The more cities change, the moreforward-looking perspective matters…The notion of the city has come a long way. deeper exploration of core issues. This year have to be in balance for modern cities toBut the heart of what a city is remains the we compare 26 cities—with San Francisco, enjoy healthy growth. Minds spur innova-same: people drawn together, today in ever- Berlin, Madrid, Moscow, Istanbul and Abu tion; roads, rails, communications networks,increasing densities and numbers, to work Dhabi joining and Houston rejoining. We also schools and hospitals lay the groundworkas a community. look closely at a few of the challenges that on which new ideas can grow. In an ideal are most pressing at the moment—regional world, prosperity follows. But, as we all know,Cities of Opportunity is dedicated to management, education, sustainability, progress toward any ideal requires day-to-understanding what makes urban dynam- density, transportation and preservation. day work. This study represents our partics work, and communicating what we learn in the effort.to government officials, policymakers, busi- It is not a coincidence that images ofnesspersons, scholars and citizens mutually innovative and historic libraries (in Seattle Yes, Cities of Opportunity is changing. But theinvested in the success of their city or cities. and Stockholm) begin and end the interviews heart of what we are doing—trying to shed in our study. Nor is the focus on transporta- light on what makes major cities healthy—This marks our fourth study. Like cities them- tion, energy, environment, housing and health remains the same. All three of us sincerelyselves, we keep evolving. Cities of Opportunity that weaves throughout. Both tangible and hope you find value and interest in the study.2011 includes more cities, greater analysis and intangible—physical and intellectual capital—Yours truly,Robert Moritz Kenneth I. Chenault Terry J. LundgrenChairman and Senior Partner Chairman and CEO Chairman, President andPricewaterhouseCoopers LLP American Express Co. Chief Executive Officer Macy’s Inc. Co-chairman Partnership for New York City Co-chairman Partnership for New York City
Contents 5 About the study Frames the themes, presents context and explains the scoring 10 The city in focus Zeros in on key results throughout the study and analyzes findings and issues 20 Indicator discussions & interviews Presents in-depth results covering all 10 indicators and 66 variables, examines issues and adds insight from urban thinkers and doersCommuters crossing London Bridge.2 | Cities of Opportunity | PwC
Interviews 22 | Rem Koolhaas 56 | Mortimer Zuckerman Muses on changing cities and his quest to Gauges the present and future of cities from reinvent them in a way that serves the his perspective as a developer, publisher and public good former professorPage 22 30 | Judith Rodin 64 | René Gurka Discusses the Rockefeller Foundation’s quest Sees Berlin as “the place to be” for media, life to address the challenges of urbanization sciences, clean industries and services as the city re-establishes itself as a business center 42 | Klaus Baur & Guenther Krug Explain how railways bring sustainable 76 | Leif Edvinsson mobility back to the future Charts a course “from cities of hardware to cities of mindware” 50 | Kerry Zhou Outlines the mission of Goldwind Technologies to light the world’s cities with green powerPage 30Page 56 See the web at www.pwc.com/cities for greater depth and functionality. Model your own city and perform customized correlation analyses by selecting the variables and cities you want to focus on for an interactive look at the results. See videocasts and hear podcasts with Rem Koolhaas and Mortimer Zuckerman. Read the full text of all the interviews condensed here in the report. Learn the detailed background on all sources and definitions for the 66 variables in the study.Page 76 Partnership for New York City | Cities of Opportunity | 3
About the study Traffic traverses a new diagonal crossing at Oxford Circus, London, inspired by the Shibuya crossing in Tokyo.
