New York Tops Ranking of World’s Most Competitive Cities: EIU Report

A new Economist Intelligence Unit (EIU) research report, commissioned by Citi, reveals that New York ranks first in competitiveness, out of 120 of the world’s major cities. Released today, the report, entitled Hot Spots, ranks the most competitive cities in the world for their demonstrated ability to attract capital, business, talent and tourists.

“New York has been home to Citi since our founding 200 years ago. Our commitment to this city, and its continued competitiveness, are as strong as ever,” said Citi CEO Vikram Pandit. “As cities vie for investment, talent and business, we recognize that competitiveness is about more than growth. We are committed to being a valuable partner to New York, and to clients and urban centers in cities across the U.S. and around the world to enable economic progress.”

“Today the Economist Intelligence Unit has confirmed what New Yorkers have long known: that if you want to start a business, create a new product, or have a big idea, New York City is the place to be,” said Mayor Michael R. Bloomberg. “New York City’s position at the very top of this list is no accident: it’s due to the investments our Administration has made and the world-famous ingenuity and creativity of New Yorkers. The global economy has made the competition between cities more important than ever, and it’s vital that we continue to live up to the reputation we’ve earned as the greatest city in the world.”

“Economic dynamism is definitely rising elsewhere, especially in Asian cities, but U.S. and European cities have legacy advantages that give them a strong competitive edge,” said Leo Abruzzese, the EIU’s global forecasting director. “In particular, these developed cities are better at attracting top talent from across the world.”

With a combined population of about 750 million, the 120 cities ranked in Hot Spots represent approximately 29 percent of the global economy and generated a combined GDP of US$20.24 trillion in 2011.

According to the report, the ten most competitive cities in the U.S. are: New York (1st), Washington, DC (8th), Chicago (9th), Boston (10th), San Francisco (joint 13th), Los Angeles (19th), Houston (joint 23rd), Dallas (joint 25th), Seattle (29th) and Philadelphia (30th).

The Global City Competitiveness Index

For Hot Spots, the EIU developed a “Global City Competitiveness Index” that measures cities across eight distinct categories of competitiveness and 31 individual indicators. Categories include economic strength, human capital, institutional effectiveness, financial maturity, global appeal, physical capital, social and cultural character and environment and natural hazards. A city’s overall ranking in the benchmark Index is a weighted score of the underlying categories.

New York’s talent as a competitive edge

New York’s economy is driven by a range of sources, from the media, arts and fashion, to technology and finance. In 2010, the city was second only to Silicon Valley as a source of venture capital funding in the U.S. Though supplying the demands of a talent-driven market continues to be a challenge (New York had one of the lowest rankings for human capital – at joint 18th), the city has a range of initiatives underway to help maintain its competitiveness. This includes the new applied science and engineering campus it is creating in partnership with Cornell University and The Technion-Israel Institute of Technology, which is expected to generate US$6bn in economic activity.

Additional key findings include:

The most significant advantage that developed country cities hold is their ability to develop and attract the world’s top talent. European and American cities dominate the human capital category of the Index, as they are able to continue to attract capital, businesses, talent and tourists despite concerns over ageing infrastructure and large budget deficits. It will be key for these Western cities to harness their legacy advantages and global connectivity to continue to compete and succeed against fast-growing emerging market cities.

• The ten most competitive cities in the world are: New York (1st), London (2nd), Singapore (3rd), Paris and Hong Kong (joint 4th), Tokyo, (6th), Zurich (7th), Washington, DC (8th), Chicago (9th), and Boston (10th).

Asia’s economic rise is reflected in the economic competitiveness of its cities: In terms of “economic strength,” the most highly weighted category, 15 of the top 20 cities are in Asia. Twelve are in China. Tianjin, Shenzhen and Dalian top the list, while nine other Chinese cities rank in the top 20. Singapore (15th), Bangalore (16th), Ahmedabad (19th) and Hanoi (joint 20th) complete the top 20. The top 32 Asian cities are all forecast to grow by at least 5% annually between now and 2016. Twelve of them will grow by at least 10%.

A “middle tier” of mid-size cities is emerging as a key driver of global growth: Although most companies target a combination of advanced economies and emerging market megacities, the fastest overall growth is found in a middle tier of mid-sized cities with populations of 2m-5m such as Abu Dhabi, Lima, Bandung, Dalian, Hangzhou, Hanoi, Pune, Qingdao and Surabaya. In fact, just nine of the 23 megacities (with populations over 10 million) ranked in the top 30 on economic strength. These mid-size cities are collectively forecast to grow by 8.7% annually over the next five years, ahead of the megacities on which many firms focus.

Infrastructure investments will drive emerging market growth, but more will be needed to secure their attractiveness to tomorrow’s talent: One of the most pressing challenges for emerging market cities in the decades ahead will be whether they can focus their development not just on skyscrapers, rail links and other infrastructure, but also on the softer aspects that will be crucial to their ability to attract and develop tomorrow’s talent—including education, quality of life, and personal freedoms, among other things. In addressing these aspects of competitiveness, cities in Latin America and Africa including Buenos Aires (ranked 60th), Johannesburg (67th) and Cape Town (73rd) can quickly improve their performance in the ranking.

For 200 years, Citi’s central mission has been to enable economic progress. With its global footprint, Citi connects clients to the world, working at the center of global trade and capital flows. On the ground in more than 1,000 cities, Citi has a unique perspective on the complexities of the urban environment. Through Citi for Cities and other initiatives, Citi works with clients and public and private sector partners in cities around the world to enhance public services, facilitate commerce, expand financial inclusion and harness advancements in digital, mobile and card technologies.

About the report:

The full report, including details on methodology and criteria, are available at: http://www.citiforcities.com

About Citi:

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com.

About Citi for Cities

Citi for Cities is an initiative which harnesses the best of Citi across the globe to enable cities to become more efficient, by providing financing that facilitates commerce and modernization, and by empowering citizens to access services that enhance livability and prosperity. Citi aims to help cities achieve their ambitions across the key ecosystems that power a city including administration, roads and transit, ports of entry, energy and utilities, workplace and education, health and safety and regeneration and development. Citi’s span of engagement with cities includes public and private sector, the financial sector and citizens and the communities in which they live. For more information, please visit www.citiforcities.com.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://new.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi

About the EIU

The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of more than 650 analysts and contributors, we continuously assess and forecast political, economic and business conditions in more than 200 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. For more information, please visit www.eiu.com or follow us on www.twitter.com/theeiu