marks the first of four North American metropolises that make the top 10. Torontonians may find inspiration in the city's multitude of performing arts venues, the most of any city in the world. They can also discover foreign cuisine in most corners of the city, which is ranked fourth for its selection of international dining. Toronto also is notable for the diversity and size of its foreign-born population, for which it places fifth globally.
No. 11: Washington, D.C.
It's perhaps no surprise that the capital of the U.S. is among the world's most global cities. But some of the characteristics that help put it there might not be so intuitive. Sure, Washington ranks first in the number of think tanks nestled along the Potomac River. It also takes top marks as the seat of international organizations and third for the number of international political conferences held there. But the District of Columbia also is home to a thriving diversity of international cuisine, where it places 10th. Additionally, residents and visitors enjoy a multitude of performing arts venues as well as world-class museums.
No. 12: Beijing
The Chinese capital is among a growing number of cities in emerging countries—others include Moscow, Shanghai, and Dubai—whose continued march toward prosperity could soon challenge traditional leaders in the U.S. and Europe. Beijing's main business is business. It has the fifth-largest number of Global 500 company headquarters and ranks ninth for the number of global industry conferences held there. Beijing also is a rising hub of diplomacy, with the eighth-largest number of embassies and trade missions.
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