This week is the MIPIM real estate exhibition, conference and networking event in Cannes, France, and it may be appropriate to write a bit about cities. I am in Nairobi tonight, a sprawling city of officially three million people, but some say six million in total in the urban area. Cities matter in the global economy of today, the world’s top 100 cities generate roughly half of the Earth’s total economic output.
There is fierce competition among the world’s most powerful and influential cities. The global competition is estimated to host 2,7 million towns, 3 thousand large cities and 455 large metropolitan areas with a population over one million. All of them compete in the struggle for attention, and there are a lot of questions: Are the megacities appearing up in the developing world displacing the western world’s hubs? Does London or New York come out on top?
The Martin Prosperity Institute (MPI), headed by Richard Florida, aims to deepen our understanding of economic prosperity. Based at the University of Toronto’s Rotman School of Management, MPI’s mission is to develop a new understanding of, and inform, the broader public conversation about shared and sustainable prosperity that should be an essential part of democratic capitalism. This week, the MPI together with CityLab issued a report ranking of the 25 most economically powerful cities in the world today.
The MPI ranked the cities based on four major factors, with 10 points awarded to a first place ranking, nine to a second place rank and so on. The four factors are:
- Overall Economic Clout: We evaluate overall economic activity by gross domestic product (GDP) as measured by the Brookings Institution in their Global Metro Monitor Map.
- Financial Power: We gauge global financial power based on think tank and consultancy Z/Yen’s Global Financial Centres Index, which gauges the strength of a city’s finance and banking industries.
- Global Competitiveness: Here we use two measures. The Global City Competitiveness Index [PDF], by The Economist, includes 32 indicators of economic strength, physical capital, financial maturity, institutional character, human capital, global appeal, social and cultural character and environment and natural hazards. The Global Cities Index from consulting firm A.T. Kearney tracks business activity, human capital, information exchange, cultural experience, and political engagement in metros.
- Equity and Quality of Life: Lastly, we include a measure of equity and quality of life, The United Nations’ City Prosperity Index [PDF], which measures prosperity along five dimensions: productivity, infrastructure, quality of life, equity and social inclusion and environmental sustainability.
The table below lists the top 10 global cities on each of these five metrics alone:
Below is the top 25 ranking list:
There are some surprising cities high up on in the ranking, and you can check where they all sat three years ago when the list was last made. Some cities have surged up the ranks and some have dropped back considerably.
Below are maps of where the cities are located.