The ability to adapt to the great technology wave is one of the hallmarks of today’s leading global cities.
But it takes more than that to be a contender. To stay competitive cities must nourish their technological bases by supporting education and research facilities that encourage innovation and entrepreneurship. And that requires creating an environment—affordable housing, clean air and lifestyle amenities—to attract and retain the best talent.
The most successful cities do not rest on past laurels, says Jeremy Kelly, JLL Director in Global Research. They quickly adapt to change and are always looking ahead with a global view – and often have more in common with each other than they do with the rest of their respective nations.
“With more than half the world’s population currently living in cities, a proportion that is expected to grow substantially over the next few decades, the success of our cities is taking on an even greater importance,” notes Kelly. “Despite various political upheavals and ongoing economic uncertainties, many cities continue to show impressive dynamism. Key to their success is their agility and openness, enabling them to adapt quickly to each new wave of global change.”
Asia’s rising stars
Many of Asia’s rapidly evolving cities showcase the ability to absorb technological change into their DNA and are fast becoming a magnet for growing populations, businesses, and foreign direct investment. While their momentum is largely driven by favorable demographics and rising household incomes, this is increasingly being supported by the growing presence of outsourcing, IT services firms and local start-ups.
The Asia-Pacific region was home to half the top 30 fastest changing cities, according to JLL’s latest City Momentum Index (CMI). Top of the pile is India’s technology hub Bangalore, which has overtaken London to take the title of the world’s most dynamic city.
Other Indian cities are also quickly rising up the rankings, accounting for six of the top 30. China accounted for five, while Vietnam, a growing recipient of foreign direct investment, saw Hanoi and Ho Chi Minh City make the top ten.
In order to remain competitive in a global world, these cities must turn their focus on longer-term drivers of growth, says Kelly. “A combination of specialized knowledge industries, strong education institutions and desirable and supportive living conditions help sustain the momentum in the longer term,” he explains.
Tech sector driving momentum in mature cities
Technology is also spurring growth in developed markets. Secondary U.S. cities that demonstrated the same level of support for technology also ranked highly in the CMI including Austin, Seattle and Raleigh-Durham. U.S. technology capital, Silicon Valley remained near the top of the list.
Established World Cities, such as New York, Paris and Los Angeles, have integrated technology into their already diverse economies, building on their traditional strengths in areas like financial services, media and creative industries. This partially accounts for London’s resilience despite Brexit. While no longer at the top of the list, as it had for the past two years, London still retains a position among the top 10 most dynamic cities.
The downside of change
As cities become home to a greater share of the world’s population – 70 percent of the world’s population is set to be living in cities by 2050 – they will increasingly set policy independent of their national government, says Kelly. “It will place more emphasis on mayoral policy and the ability to shape the future of urbanization. Successful cities are expected to be those that attract highly skilled workforce and offer fertile environments for innovation.”
Yet rapid change can also bring additional challenges. Affordability and space constraints are having a big impact on cities such as San Francisco and Hong Kong. Meanwhile, emerging megacities such as Chennai, Manila, Delhi and Mumbai face significant infrastructure and quality of life issues, with high levels of inequality, congestion and pollution, hindered by weak city governance, Kelly notes.
Despite the many challenges that our cities face, the world’s most robust, agile and open cities are generating considerable momentum and energy. They are taking the lead in shaping our future landscape and are showing that real estate plays a key role in city success.