Economist Intelligence Unit (EIU) has rated Dubai and Abu Dhabi as the most competitive cities in the Middle East.
The report, commissioned by Citigroup, analysed the characteristics of 120 cities worldwide and calibrated the competitiveness of cities on measures based on its ability to attract capital, business, talent and tourists. Dubai topped with 55.9 points, followed by Abu Dhabi at 55.8 points, and Doha at third position with 52.9 points.
However, globally Dubai and Abu Dhabi was ranked 40th and 41st, respectively. New York was ranked as the most competitive city in the world.
“New York in particular does well because it does well across a range of areas,” said Leo Abruzzese, the EIU’s global forecasting director. “It has finance, yes, but it also has media and arts and fashion and technology.”
London was ranked second and Singapore third. Hong Kong & Paris were both ranked 4th, and rapidly growing cities in the emerging markets, such as Shenzhen ranked 52nd and Mumbai ranked 70th.
The report was based on a ‘Global City Competitiveness Index’ that measures cities across 8 distinct categories of competitiveness and 31 individual indicators. Categories include economic strength, human capital, institutional effectiveness, financial maturity, global appeal, physical capital, social and cultural character and environment and natural hazards. A city’s overall ranking in the benchmark Index is a weighted score of the underlying categories.
The report specifically singled out the cities of Dubai, Santiago and Singapore as the most opportunistic cities. “Dubai, Santiago and Singapore are just three examples of cities with specific programmes in place to attract talent from elsewhere,” the EIU report said.
“Dubai is rapidly building a business friendly, zero tax environment to attract workers; Santiago is helping host a national initiative to directly incentivise hundreds of entrepreneurs from around the world to move there; and Singapore is bolstering its reputation as the gateway to Asia’s growth, with a first-rate living environment to support it,” The Economist survey explained.
The report also revealed a clear correlation between overall city competitiveness and physical capital, which suggests that physical capital is a prerequisite for competitiveness — good infrastructure that undergirds a city probably boosts all its other scores.
“In an unprecedentedly short space of time, cities such as Dubai, Shanghai and Shenzhen have carved out a new physical identity to match their rapid economic emergence.”
The report also cites the economic strength of Doha and Abu Dhabi, Dubai’s financial maturity and Riyadh’s relatively low risks in terms of environmental and natural hazards.
Emerging Asia vs Legacy West
Asian cities dominated the ‘economic strength’ indicator category, which had 16 out of 20 cities — with China’s Tianjin, Shenzhen and Dalian at the top of the list, together with 8 other Chinese cities.
Singapore, Bangalore, Ahmedabad, Hong Kong and Hanoi, making up the rest of it.
Asia’s economic vibrancy
Zooming in on the economic strength indicator, the EIU noted that Asian cities dominated this category. All but four of the top 20 cities were Asian–with China’s Tianjin, Shenzhen and Dalian at the top of the list, together with eight other Chinese cities.
The report also stated that the top 32 Asian cities are all forecast to grow by at least 5 percent annually between 2012 and 2016, with 12 of these cities growing by at least 10 percent. In a stark contrast, most of the developed cities in Europe and the United States is expected to have low single-digit growth, according to the report.
However, the report also mentioned that cities such as New York and London will continue to be the most globally competitive, despite concerns over ageing infrastructure and large budget deficits.
“Although many Western countries have somber growth outlooks over the next decade, some of their leading cities may be able to harness their legacy advantages and global connectivity to continue to compete and succeed against fast-growing emerging market cities,” the EIU surmised.
Sources: Citigroup.com, ZDNetAsia.com