Overview: Looking closer at the alphas, betas and chais of holistic cities When the first edition of Cities of In terms of overall results this year, New York Opportunity was developed, we made a finishes first with a slim, perhaps ephemeral, decision to rank cities only in their 10 indica- lead (see page 12). But the real news lies tor categories and to forego showing overall elsewhere. rankings to avoid the misperception of a con- test. That risk seemed especially significant Toronto, San Francisco, Stockholm in 2007, when the media cast New York and and Sydney round out the top five London in a death match for global capital after New York. These beta cities arguably market kingship. may not “have it all” if you’re seeking to crown a heavyweight champion among world In hindsight, the New York versus London tug cities where size, a major capital market and of war seems a figment of the about-to-burst 24/7 buzz do matter. But they just may have bubble, a comparison that deserved headline what they need for a world that is growing attention only through the looking glass of less reliant on geography and more dependent irrational exuberance. And a curious reader, on attracting and nurturing good people to then and now, might be expected to ask, quite innovate and build the future with fresh eyes. commonsensically, ‘who does win?’ Interestingly, the cities of Toronto, San Francisco, This fourth edition of Cities of Opportunity Stockholm and Sydney all are part of vital for the first time shows an overall ranking. regions—a relationship we examine this year. But which city wins is far from our message or motivation. If anything, we honor the Notably also, the “alpha” cities like admonition of Walt Whitman, a 19th century London, Paris, Tokyo and New York editor of The Brooklyn Eagle: “Be curious, not are not bunched at the top. These “usual judgmental.” suspects” of broad, Western socioeconomic leadership (with rich recent histories, deep Rome, Amsterdam, Beijing were all once resources and major capital markets) are the centers of their worlds. Each remains a spread through the top 10 and, in the case of great city but at a different stage of evolu- Tokyo, fall to 14th overall. tion. Detroit stood mid-20th century at the epicenter of the US economy, to the point Taking a step back, there actually are no that it was said, “What is good for the nation alpha and beta differentiators among our is good for General Motors and vice versa.” 26 cities—nor is there any reason to catego- Today, that story has taken a different turn. rize cities as one or the other more than to But even for Detroit, detours don’t doom the acknowledge differences among histories, city to dead ends. opportunities and challenges. As all city6 | Cities of Opportunity | PwC
dwellers know (at least in quiet moments), 66 variables, also offering users the interac- Interviews add an extraordinarythe density that packs us on metros, high- tive ability to customize any combination of level of insight from people at the centerways, markets and streets guarantees that 10 variables.) of thought and action. These include con-we’re “all in it together.” Sooner or later, versations with: Rem Koolhaas, architect,cities and their citizens prosper or fail as a This year in addition to refining our data writer and Harvard professor; Judith Rodin,piece. What one person or city learns can selection and analysis and presenting inter- president of the Rockefeller Foundation andhelp another; and our objective is to look at views with authorities at the center of urban formerly the University of Pennsylvania;policies and performance to communicate ideas and action, we discuss several critical Mortimer Zuckerman, developer anduseful insights. urban issues in depth. These include the: publisher; Klaus Baur and Guenther Krug, chairman of Bombardier Transportation, andWinners also would be much different if Paradox of measuring and improving a member of Berlin Parliament and advisorCities of Opportunity were recast as Cities education in a world where intellectual capi- to Bombardier, respectively; Kerry Zhou,of Growth or Cities of Fun. As it is, our study tal and innovation increasingly form the brick director of strategy and planning at Goldwinddefines the ideal differently. Perhaps we’re and mortar of future cities (see page 28). Technologies, one of China’s leading windseeking the chai of cities, to switch from power companies; René Gurka, managingGreek letters to a Hebrew character that Regional struggle from Beijing to director of Berlin Partner, and Leif Edvinsson,signifies life force. Berlin to São Paulo and Sydney to effec- an urban futurologist and pioneer in under- tively manage cities in the contexts of their standing the dynamics of intellectual capital.Our measures are designed to favor surrounding areas—often places with dif-holistic capital market centers with ferent governments, measures of success, Our website, www.pwc.com/cities,vibrant economies and strong quality of life. funding sources and economic motivations offers much more. Interactive tools allowOur thesis is that a successful city going for- (see page 36). users to perform their own correlation analy-ward will balance both social and economic ses and comparisons for any city. Videocastsstrengths so the people and infrastructure Changing popular and real definition are available with Rem Koolhaas and podcastssupport each other. The challenge of building of what a cityscape looks like as some with Mortimer Zuckerman. Full-length tran-a city, keeping it on top and evolving with cities rise, some spread, some choose to stay scripts of the interviews are posted. You canchanging needs is the dynamic we’re seeking low and some combine a bit of each (see also find detailed background on all sourcesto illuminate. The measures we use—recon- page 40). and definitions of the variables.sidered and significantly recast this year—areselected to develop an accurate reflection of Progress being made on sustainability In closing, we hope all this proves entertaining,that balanced city and its metamorphosis. as cities from Mexico City to Johannesburg enlightening and valuable to everyone inter- to Shanghai, Abu Dhabi and New York adopt ested in the factors that make cities thrive.Correlation analyses provide one signal we’re plans to suit their own situations to cleangoing in the right direction. A parallel exists their environments and conserve resourcesbetween good economic indicators and social (see page 47).ones. Among the 10 indicators, five corre-late in a close positive pattern—intellectual Costly and maddening toll of trafficcapital and innovation; health, safety and congestion and what Singapore, Stockholmsecurity; ease of doing business; technology and London are doing to solve the problemreadiness; and demographics and livability. (see page 68).In other words, when one goes up, the othertends to do so as well. For instance, the Friction playing out between prog-indicators that include health and intellectual ress and preservation as governments,capital correlate a striking +87%. (See page businesses, developers, architects, historic16 for a heat map of the 10 indicators and conservationists and citizens each regardwww.pwc.com/cities for a look at all the value of the past and road to the future through slightly different prisms (see page 72). Partnership for New York City | Cities of Opportunity | 7
