Innovation Is Tomorrow’s Differentiator Innovation is going to be a major differentiator in the years ahead—making one city potentially stand out in the future among many dynamic places. Of the four dimensions of leading indicators used in the Outlook, innovation by far has the lowest average score—two-thirds lower than the next lowest dimension (economics) and 80 percent behind the leading dimension (personal well-being). Cities big and small are awakening to innovation’s power to drive growth. As technology continues to disrupt entire industries—basically changing the way people live—cities that create an environment and buzz that attract and retain entrepreneurs, while also hanging onto their home-grown talent, will be best positioned for future success. Consider San Francisco, long known for a culture of innovation. In the Outlook, San Francisco is by far expected to maintain its global lead in innovation, but at some point, the competition promises to get steep as more cities vie for the innovation title. For example, Mexico City, Nairobi, and Guadalajara have set up university-sponsored incubators to draw in more entrepreneurs, while Boston, Munich, and Shenzhen are quickly becoming hotbeds of patents. San Francisco could be in for a spirited struggle in the years ahead.
Looking Ahead
Perhaps the most intriguing question emerging from this year’s study is: What will the Global Elite do with their increasing influence? Cities are becoming stronger and increasingly exerting a sphere of influence that transcends country borders. Much like countries formed entities such as the G8 and NATO, cities are self-organizing into new power consortiums. The C40 Cities Climate Leadership Group, the result of a 2005 summit hosted by London’s then-mayor Ken Livingstone, is a global group of megacities that have joined forces to reduce greenhouse gas emissions. Similarly, The Chicago Council on Global Affairs holds its Global Cities Forum, creating a platform for the leaders of the world’s major cities to come together to share their perspectives. The future will likely see the formation of more city networks focused on a range of issues.
For many decades, A.T. Kearney has focused on globalization opportunities, with a wide range of capabilities to inform business and government strategies, including our Global Business Policy Council, Global Retail Development Index, and the Foreign Direct Investment Confidence Index. A common theme that runs through these capabilities and both the Global Cities Index and the Outlook is an increasing appetite for expansion and investment at the market level—often defined by city boundaries—rather than at the country level. This trend can be tracked by the growing availability of city-level data. We have monitored many of these cities since 2008, resulting in a comprehensive, multiyear fact base that provides insights into consumer and industrial trends that inform business strategies—from market entry and development plans to locations of regional headquarters, research centers, and operational hubs. Incorporating new information into our seven years of city-level insights will continue to be a key part of A.T. Kearney’s Global Cities research, especially in the coming years as the leaders of the Outlook become the leaders of the Index.
The authors wish to thank their colleagues Nivedita Sinha, Victoria Pisini, and Michael Evar for their valuable contributions to this paper.