What does this town have to do to become a “world city”?

Image: NASA/public domain.

People love ranking stuff. Over the years, a variety of organisations and academics have had their say on which cities are the best in the world under a variety of criteria: which cities are the most liveable, say, or the most friendly to millionaires.

The ultimate accolade, though, the gold standard of city rankings, is to become a “world city”: important not just to a country or region, but to the entire globe. No one really cares what happens in Exeter (except, perhaps, the residents of Exeter); everyone cares what happens in New York.

The characteristics required to qualify for this label are simple enough: it’s all about (sorry, this is a horrible word) “connectedness”. To be a world city, you need good transport networks to tie you into the world economy: that means a major international airport, possibly several, and ideally your own docks. You need your own, home grown media and communications industries. And your city should also be full of high-value jobs in international corporations, mainly in the services, finance and media industries. The presence of government and cultural centres helps, too.

If you have all those things then you probably have an economically powerful, international-looking, multicultural population and, congratulations, you are a world city.

But identifying these characteristics is one thing; turning them into a single, definitive ranking is quite another. Most authorities agree that New York and London should top the list. But as you move down the league table, things become a bit murkier. How do Tokyo and Beijing fare against Madrid or Toronto? How do we decide which cities should be relegated, like an under-performing football team, to some lesser division? And how can a city rise up through the ranks?

Below is a chart comparing four of the most recent sets of rankings (some have only been released once, or come out every few years, hence the earlier dates).  These four feature quite different criteria, taking in factors including politics, economics, and culture. But, despite some variation, there’s a lot of agreement over which cities come out on top:

All four lists, you’ll notice, are dominated by the same handful of cities (although a few others, such as Seoul and LA, make one appearance each as wildcards). The implication is that strong performance on some criteria leads to strong performance on the others: when a city becomes a global destination for finance, say, it’s more likely to become a cultural hub too. In jargon-speak, this is known as the “aggregation effect”: New York, London and other big-hitters are so important that people flock to them and so stay important.

So what criteria do these different lists use to rank their cities? Here’s CityMetric’s brief guide to the major rankings.

 

In 1998, some brains from the Globalisation and World Cities (GaWC) think-tank tried to decide, once and for all, how cities should be ranked. As part of something grandly titled “The World According to GaWC”, they graded cities by their activity in four different service sectors: accountancy, advertising, banking/finance and law.

Cities were divided into categories, ranging from “Alpha++”, down through Beta and Gamma, before finally reaching “sufficiency level” (cities which don’t quite qualify as global cities, but do at least have some influence).

The elite Alpha++ category has always been exclusively co-occupied by New York and London. The others, though, are more volatile, and in 2008, Shanghai and Beijing both jumped up into Alpha+, skipping an entire category (they were way down in Alpha- in 2004’s rankings).  

These photos of Shanghai’s financial district, Pudong give some clue as to why:

Pudong in 2000. Image: public domain.

Pudong in 2013. Image: PierreSalim at Wikimedia Commons.

We would include a picture of the skyline in 1990, but it’s just marshland and some low-rise apartment blocks.

Those new skyscrapers in the bottom picture are filled with the offices of international corporations: HSBC and IBM both occupy entire buildings and the one that looks like a bottle opener houses the new Shanghai World Financial Center. All this services-led development equates to big tickmarks in the GaWC’s book.

It’s a similar, if less dramatic, story in Beijing. The People’s Bank of China, the country’s central bank, has its headquarters in the city: as China becomes a more formidable economic force, this becomes a bigger point in the city’s favour.

Where there are promotions, there must also be relegations. Milan dropped down from the Alpha+ category when Dubai was bumped up in 2010: it’s the most populous city in Italy, but its financial centre isn’t on the level of other Alpha+ cities. Between 2010 and 2012, Glasgow also fell, from Gamma+ to mere Gamma. This is probably because it fared badly in the recession, losing 15,000 jobs between 2012 and 2013 (the 2012 GaWC figures were, confusingly, published in January 2014.)

A competing ranking, the Global Cities Index, first reared its head in 2008 and has been updated every two years since. Compiled by the American journal Foreign Policy and consulting firm AT Kearney, it uses a much wider set of criteria than the GaWC, including such important and excitingly-worded criteria as “human capital”, “cultural experience” and “political engagement”.


Conveniently for its American compilers, US cities fare rather better in this list. In the 2012 GaWC rankings, only 3 of the 23 Alpha cities were in the US. In the Global Cities Index, 4 make the top 10: New York, LA, Chicago, and Washington DC, which scrapes into 10th place entirely through its political importance.

Being a seat of government has worked in Beijing’s favour, too, and the capital of the People’s Republic rose swiftly from 15th place in 2010 to 8th in 2014. Shanghai has fared less well, and is languishing in 18th. It scored highly on business activity and human capital, because lots of foreign businesspeople live there; but poorly on culture and political engagement.

As with other rankings, though, there’s not much shifting around at the top of the scale – the irrepressible NYLON duo have dominated the top two slots ever since the ranking began.

Also in 2008, the Institute for Urban Strategies in Tokyo published its first annual Global Power City Index. This list ranks cities by economy, research and development, environment, liveability, and accessibility. Its focus, according to its compilers, is cities’ ability to “compete with other cities worldwide in drawing creative people and companies to them”. This emphasis on creative people gives Amsterdam and Vienna, both art cities, higher positions than on any other list.