Approach: The mix of variables and cities is refined;the parameters of research stay consistent Like cities, Cities of Opportunity continues properly. Discussions are included on regional to evolve. PwC and the Partnership for New management, measurement of education, York City first considered the report seven cityscapes, sustainability, traffic congestion years ago asking what New York had to do to and preservation. remain competitive on the world stage. We immediately extended the research to other This fourth edition of our report expands and cities around the world to find patterns and changes the mix of cities, enriches the data lessons. In four editions of our report, we with more and different variables, and further have grown from 11 to 26 cities. complements the quantitative nature of the research with insight from world authorities Last year, we reported that economics and on urban issues. quality of life are tightly linked in successful modern cities. The study continues to grow Three key factors governed the cities into a more holistic look at socioeconomic we chose: balance. Capital market centers. Many of the cities We moved deeper into underlying included are hubs of commerce, communica- issues this year, realizing that numbers tions and culture. But all are financial capitals themselves may create interest, but, very of their region—meaning each plays an often, the policies behind statistics require important role not only locally but also as a analysis and comparison to tell the story vital part of a globalizing economic fabric. Broad geographic sampling. While each city is a center of finance and commerce in its own region, and in many cases the world, collectively, the 26 cities form a representative international distribution. Mature and emerging economies. Sixteen mature cities and 10 emerging ones are included. This year, six new cities joined the study, one rejoined from the 2008 report and a few were removed. At 26 cities, the sample size remains small enough to allow deep and wide-ranging research yet large enough to be representative. Madrid, Moscow, Istanbul and Houston were added in order to create better regional coverage. Abu Dhabi replaced Dubai as the former is rising as a business center while the latter’s growth slowed markedly during the Great Recession. San Francisco joined for a number of reasons. Close links to Silicon Valley provideSan Francisco Bay Area.8 | Cities of Opportunity | PwC
Madrid, Moscow, Berlin, Istanbul, Abu Dhabi and San Francisco join the study and Houston rejoins. Variables are added on airport transit, health systems and end-of-life care, among others.a useful regional focus. As the financial hub ism. The latter measures hardware itself. The However, because consistent comparisonsof that area, the city itself plays a major role demographics and livability indicator focuses across all cities are critical to assure objec-in one of the most innovative economies in more closely on how pleasant people find tivity, country-level data were used whenthe US. It also is at the leading edge of US living in a city. Only working age population consistent, highly reliable sources of publi-cities enacting social policies that affect busi- remains to show the size of a city’s potential cally available data were unavailable for allness, which adds interest to its performance. workforce. 26 cities.Berlin replaces Frankfurt, the nation’s New variables include: airport to central The scoring methodology was devel-financial and banking hub, to represent business district access to measure the ease oped to ensure transparency and simplicityGermany. The capital’s fast and targeted of using public transit between those two key for readers, as well as comparability acrossgrowth in recent years adds a layer of interest places; health system performance; and cities. The output makes for a robust set ofin seeing if it can accomplish in business end-of-life care. We strengthened our results and a strong foundation for analysiswhat it already has achieved in government sustainability indicator variables, adding and discussion.and culture, becoming the heart of a newly available data. The study’s result is anreunified nation. unbiased, quality-controlled and rich look In attempting to score cities based on relative at the pulse of key cities at the heart of the performance, we decided at the outset of ourIn terms of the data indicators, we financial, commercial and cultural world. process that for maximum transparency andconstructed a robust sampling of variables, simplicity, we would avoid applying overlyeach of which had to be: relevant; consistent Understanding the scoring: Seeking complicated weights to the 66 variables and,across the sample; publicly available and transparency and simplicity in so doing, treat each variable with equalcollectible; current; free of skewing from local importance. This approach makes the studynuances; and truly reflective of a city’s quality Because Cities of Opportunity is based on easily understandable and usable by businessor power. (See pages 79-82 for a brief key publicly available data supported by extensive leaders, academics, policymakers and layand www.pwc.com/cities for a detailed listing research, three main sources were used to persons alike.of definitions and sources.) collect the relevant data: Taking the data for each individual variable,Data this year were normalized where Global multilateral development orga- the 26 cities were sorted from the bestappropriate, minimizing the likelihood of a nizations such as the World Bank and the performing to the worst. The cities then werecity doing well solely because of its size and International Monetary Fund, national assigned a score from 26 (the best perform-historic strength. This eliminated the need statistics organizations, such as UK National ing) to 1 (the worst performing). In theto differentiate between variables that reflect Statistics and the US Census Bureau, and case of a tie, the cities were assigned thea city’s raw power (such as the number of commercial data providers. same score.foreign embassies or greenfield projects) and The data were collected during the second Once all of the 66 variables had been rankedits quality or intensity (such as percent and third quarters of 2010. In the majority of and scored, they were placed into their 10of population with higher education). Now cases, the data used in the study refer to 2009 indicators (for example, economic clout ormore variables are stated in a way that is and 2010. demographics and livability). Within eachnormalized for either land area or populationthan in previous editions. individual group, the variable scores were In some cases, national data were used as summed to produce an overall indicator score a proxy for city data. Renewable energy for that topic. This produced 10 indicatorThe 66 variables selected and divided into consumption is an example. Use of national league tables that display the relative perfor-10 indicator groups changed significantly this data tends to disadvantage the 26 cities in mance of our 26 cities.year in order to develop an even more accu- our study, all of which are either national orrate image of city success. regional capitals of finance and business thatIntellectual capital and innovation and would be expected to outperform nationaltechnology readiness indicators were more averages in measures of socioeconomiccleanly delineated this year. The former advancement. This affect might be more Definitions for all variables areshows what hardware facilitates in a city, such pronounced in developing parts of the world provided on pages 79-82.as education, R&D effort and entrepreneur- and areas with greater rural populations. Partnership for New York City | Cities of Opportunity | 9
The city in focus Visitors walk through the glass cupola of the German lower house of Parliament, the Bundestag, designed by Sir Norman Foster.
