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Global Cities Index updated-we’re #6!

Friday 29 October, 2010

The Chicago Council on Global Affairs, AT Kearney Consultants, & Foreign Policy Magazine updated their Global Cities Index, which was introduced 2 years ago in Chicago.  As you can see Foreign Policy mag’s Global Cities Index event-we’re #8! Chicago moved up 2 spots from #8 to #6.  A.T. Kearney published The Urban Elite, which provides more details on how the index was created & updated.

Marshall Bouton kicked off by noting that cities are becoming increasingly important because 60 years ago, the world’s population was 30% urban.  By 2050, 70% of the population will live in cities.

Paul Laudicina of A.T. Kearney put cities in perspective.  Despite the Y2K technology boom’s contention that place doesn’t matter, it does.  There is a relationship between size & movement, i.e. the bigger something is, the slower it moves.  But innovation centers differ:  if they get 50X bigger, innovation increases 130X.  Kearney increased the factors for censorship/freedom of the press.  The top 10 are little changed.  5 of the top 10 hail from the Asia Pacific region.  There will be 31 megacities, (with populations of 10M+) by 2020.  Tokyo rose because of culture & policy organizations.  Paris fell because of a lack of information exchange, broadband subscriptions, & international coverage.  Sydney gained because of culture & broadband.  Chicago raised its ranking because of its international conferences, arts, & Kraft’s spinoff.  Chicago’s strengths are in business, human capital, & culture.

Rita Athas of World Business Chicago, the city’s economic development group, finds this index to be a great marketing tool.  But she learned @ the recent Small Business Forum that only 15% of American companies export, & 58% of them export only to 1 country, (most likely Canada).  However 97% of exporting companies are SME’s.  Foreign Direct Magazine ranked Chicago #1 destination for foreign direct investment (I could find most recently in 2007/8:  New York won in 2009/10).  She also mentioned a new city of Chicago office of international affairs, but I couldn’t find it anywhere.  Mayor Daley proposed foreign investors get involved with the O’Hare rail express when he was in Shanghai & Korea recently. This report provides the roadmap for Chicago’s global future.

Dick Longworth, Sr. Fellow @ CCGA explained about the addition of new criteria in the index for the free exchange of information.  He supported the addition by noticing that of the 39 cities that fell in the rankings, 26 of them were judged to be not free by Freedom House, in other words, they fell because of censorship.  Knowledge economies require the free flow of information while globalization requires the free flow of everything.  By working in countries without these freedoms, they risk stifling risk-taking & entrepreneurship.

Q&A

  • Chicago’s vision needs to be further articulated.  Branding a city is a challenge.  Longworth has said Chicago has transitioned from being the city of broad shoulders to the city of big foreheads.
  • Venture capital funding is still a problem in Chicago. The city gets 27% of National Institute of Health grants, but only 4% of venture capital.
  • Like the rest of the world, Chicago needs to invest in its infrastructure.  The question is how to pay for it.  That Chicago is a hub of higher education & transportation keep it in a strong position.
  • Criteria for foreign language speaking capabilities & international travel would be good to add to the index, but it’s been difficult to get comparable data from all geographies.  Travel data is available for countries, but difficult to get for cities.
  • Chicago had a poor information exchange score for a number of reasons:
  1. few foreign bureaus are based in Chicago
  2. Chicago gets little play in foreign media
  3. the local media doesn’t provide much international coverage, for example, no mention of Mayor Daley’s recent trip to Shanghai & Korea.
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