To make the grade as a global city, an attractive commercial and financial environment is a must
Cities worldwide are now defining countries and becoming global hubs of business and economic development, and increasing numbers in the developing world are catching up with their peers in the developed world to become global.
Being global necessitates a number of conditions, such as ease of doing business, economic contribution to Gross Domestic Product (GDP), foreign direct investment (FDI) and infrastructure.
The A.T. Kearney Global Cities Index (GCI) has tracked the evolution of cities using five criteria, including business activity. This is measured by headquarters of major global corporations, locations of top business services firms, value of a city’s capital markets, number of international conferences, and flow of goods through ports and airports.
Cities featured in the GCI often propel their home countries to a higher status. The UK has reached the no. 4 spot, in part due to London’s attraction as a location for company headquarters. Former US-based insurer Aon has re-located there as well as Chinese property developer Advanced Business Parks. The UAE rose to rank No. 11 in the FDI index, moving up from No. 14 in 2013, with Dubai playing a leading role in helping the Emirates reach the position.
“We are starting to see the impact of the focused strategy (of Dubai) in terms of not only attracting the Expo 2020 but also an increased number of institutional investors,’’ says Anshu Vats, Partner at A.T. Kearney Middle East.
Dubai’s hosting of the World Expo 2020 is expected to reap significant economic benefits not just for the UAE but for the entire region, just as Expo 2010 propelled Shanghai into the financial limelight.
The most prosperous cities are the ones that, for rich or poor, offer good quality public goods that can be accessed in an affordable manner
In many categories of the CGI, cities in the developing world are overtaking their European counterparts. Beijing, has made it into the top ten of GCI for the first time, beating cities such as Washington based on the increase in the number of Fortune 500 companies, international schools, broadband subscribers and museums.
GCI’s Business activity scores between 2008 and 2014 are diverging thanks to the increase in the number of top global companies based in emerging markets, particularly China.
Seaports are still proving to be an important factor in the success of a city. The Economist Intelligence Unit (EIU) 2025 City Competitiveness Index shows that cities have to have a high level of income, favourable demographics and access to quality seaports. Cities that rose in the overall rankings in the index had easy maritime access. Dubai’s Jebel Ali Port, the world’s No. 9 container port, is a strong contributor to Dubai’s GDP.
According to the UN-Habitat’s City Prosperity Index, cities need to have a balanced development that benefits all segments of society. The index is based on five equally weighted criteria: infrastructure, equity and social inclusion, environmental sustainability, productivity and quality of life.
“The most prosperous cities are the ones that, for rich or poor, offer good quality public goods that can be accessed in an affordable manner, or even, sometimes, for free,’’ says Eduardo Moreno, Head of Research and Capacity Development at UN Habitat.