Holistic balance characterizes the top10 cities in our rankings: all are wellestablished centers of economic energyand intellectual vitality. Althoughdispersed among four continents,their common bond is depth. sure with our life satisfaction variable—might be an especially sensitive indicator of the top and bottom of our rankings given that seven out of 11 cities scoring least in life satisfaction also were at the bottom of the overall rankings. Still, the notions of top and bottom in this report, by definition, are relative. A major A look across the overall rankings reveals reason to look at every ranking indicatively several interesting patterns. Our top five cities rather than literally—as guideposts to the include only one, New York, that might be future rather than markers of the past—is called a traditional economic powerhouse. precisely because every city in this study does Most of the other alpha cities—London, Paris something, or many things, well. Looking at and Hong Kong—finish in the bottom half of the overall rankings without examining the the top 10. Tokyo falls to number 14. Toronto, actual details behind them, therefore, obscures San Francisco, Stockholm and Sydney round the compelling reasons why each city here has out the top five this year rather than the been included as one of the foremost cities in historic centers of global finance, commerce the world today. and culture. New York narrowly finishes first Holistic balance characterizes the top 10 in terms of rankings, dominating only the cities in our rankings: all are well established lifestyle assets indicator measuring cultural centers of economic energy and intellectual vibrancy, sports, hotel rooms, skylines, tourism vitality. Although dispersed among four con- and green space. But balance may be the city’s tinents, their common bond is depth: of eco- greatest strength. New York finishes in the top nomic infrastructure and networks; of law and three places in six out of 10 indicators. jurisprudence; of commercial protection; of educational systems and cultural foundations; By contrast, London maintains the greatest of civic organizations; and of social security. economic clout (coming in ahead of Paris and New York in that indicator, respectively) but These cities are hardly identical, and they do finishes in the top three overall only one other not excel in every indicator. But they all rep- time. In context, balance may have helped resent a modern consensus that cities are the New York weather the worst of the Great most effective agents of what Leif Edvinsson Recession and hurt London, whose economy calls “social intelligence” (see page 76); that relies more heavily on one sector: financial is, the concentrated knowledge and insight of services. an entire human network. A potential sign of shifting patterns The most resilient societies are those in which emerges looking at the four cities that citizens feel they have a stake; economically, follow New York in the top five—Toronto, politically, socially, and even emotionally. As San Francisco, Stockholm and Sydney. In an it turns out, emotion—which we tried to mea- increasingly virtual world, these beta cities Partnership for New York City | Cities of Opportunity | 11
How the cities rank Intellectual capital Technology Transportation and innovation readiness and infrastructuremay pose significant competition to great 26 New York 174 90 158cosmopolitan centers such as London, Paris, 25 Toronto 186 59 127Tokyo and New York. 24 San Francisco 174 83 156Toronto, San Francisco, Stockholm and 23 Stockholm 205 84 134Sydney all are smaller cities that, a quarter 22 Sydney 168 47 129of a century ago, were regarded as regionalor national centers. Not any more. Stockholm 21 London 162 68 149ranks first in intellectual capital and innova- 20 Chicago 166 80 159tion; health, safety and security; and, remark- 19 Paris 172 58 168ably, demographics and livability, which 18 Singapore 119 78 126includes the thermal comfort variable thatquantifies the idea that more temperate and 17 Hong Kong 118 77 149consistent climes are more attractive. 16 Houston 168 74 92 15 Los Angeles 169 76 93Toronto, meanwhile, finishes second overalland also ranks second in intellectual capital 14 Berlin 149 48 113and innovation as well as health, safety and 13 Tokyo 168 74 152security, the two indicators that are most highly 12 Madrid 120 40 154correlated in a positive way (see page 16). 11 Seoul 130 89 145Findings of interest arise throughout 10 Beijing 77 45 133the results. São Paulo, for example, finishes 9 Abu Dhabi 74 24 104in the top 10 in cultural vibrancy and fourthin the “zeitgeist” portion of that variable, 8 Shanghai 83 47 127signaling the city’s global appeal as a dynamic 7 Mexico City 77 21 134metropolis coming into its own as the largestcity in the Southern Hemisphere. It also does 6 Moscow 107 51 128very well in sustainability, performing in the 5 Santiago 68 28 82top 10 overall and ranking second in both 4 Istanbul 38 29 99carbon footprint and renewable energy 3 São Paulo 58 28 80consumption. 