Since 2012, there’s been a veritable flood of new lists, from the interesting to the absurd.  The Wealth Report, compiled by estate agent Knight Frank LLP and Citibank, rates cities by how important they are to high net worth individuals, via the medium of (here comes the science part) asking them to name their favourites. The results come out roughly the same as in other rankings, with the exception of Geneva, which scores much more highly. Coincidentally, a lot of rich people keep their money in Switzerland.

In 2012, the Economist’s Economist Intelligence Unit published its Global City Competitiveness Index, which is based on cities’ ability to attract tourists, business and capital. Western cities dominate the top ten because of their “human capital” (or “people”, as people call them). These cities’ longer histories makes them more adept at attracting  visitors, businesses and what the compilers call “talent” (and what people, again, would call “people”).

What all the lists have in common is an emphasis on how international a city is – whether its population and companies hail from overseas, whether it is attracting international business, and whether it’s engaging with the international economy. If your city can’t attract people to it from all over the globe, then it’ll never make the list. Sorry.

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Three ways the geography of Britain’s exports has changed since 1841

Those were the days: Manchester cotton mills, 1936. Image: Getty.

It’s the 1840s: red bricks, smoky chimneys and big industrial mills. The introduction of the steam engine has resulted in radical improvements to the UK’s production of textile, metalwork and other manufacturing goods. The country is reaping the fruits of the industrial revolution; it is pursuing policies of free trade with the rest of the world and is the most powerful nation on earth.

Fast forward 175 years and much has changed since then. Historical data from the census gives us a broad sense of how the UK’s industrial structure has evolved over time, and what this means for cities.

In particular, the data shows that there are approximately five times (20 million) more jobs today than there used to be in 1841. However, three major changes have meant the UK’s present industrial structure is fundamentally different from that of the Victorian Age.

There has been a total shift from exports jobs towards employment in local services.

Back in 1841, export industries – i.e. those industries that sell outside the local economy to regional, national and international markets – accounted for 60 per cent of all private sector jobs in England and Wales. Around 175 years later, these industries only account for 25 per cent of all the jobs while the bulk of employment is now in local services such as in retail, leisure and construction. Indeed, while there has been a 14 per cent decline in ‘goods’ export jobs between 1841 and 2011, employment in local services grew by 800 per cent.

This shift is the result of huge increases in productivity. Technological improvements, globalisation and other structural trends have made the UK’s exporting sectors more productive, putting money in people’s pockets. As a result, demand for local services has increased, driving up employment in these sectors.


Within export jobs, services exports have become ever more important.

In 1841 the UK’s exporting sectors were dominated by manufacturing, with services jobs accounting for just 1 per cent of all exports jobs. Over the decades, technological improvements and globalisation have meant the UK has gradually shifted away from manufacturing and that the majority of today’s export jobs (59 per cent) are now in ‘services’, such as financial services, information & communication and other professional services.

But this is not to say the UK doesn’t make anything anymore. The aforementioned productivity improvements mean that the UK is still a big exporter of goods today – but it now requires fewer people to be employed in these industries.

The UK’s export economy has shifted South.

Led by London, cities in the Greater South East accounted for 11 per cent of all exporting jobs in 1841. Some 175 years later, these cities account for 30 per cent of all exporting jobs in England and Wales.

This shift of the export economy towards southern cities happened for two reasons. Firstly, cities in the Greater South East have been those best able to attract high-skilled exporting jobs. In these cities, between 1841 and 2011, growth in high-skilled exporting jobs has been twice as fast as in cities in the North and Midlands. Secondly, cities in the North and Midlands have experienced a large fall in their export base in the second half of the 20th century due to the decline in mining and manufacturing and have struggled to replace these jobs. Of the new exporting jobs they have created, these have tended to be in warehousing and call-centres rather than shifting towards exporting higher-value services.

As a result, between 1841 and 2011, cities in the North and Midlands have doubled their number of export jobs, but cities in the Greater South East have had a five times increase in export jobs since 1841.

Click to expand. Source: University of Portsmouth, ‘A vision of Britain through time’.

This is reflected in the experience of specific cities. Take Stoke and Brighton for example: the two cities now account for a similar amount of jobs, but at its peak in 1951 Stoke had three times more export jobs than Brighton. The city was renowned in the UK and internationally for its industrial-scale pottery manufacturing, but since the decline of this industry from the 1950s its economy has never fully recovered.

On the other hand Brighton did not have a strong manufacturing presence in the 1900s, and it played a much more marginal role in the national economy; but over the years the city has continued to grow by attracting high-skilled workers and businesses, and it is now one of the most successful cities in the country.

Click to expand. Source: University of Portsmouth, ‘A vision of Britain through time’.

The divergence in the performance of cities in recent decades has been the result of the varying performance of their exporting sectors. As the data shows, cities need to replace jobs in declining export industries with jobs in new – more productive – exporting sectors, and it is cities in the Greater South East that have been most successful at doing this.

If Local Industrial Strategies are to help improve the fortunes of struggling places, than they should focus on measures aimed at removing the barriers that deter high-skilled exporting businesses to locate in cities outside the Greater South East – particularly investing in skills and focusing on maximising the benefits cities can offer to businesses in terms of access to knowledge and shared infrastructure.

Elena Magrini is a researcher at the Centre for Cities, on whose website this article originally appeared.

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