Leonard Steinberg ;  March 6th, 2013

Battered but not bowed – New York remains the world’s financial powerhouse weathering the storm

New York has beaten off both the elements and stiff competition from other cities to claim pole position in The Wealth Report’s latest Global Cities Survey

Towards the end of 2012, New York was battered by Hurricane Sandy. Such was the ferocity of the onslaught that much of the city’s subway was flooded and thousands of households were left without electricity. With just days to go before the presidential elections, campaigning in the hard-fought contest between Barack Obama and Mitt Romney even had to be suspended.

But triumphing in the face of adversity is the true marker of a global city. Think of London’s resilience after The Blitz and, of course, New York’s own refusal to be cowed following the 9/11 terrorist attacks.

It therefore came as no surprise to see the Big Apple quickly back on its feet post-Sandy, nor that it secured top slot in The Wealth Report’s annual Global Cities Survey, beating off its arch-rival London as well as a veritable pack of baying Eastern urban tigers.

The survey was launched in 2008 to monitor city-level power shifts. Its objective is to assess the key urban centres across the world in terms of investment opportunities and the influence they have on global business leaders and decision makers.

Data-led rankings such as the Global Cities Survey can only tell us so much about a city. But they offer an intriguing snapshot of the world’s shifting urban hierarchy.

Cities are where wealth is created, where networks develop, where ideas are incubated and knowledge curated. In short, they matter.

East versus West

Our Global Cities Survey’s four-part assessment of performance is designed to give the most rounded picture of the places that matter to the wealthy and influential. The survey focuses on four categories: economic activity; political power; quality of life; and knowledge & influence.

While New York and London hold on to the top two spots, the Asia-Pacific region, with four entries, has the tightest grip on the top 10. Europe and North America also feature, with three cities each. The Middle East’s first entry, Dubai, is at number 29, while South America’s leading cities, Buenos Aires and Sao Paulo, only just scrape into our top 40.

New York’s strength is reflected in its consistent showing across all four of our categories. The city is particularly strong in economic activity (being the wealth and financial centre for the world’s richest economy undoubtedly helps) and knowledge & influence, where the power of US media firms shines through. Indeed, there is a close relationship between economic activity and overall ranking, with New York, London, Paris and Tokyo occupying the top four slots for both.

When we turn to political power, Washington DC unsurprisingly leads the field, followed by Beijing and then Brussels – a small city in many ways, but one that punches above its weight politically as the headquarters of the European Union. Berlin sits just one place lower down, highlighting the growing tensions within the world’s largest economic bloc.

The fact that Berlin has scored so highly for political power will come as no surprise, given the tempestuous conditions within the eurozone and Germany’s status as Europe’s powerhouse economy. While the EU’s main institutions are still based in Brussels, Berlin is now to all intents and purposes its de facto capital and is where the key decisions affecting the future of the union are increasingly being made.

This shift in power has been accelerated by the euro crisis and German Chancellor Angela Merkel is now arguably the most important leader at the table; so much so that TIME magazine named her as one of the most influential people in the world in 2012.

News that German and Chinese leaders have pledged to increase trade between their countries – the largest economies in Europe and Asia respectively – is also a boost for Berlin, which is likely to reap the rewards of improving relations with the world’s other leading manufacturing-dependent surplus economy.

Getting personal

Perhaps the most contentious indicator in the survey is quality of life. No two people will share the same idea of that makes the perfect lifestyle. For some, it will come down to hip nightlife and stylish shops. For others, the most important criterion might be art and culture, or proximity to the great outdoors.

Measuring cool and other intangible factors is pretty much impossible, so we have based our findings on elements that can be measured, such as crime levels and environmental quality. Based on these criteria, our table is topped by the usual suspects: those northern European, Australian and Canadian cities with an international reputation for providing the ultimate urban utopia. Zurich comes first, followed by Melbourne, Sydney and Toronto.

Residents of New York and London might bridle at the thought that such locations can push their own cities into sixth and eighth places respectively, but these towns do have the data to back up their claims to urban bliss, even if they wouldn’t necessarily get the vote of the fashionista or sybarite.

Melbourne is a case in point; the city topped the Economist Intelligence Unit’s most recent global liveability report on the best and worst living conditions around the globe. The city scored a near-perfect 97.5%, making it the most liveable of the 140 cities surveyed, only losing points for climate, culture and petty crime.

However, rising temperatures and sea levels are expected to drive up the cost of living in Melbourne over the next few years. In fact, a recent report released by the Melbourne Community Foundation identified climate change as one factor that has the potential to have a dramatic negative impact on quality of life in the city by 2030.

Brain power

For the last of our four measures, knowledge & influence, the table was led by London with its proliferation of leading education and media outlets. With one of the largest concentrations of universities and higher education institutions in the world, the UK capital is widely recognised as a global leader in education.

According to the UK Council for International Student Affairs, London’s student population includes 102,735 international students, while Imperial College London was named as the eighth best institution in the world by The Times Higher Education World University Rankings. For media, London has few rivals. Most of the UK’s national media, whether broadcasting, press, online or advertising, is based there. The BBC, which has its headquarters in central London, is the world’s largest media organization.

China rising

Returning to our main ranking, the real question is, how long can it be before one of mainland China’s leading cities occupies a top five spot?

Ticking the economic box is unlikely to be a problem. In the past 10 years China’s economy has quadrupled in dollar terms and Shanghai already ranks fifth for economic activity in our survey, with Beijing in sixth place.

The Shanghai Statistics Bureau reported that Shanghai’s economy expanded 7.4% year on year in the first three quarters of 2012. Its GDP, which was 1.44tr yuan (US$228.5bn) in the first nine months of the year, accounted for over 4% of total Chinese output. The city is also home to the headquarters of 19 of the world’s largest public corporations, according to the Globalization and World Cities Research Network, up from 15 in 2009 and just four in 2006.

A significant number of Chinese cities, not just Shanghai and Beijing, are already economic giants in comparison with most Western centres. However, as already discussed, other factors determine what makes a truly global city.

The real challenge for China’s new leadership will be how it tackles the country’s pressing social issues, such as decreasing the widening wealth gap. These issues are closely intertwined with the future of its powerhouse cities.

London, Paris, Tokyo and especially New York will continue to benefit from their legacy infrastructure, and to trade on their open societies, transparent governance and status as safe havens and knowledge hubs, as well as their technological and travel connections, for some time. But is it realistic to assume that they can retain their leading status, with relatively miserly economic and demographic growth?

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