2 Johannesburg 51 13 55Johannesburg, too, does extremely well in 1 Mumbai 41 18 80sustainability, coming in fourth overall. Whileits top ranking in cost of business occupancymight be expected, coming in second in air-port to central business district (CBD) accessis both surprising and impressive.Istanbul ties for third place withAbu Dhabi and New York in skyscraperconstruction activity; equals every US city inease of starting a business; beats Tokyo, SanFrancisco and Berlin in international tourists;and, finally ties for third with San Francisco, At a time of great nation and city building in multimedia design and development,Sydney and Singapore (among other cities) China, Shanghai leads all cities in attracting recycled waste and renewable energy. All thisfor the quality of its air. foreign direct investment in terms of both shows China investing to continue the growth capital inflow and new greenfield projects. of its cities and taking actions now in theAbu Dhabi itself ranks in the top three places Beijing comes in third and fourth in these economy and environment to yield dividendsin 10 different variables, from the quality variables, respectively, and posts the best in the future.of its air to its hospitals to commute time to airport to central business district commuteits economic competitiveness in everything in the study. Shanghai’s modern skyline is the Beyond the highs and lows, two notewor-from tax rates to ease of hiring to working fourth most powerful in our study. thy points should be made about the middleage population. range of this table. The first is that Tokyo Shanghai and Beijing jointly finish in the top dropped from eighth in last year’s ranking to 10 in nearly a third of the variables (21 of 14th this year—a steep drop by any measure 66); notably including software and Continues on page 1412 | Cities of Opportunity | PwC
Health, safety Sustainability Economic clout Ease of doing Cost Demographics Lifestyle assets Scoreand security business and livability 93 49 163 178 77 97 147 1226 112 71 139 163 94 133 111 1195 104 69 101 154 96 131 104 1172 113 81 103 143 79 137 68 1147 104 83 107 162 87 134 105 1126 90 52 170 166 59 83 123 1122 107 42 101 156 99 116 94 1120 85 57 166 119 51 116 125 1117 97 52 140 188 64 113 90 1067 66 47 149 191 60 107 97 1061 103 35 100 152 116 116 94 1050 89 46 84 159 101 124 102 1043 98 86 100 121 91 122 88 1016 91 45 114 140 45 81 103 1013 79 58 144 102 62 124 84 967 58 56 89 119 57 83 56 882 37 47 114 76 39 78 83 729 86 28 71 117 70 110 21 705 37 54 119 54 41 49 86 697 41 43 66 97 58 90 65 692 18 33 88 60 37 47 95 664 30 61 65 138 86 76 24 658 25 57 68 90 46 74 72 598 21 67 80 74 30 92 65 595 42 78 67 87 86 71 43 593 25 71 88 61 29 49 30 492Each city’s score (here 1227 to 492) is the sum of its rankings across indicators. The city order from High Highest rank in each indicator26 to 1 is based on these scores. See maps on pages 18–19 for an overall indicator comparison. Medium Low Partnership for New York City | Cities of Opportunity | 13
Continued from page 12 but for cities such as Paris and London. Both these cities complete the top three, respective-but one with clear causes. While it reached ly, in lifestyle assets; but they do not performthe top 10 in six indicators, Tokyo ranked 12th nearly as well in demographics and livability.in ease of doing business; eight places from (Paris does best, tied for eighth; but Londonthe bottom in the key variable of demograph- comes in at a tie for 17th.) Meantime, Stock-ics and livability (with a correspondingly low holm, Sydney, Toronto and San Francisco leadscore in life satisfaction); and six places from the category.the bottom in cost and sustainability—unusualresults for one of the leading cities in the Results in health, safety and securityworld with extraordinary human capital. may expose another significant risk going forward in terms of any city’s success. In ourBerlin ranked immediately above heat map analysis this year, a highly positiveTokyo in this year’s study and is reinvent- correlation arises between health, safety anding itself—or, more accurately, reintegrating security and intellectual capital and innova-itself into the international economy—for the tion (see page 26). Clearly, the people whosecond time since it became the capital of constitute a city’s intellectual capital, and areImperial Germany in 1871 and burgeoned in its leading innovators, need to feel healthy,size and population in the first decades of the safe and secure in their working and personal20th century. surroundings in order to put down rootsThe fall of the Berlin Wall in 1989, the city’s and prosper.reunification and its reinstatement as the Taking a step back, high or low overall scorespolitical center of a united Germany have are only guideposts. One pragmatic policyrestored Berlin to the mainstream of European implication of the study is that a broadlyand global history. It looks like it intends to positive quality of life may serve as a founda-stay there, certainly as a creative center—and tion of both a resilient economy and lastingnot just in