Mapping Pathways to City Success
While Hong Kong ranks in the “Big Seven” of global cities, it faces rising competition from up and coming contenders, and can learn from its peers in respect to innovation and lifestyle.
Gone are the days when a city's success was measured by its GDP growth and economy alone. To be considered a World City these days, urban centers need to demonstrate liveability, resilience, diversity, and transparency. These new dimensions present both opportunities and threats to Hong Kong's future competitiveness.
As globalisation, urbanisation, and technology trends shift and accelerate, a new world order of cities is emerging. Cities must now compete across an expanding array of criteria including speed of change, resilience strategy, and their capacity to implement bold transformational projects.
"This new urban science is shaping cities, real estate markets, and the way investors and corporates assess opportunities in each city," says Jeremy Kelly, our Director of Global Research, and an author of our latest Cities research, World Cities: Mapping the Pathways to Success.
Based on the distinctive roles that cities play in the global economy, we have identified ten city groups that have similar personalities, pathways, and imperatives. Within this typology of world cities, Hong Kong is firmly positioned as one of the "Big Seven" most globalized cities, alongside New York, London, Paris, Singapore, Tokyo, and Seoul.
Others are quickly catching up. Kelly predicts that the "Big Seven" will become the "Big Ten" by 2022, when Shanghai, Beijing, and Los Angeles are likely to rank among the most globalized cities.
Today's "Big Seven" have a combination of scale, global reach, and economic and cultural influence that attracts a large share of cross-border corporates, international talent, trade, conventions, and tourism. They attract an incredible 25% of the world's invested real-estate capital from funds, financial institutions, and high-net-worth individuals. "Hong Kong and Singapore, in particular, are forecast to set the standard and shape the next generation of high-density urbanism," says Kelly.
Stiff Competition for Top Spots
Nevertheless, Hong Kong and Singapore face growth hurdles such as affordability and geopolitical worries, as well as competition from "Contender" cities such as Sydney, Shanghai, and Beijing. Sydney is often ranked as one of the most livable cities in the world and has strong infrastructure and technology credentials. Both Shanghai and Beijing have also rapidly developed high-quality clusters of infrastructure and gained a critical mass of corporations.
High levels of innovation and livability are strong brand assets that appeal to investors and top talent. Hong Kong is focused on improving the innovation landscape; its "Smart City Blueprint" has been introduced and the government also provides funding programs and collaboration opportunities with mainland cities.
However, Hong Kong is perceived by some to lack technology-focused education, and to be slow in adopting new technologies, and a true culture of entrepreneurship that could energize its start-up scene.
To that end, Hong Kong could pick up a thing or two from another group of "New World Cities," branded as "Innovators". With a focus on R&D and a growing cadre of globally leading innovative firms, these are second only to the "Big Seven" in terms of their real estate investment "intensity". Berlin, Boston, Seattle, and Silicon Valley are among the top 20 cities that attract the greatest volume of real estate investment relative to their economic size.
And while Hong Kong offers wonderful nightlife and dining as well as green space and parks, its affordability, congestion, and air quality challenges means it lags our group of "Lifestyle" cities, situated in Europe, North America, and Australasia, where high-amenity urban platforms and exceptional standards of public space and services have driven growth in creative industries and the technology sector . Oslo tops JLL's Investment Intensity Index global ranking, and Auckland, Helsinki, and Vancouver have seen the largest rental growth for prime offices since 2000.
"It is the ability to foster innovation pathways and provide affordable and quality living that is a key imperative for any city's success," says Kelly. "Hong Kong, although one of the most established world cities, has plenty to learn from its peers in innovation and lifestyle."