What can global cities learn from America about future-proofing?
When it comes to meeting the challenges of tomorrow, many top American cities are a step ahead of their counterparts in Asia and Europe.
Much of their advantage is down to their position at the forefront of technological innovation; the U.S. is home to some of the world’s most dynamic technology hubs drawing in talent from around the world and producing the innovative goods and services that drive digital progress.
Take San Francisco, which tops the CMI 2018 Future-Proofing rankings, and Silicon Valley, which is in second place. Between them these two cities account for more than a third of all tech unicorns created over the last 15 years. In addition, they boast the largest number of new tech start-ups.
New York, in third place, also leverages its strong technology credentials, putting it in a strong competitive position for the future. It employs more people in tech jobs than anywhere else in the U.S. and is second only to San Francisco in terms of the number of tech start-ups.
Jeremy Kelly, Director, JLL Global Research, says: “America has some fairly unique features working in its favour such as a large domestic market, a unified regulatory system and significant levels of venture capital.
“Nevertheless, the sophisticated technology ecosystems underpinning its market help to give America’s top cities some of the key attributes necessary to manage and benefit from the rapid technological shift underway in the global economy.”
Yet while tech and innovation capabilities have a huge role to play in ensuring today’s top cities stay relevant tomorrow, there are many other factors at play. And these must all work in combination, not isolation, to deliver the future-proofing qualities that real estate investors, developers and companies increasingly seek in cities, Kelly adds.
The skills of tomorrow
Cities need the best people to stay at the top of their game – and a strong talent pipeline requires a world-class education system. Boston, for example, plays host to some of the world’s leading research institutions and its brightest minds, which make the city one of the most prolific sources of patent applications globally.
New York also has a solid presence of higher education establishments creating a pool of highly skilled graduates, while in Southern California prestigious university networks in Los Angeles and San Diego are training the next generation of tech talent. Indeed, their combined metro areas are home to more people working in computing and mathematics-related fields than anywhere else on the West Coast.
“With access to talent a key consideration for corporate location strategies, businesses need to understand which cities have the attributes necessary to attract and retain skilled workforces,” says Kelly. “Talent attraction is not confined to major cities or the largest research clusters, factors like quality of life and affordability play a key role and contribute to the strong appeal of markets like Denver and Austin where over 40 percent of residents over the age of 25 have a degree.”
Yet the cities of tomorrow cannot just be reliant on the people who choose to work there; they also need companies and investors to have the confidence to collectively plough billions of dollars into their local economies. It therefore helps that American cities have high levels of market transparency on their side to reassure investors and allow for the in-depth performance and market analysis which aids decision-making. As Kelly says: “For investors, there is an imperative to understand which cities will be able to gain from technological transformation for long-term value preservation and growth.”
Areas for improvement
Yet American cities aren’t leading the way across all future-proofing factors; in fact when it comes to sustainability many of their big-hitters have much to learn from their smaller neighbours and European counterparts. Stockholm, for example, is one city leading the way for air quality, after introducing a congestion tax back in 2007 which has significantly cut traffic levels despite rapid economic and population growth.
Progress is, however, being made. American cities are taking steps to improve their environmental credentials, from investing in new public transport infrastructure to launching new initiatives to cut traffic levels on the roads. Plus, dozens of municipalities are pledging to transition to 100 percent renewable energy in city-run buildings in the coming decades. Furthermore, Washington D.C. was last year named the world’s first LEED Platinum city, recognizing its commitment to sustainability and human health alongside its economic prosperity.
Controversial national government policies could also have an impact on US cities’ ability to attract and retain talent. “There is a danger of losing the competitive advantage that US cities have gained as a result of policies designed to restrict in-migration while increased protectionism is likely to have wide-ranging long-term effects both globally and domestically,” Kelly adds.
Global cities with their eye on the future
In today’s global landscape, competition is never far away – and many cities are well positioned to thrive in the new digital economy. European cities like London, Paris and Amsterdam boast significant strengths in education, innovation, research and technology while the Asian powerhouses of Tokyo and Seoul are global research leaders with high levels of digital connectivity and the world’s highest number of international patent applications.
And there’s plenty of investment in their future. The ongoing Grand Paris redevelopment is one of the largest infrastructure projects in the world while in Asia, Seoul’s Pangyo Techno Valley and the development of new autonomous public transit systems in Tokyo are laying the groundwork for securing their place at the forefront of tomorrow’s global economy.
For all global cities – America included – staying ahead of the crowd requires a focus on agility, talent and technology, Kelly believes. “By investing in and leveraging their strengths in technology, physical and digital connectivity, quality of life and sustainability, cities can secure their future position on the global stage in the rapidly evolving competitive landscape,” he concludes.