the arts but in IT, life sciences, global success.and services (see page 64 interview withRené Gurka of Berlin Partner). While none of our beta cities are world eco- nomic powerhouses, they perform very wellReturning to overall messages in the overall. This is important at a time of urbanfindings, it may be telling going forward that growth when residents are looking for moreNew York ranks 14th in demographics and than just a place to work but also a place tolivability, with low scores in quality of living live, build families and invest in the future.and commute time. Weakness in these areas The cities that perform well in Cities ofmay be a future threat not only for New York Opportunity are those that reflect that balance.While none of our beta cities are world economicpowerhouses, they perform very well. This isimportant at a time of urban growth whenresidents are looking for more than just a placeto work but also a place to live, build familiesand invest in the future.14 | Cities of Opportunity | PwC
Grande Arche de la Défense, Paris.Partnership for New York City | Cities of Opportunity | 15
Practical correlates:The patterns of a successful city reflect the people whowork toward success Correlation analysis adds a fascinating aspect Transportation and infrastructure Intellectual capital and innovation of our study in which the data create their own patterns, on a kind of random walk that Demographics and livability Health, safety and security leads to new, and often unexpected and coun- Ease of doing business Technology readiness Average correlation terintuitive, conclusions that challenge some theories and confirm others. Economic clout Lifestyle assets Sustainability What stuck out in the heat map of our 10 Grand total indicators this year was the strong positive correlation between intellectual capital and Cost innovation and health, safety and security. Average correlation 55% 74% 70% 67% 61% 60% 57% 53% 50% 48% 43% 27% Simply stated, the most globally Grand total 74% 100 % 94% 91% 83% 81% 76% 71% 67% 65% 56% 32% competitive cities are almost always those in which the men and women who gener- Intellectual capital and innovation 70% 94% 100 % 87% 69% 81% 69% 63% 54% 60% 55% 36% ate a city’s intellectual resources are offered professional and personal surroundings Health, safety and security 67% 91% 87% 100 % 78% 65% 84% 46% 47% 46% 68% 30% that can reasonably ensure their health and Ease of doing business 61% 83% 69% 78% 100 % 69% 67% 51% 47% 37% 62% 6% safety. Put another way, a city’s creators and innovators—those who design and devise Technology readiness 60% 81% 81% 65% 69% 100 % 43% 63% 52% 63% 35% 5% its products (whether buildings, financial Demographics and livability 57% 76% 69% 84% 67% 43% 100 % 28% 27% 30% 67% 38% instruments, media or works of art) and set Lifestyle assets 53% 71% 63% 46% 51% 63% 28% 100 % 76% 62% 11% 9% its trends—actually choose where they want to live. Economic clout 50% 67% 54% 47% 47% 52% 27% 76% 100 % 68% -5% 15% Transportation and infrastructure 48% 65% 60% 46% 37% 63% 30% 62% 68% 100 % -6% 3% This illustrates a broader competitive land- scape. The five indicators that correlate very Cost 43% 56% 55% 68% 62% 35% 67% 11% -5% -6% 100 % 24% positively among themselves lie in the “north- Sustainability 27% 32% 36% 30% 6% 5% 38% 9% 15% 3% 24% 100 % 100 % Strong positive correlation Weak positive correlation 0% Weak negative correlation -100 % Strong negative correlation16 | Cities of Opportunity | PwC
west” corner. In addition to the two discussed cities). Of the top 10—those, in other words,above, they include ease of doing business, most positively correlated with each other—technology readiness, and demographics three are social (end-of-life care, housing andand livability. What is noteworthy about this quality of living); two involve intellectualcluster is that only ease of doing business is capital and innovation (literacy and enroll-a “hard” economic or financial measure. The ment and intellectual property protection);other four are more properly social, educa- one is technological (digital economy score);tional or technological indicators—not the one is political (political environment) andconventional stuff of economic analysis. as relevant to personal freedom as to prudent investment; and only three are economicMost of those hard economic indicators— (workforce management risk, entrepreneurialeconomic clout, transportation and infra- environment and business trip index).structure, and cost—lie in the bottom halfof the map. Interestingly, cost, the “hardest” That, in the end, is the new urbanand bluntest economic measure of all, shows terrain. Intellectual capital and innovationweak negative correlations with economic has the highest average positive correlationclout, as well as with transportation and with every other indicator. Health, safety andinfrastructure. security has the second highest. And the two are more positively correlated to each otherThis is a striking illustration of the transfor- than is the case with any other indicators.mation of modern metropolitan economies,now based and dependent on education, According to the data, therefore, the success-science and technology rather than on ful modern urban economy is reliant on, iftraditional industry. Moreover, to sustain not yet solely the product of, intelligence andsuccess, cities today must continually attract social well-being—a methodological conclu-and retain highly educated, technologically sion that seems not so much to challenge anyadept and digitally connected knowledge theory as to confirm common sense.workers who increasingly make up the coreof their human capital and whose definitionof quality of life is exacting and not easilycompromised.This extremely positive correlation of socialand educational variables in our study isborne out by our large heat map, whichincludes all 66 variables (see www.pwc.com/ Simply stated, the most globally competitive cities are almost always those in which the men and women who generate a city’s intellectual resources are offered professional and personal surroundings that can reasonably ensure their health and safety. Partnership for New York City | Cities of Opportunity | 17
Indicator rankings at a glanceThe maps below show city rankings in each of the study’s 10 Intellectual capital and innovationoverall indicators. A brief key to the 66 variables is available on page 26pages 79-82. Interactive tools and detailed listings of definitionsand source documents used to develop Cities of Opportunity are Toronto London 26 Stockholm 16 10 Moscowoffered at www.pwc.com/cities. Chicago 25 15 Berlin Beijing Seoul San Francisco 24 17 24 New York 13 22 1 Istanbul 8 14 Los Angeles 21 20 Houston Madrid Paris Abu Dhabi 20 Tokyo Shanghai 9 8 6 11 Hong Kong Mexico City 2 Mumbai 12 Singapore São Paulo Johannesburg 4 3 Sydney Santiago 5 20 Health, safety and security Sustainability page 45 page 46 London 26 Stockholm London 24 Stockholm Toronto Toronto 16 1 Moscow 12 2 Moscow Chicago 25 20 Berlin Beijing Chicago 22 26 Berlin BeijingSan Francisco 23 Seoul San Francisco 20 Seoul 24 18 New York 12 13 4 Istanbul 7 4 10 New York 17 16 16 Istanbul 9 10 14 Los Angeles 15 21 Houston Madrid Paris Abu Dhabi 17 Tokyo Los Angeles 7 3 Houston Madrid Paris Abu Dhabi 6 Tokyo Shanghai 7 Shanghai 13 8 14 5 1 11 Hong Kong 9 Hong Kong Mexico City 4 Mexico City 22 Mumbai Mumbai 19 12 Singapore Singapore São Paulo São Paulo Johannesburg Johannesburg 2 19 9 Sydney 23 Sydney Santiago 5 Santiago 18 23 25 Cost Demographics and livability page 62 page 66 London 17 Stockholm London 26 Stockholm Toronto Toronto 11 3 Moscow 10 1 Moscow Chicago 22 21 Berlin Beijing Chicago 24 20 Berlin BeijingSan Francisco 23 Seoul San Francisco 23 Seoul 24 16 New York 13 8 7 Istanbul 4 19 13 New York 22 19 5 Istanbul 7 10 9 Los Angeles 25 26 Houston Madrid Paris Abu Dhabi 6 Tokyo Los Angeles 22 19 Houston Madrid Paris Abu Dhabi Shanghai 3 8 Tokyo Shanghai 5 10 15 11 15 12 Hong Kong 14 Hong Kong Mexico City 1 Mexico City 3 Mumbai Mumbai 14 16 Singapore Singapore São Paulo São Paulo Johannesburg Johannesburg 2 12 19 Sydney 4 Sydney Santiago 19 Santiago 6 20 2518 | Cities of Opportunity | PwC
Technology readiness Transportation and infrastructure page 29 page 34 London 24 Stockholm London 17 Stockholm Toronto Toronto 16 13 Moscow 20 13 Moscow Chicago 15 12 Berlin Beijing Chicago 12 9 Berlin BeijingSan Francisco 23 Seoul San Francisco 23 Seoul 22 26 New York 8 14 7 Istanbul 9 25 24 New York 22 26 7 Istanbul 15 25 18 Los Angeles 19 18 Houston Madrid Paris Abu Dhabi 18 Tokyo Los Angeles 6 5 Houston Madrid Paris Abu Dhabi 21 Tokyo Shanghai 11 Shanghai 12 3 4 8 20 Hong Kong 17 20 Hong Kong Mexico City 2 Mexico City 3 Mumbai Mumbai 21 10 Singapore Singapore São Paulo São Paulo Johannesburg Johannesburg 6 3 1 Sydney 1 Sydney Santiago 6 Santiago 4 11 14 Economic clout Ease of doing business page 54 page 60 London 15 Stockholm London 16 Stockholm Toronto Toronto 26 9 Moscow 23 2 Moscow Chicago 20 12 Berlin Beijing Chicago 22 13 Berlin BeijingSan Francisco 14 Seoul San Francisco 18 Seoul 14 24 New York 22 25 4 Istanbul 18 10 19 24 New York 9 12 7 Istanbul 5 12 Los Angeles 7 12 Houston Madrid Paris Abu Dhabi Shanghai 19 18 Tokyo Los Angeles 20 17 Houston Madrid Paris Abu Dhabi Shanghai 1 15 Tokyo 2 5 8 10 23 Hong Kong 26 Hong Kong Mexico City 9 Mexico City 3 Mumbai Mumbai 21 25 Singapore Singapore São Paulo São Paulo Johannesburg Johannesburg 6 4 Santiago 1 3 Sydney Santiago 14 6 Sydney 16 21 Lifestyle assets page 70 London 8 Stockholm Toronto 24 17 Moscow Chicago 23 13 Berlin BeijingSan Francisco 21 Seoul 16 26 New York 11 25 9 Istanbul 10 5 Los Angeles 19 16 Houston Madrid Paris Abu Dhabi Shanghai 12 20 Tokyo 1 7 18 Hong Kong Mexico City 3 Mumbai 14 Singapore São Paulo Johannesburg 7 Santiago 2 4 Sydney 22 Map Key High The 26 cities are sorted from the best to Medium the worst performing, with each receiving Low a score ranging from 26 for best to 1 for worst. In ties, cities are assigned the same score. Partnership for New York City | Cities of Opportunity | 19
Indicator discussions& interviews The Korean Pavilion at Shanghai’s 2010 Expo.
As we dig our way out of the Great Recession, we shouldn’t just replicate the old, consumer-driven economy. We need to build the next economy. The key is for metropolitan areas to develop economic plans tailored to their own strengths. Judith RodinThe quantitative research is Klaus Baur and Guenther Krug of Bom- Ease of doing business is expanded thisrepresented by 10 indicator categories bardier detail the sustainable and efficient year, but the top four—Hong Kong, Singa-that include 66 individual data variables. edge offered by intra- and intercity rail travel. pore, New York and London—change placesThe makeup of the indicators also mirrors the minimally.study’s hypothesis: Cities with well-rounded Health, safety and security plumbs theeconomies and forward-looking policies and vital signs of city life, and, again, Stockholm Cost finds five North American cities on top.actions over the long run will prove best for and Toronto emerge in best shape. But Berlin is right below. And René Gurkabusinesses and residents. of Berlin Partner tells what the reunified city Sustainability raises a finger in the wind to is doing to turn its many cultural advantagesIn addition to this quantitative research, find Berlin, Sydney and Stockholm perform- into an economic plus.discussions with leading authorities and ing best but four developing cities joining theexamination of various issues add insight top 10. Planning for sustainability takes the Demographics and livability looks atinto the numbers. first step toward results, and we examine how socioeconomic well-being and finds this Johannesburg, Mexico City, Shanghai, Abu complex quality best offered in Stockholm,Rem Koolhaas, architect, writer and Harvard Dhabi and New York are handling it. Kerry Sydney, Toronto and San Francisco. The painprofessor, has worked in many of our 26 Zhou of Goldwind Technologies discusses the of commuting merits a detour of its own tocities. A discussion with him covers modern- inroads renewable energy is making into the compare traffic policies.city issues from density to globalization to urban energy mix in China and worldwide.the particular beauties and tragedies of Lifestyle assets follows the urban blissindividual places. Economic clout is earned over time and toward New York, Paris and London. And changes little this year. London, Paris and we examine the cobweb of issues encirclingIntellectual capital and innovation has New York continue at the head. The top historic preservation as rage for the newbeen expanded to nine variables this year, and 10 are divided evenly between five North looks in the rearview mirror to find vintageStockholm and Toronto perform consistently American and European cities and five Asian chic. In the end, the gaze of Leif Edvinsson,well. Translating education theory into cities. Mortimer Zuckerman brings a who pioneered the study of intellectualclassroom reality is a paradox we investigate. broad perspective in discussing the economics capital, is firmly fixed on future “cities of landscape as a major developer, publisher and mindware.”Technology readiness focuses purely on former Harvard professor.hardware, and New York, Seoul and Stock-holm come out on top. Judith Rodin,president of the Rockefeller Foundation andformerly the University of Pennsylvania, offersher own extraordinary range of insight from See videocasts with architect Rem Koolhaas as well as Vitoreducation to infrastructure and migration. Knijnik, creative head of Y&R Energy in São Paulo, hear podcasts with Mortimer Zuckerman and read the full interviewsTransportation and infrastructure lays condensed here on the web at www.pwc.com/cities. The weba physical cornerstone enabling much else also offers interactive tools to customize heat maps and modelin every city to work. Paris, Chicago and New your own city based on all 26 cities and 66 variables, as well asYork perform best. The changing ideal and detailed background on sources and definitions.reality of what a cityscape should and doeslook like bears discussion of its own. Partnership for New York City | Cities of Opportunity | 21