World or Global Cities

London sklyline
As a major financial “command and control” center, London is one of the world’s premier global cities. Photo by Tony Hisgett, Flickr.

Rise of the World City

The modern world is becoming increasingly globalized. Business takes place on a global scale every hour of every day. Globalization has created global cities. Life in a global city is markedly different from life in a rural town or village. Foods are imported from all over the globe, and sold by supermarkets owned and managed by conglomerates based in foreign countries. Local businesses are replaced by franchises of global corporations. Businesses of such a size require specialist support mechanisms in order to keep running efficiently. These support mechanisms include financial services, legal teams, and complicated transport systems all designed with the utmost efficiency in mind. Large, global businesses can garner myriad benefits by locating their headquarters and other, smaller branches alongside other large companies. Thus, over time, world cities (also known as global cities) emerge as “command and control centers”,  where clusters of multi-national corporate headquarters coordinate the financial and logistic operations that steer the world’s economy.

A Brief History of World Cities

The Scottish urban theorist Patrick Geddes (1915) is credited with coining the term ‘world city’; a moniker he gave large, economically important cities of the early 20th century where a significant amount of the world’s trade was taking place. Peter Hall (1966) further developed the concept, defining “world-citiness” in terms of political power and institutions, the presence of transportation hubs such as airports and seaports, financial activities, and cultural production. John Friedman (1986) identified 30 world cities based on a number of attributes including presence of MNC headquarters, manufacturing activity, population size, and transportation hubs. The phrase ‘global city’ was further popularized in 1991 by Saskia Sassen, Professor of Sociology at the University of Chicago, in her book; ‘The Global City’. In 2002 she argued for the primacy of MNC headquarters — particularly among those companies that offer advanced producer services — as the definitive measure of world city status.

Friedmann's world city network.
World city network as defined by Friedmann (1995). “Core” cities were those in more developed regions, particularly the U.S., Europe, and East Asia.

Popular World/Global City Indices

The factors that corporations look at when deciding where to keep their headquarters and other offices are broadly similar to the indicators that groups like the World Bank, the Globalization and World Cities Research Network (GaWC), and the Global Economic Power Index use when building their tables of Global City Rankings. There are, of course, other factors besides business that come into consideration. Each list builder uses a distinct series of indicators, but some other common factors outside of the business realm include ratings of educational institutions, innovation in culture (music, art, theatre) and quality of scientific research facilities.

GaWC alpha world city list
List of Alpha world cities according to GaWC, 2016.

AT Kearney constructs the Global Cities Index every year. This league table examines the performance of cities according to 27 different metrics within the categories of ‘business activity’, ‘human capital’, ‘information exchange’, ‘cultural experience’, and ‘political engagement’. This allows for comparison between the largest and most influential cities in the world. AT Kearney also produces the Global Cities Outlook; a unique way to evaluate the future potential of a global city. These reports provide insight into which cities will be the most prominent on the global stage in future years. At the time of writing, the 2017 list is the most recent. The AT Kearney Global Cities Index (top 10) ranks cities as such; New York, London, Paris, Tokyo, Hong Kong, Singapore, Chicago, Los Angeles, Beijing, Washington D.C.

Another of the most prolific ranking systems is produced by the Globalization and World Cities Research Network (GaWC). Cities are ranked as either Alpha, Beta, Gamma, High Sufficiency and Sufficiency. Cities are then subcategorized using + or -. For example, the two highest ranked cities (London and New York) are given the ranking of Alpha++, whereas Rio de Janeiro and Panama City are given the ranking Beta-. High sufficiency refers to cities which are easily self-sufficient and are not dependent on other larger, global cities. Sufficiency level cities are just about self-sufficient.

At the time of writing, the 2016 GaWC study is the most recent, and ranks around 250 cities from all over the world. Factors which the GaWC study takes into account include; international financial services (insurance, real estate, banking, accountancy, and marketing), headquarters of multinational corporations, the existence of financial headquarters/a stock exchange/other major financial institutions, and many more. According to the GaWC study 2016, the top ten ranking global cities are as follows; London, New York, Singapore, Hong Kong, Paris, Beijing, Tokyo, Dubai, Shanghai, Sydney.

Map of alpha world cities in 2008 according to GaWC.

The Institute for Urban Strategies at the More Memorial Foundation in Tokyo, Japan also produces a ranking system, known as the Global Power City Index (GPCI). Key metrics used in the GPCI are focused towards showing the ‘magnetism’ of the city; ‘their comprehensive power which allows them to attract creative individuals and business enterprises from every continent, and to mobilize their assets in securing economic, social, and environmental development’. Another key difference between this survey and others is that the GPCI examines cities in terms of functions demanded by specific societal roles; Manager, Researcher, Artist, Visitor, and Resident. The overall categories are listed as ‘Economy’, ‘Research and Development’, ‘Cultural Interaction’, ‘Liveability’, ‘Environment’, and ‘Accessibility’. In the 2016 rankings, the Japanese system produced the following top 10 global cities (in order); London, New York, Tokyo, Paris, Singapore, Seoul, Hong Kong, Amsterdam, Berlin, Vienna.

One important factor to note when studying the various metrics used by the different surveys is that many of the metrics are ‘static’ i.e total population, total GDP. This gives a good idea of the largest and wealthiest cities, but fails to recognize emerging cities (with the exception being the  AT Kearney Global Cities Outlook). Emerging cities are better recognised through metrics such as ‘percent GDP increase’ and ‘percent population increase’. Additionally, few organizations have considered flows (i.e., capital, information, people) rather than attributes.

World Cities as Nodes in a Global Network

Beaverstock et al. (2000) published a simple method to rank world cities based on the shared presence of multi-national corporations. Using this method, they found that London, New York and Tokyo dominated the North American, European, and East Asian regions, respectively. These three cities are often considered the “global triad” of global/world cities. New York cast a particularly long shadow over North America, dominating other world cities in the region such as Los Angeles and Chicago. London also dominated the European arena but not to the same extent as New York, and Tokyo shared power with Singapore and Hong Kong in Eastern Asia.

 Beaverstock et al. 2000 world city linkages.
Strong links between Alpha world cities denoted here by a > 95% chance of sharing a corporate firm office. Source: Beaverstock et al. 2000. LN = London, NY = New York, TK = Tokyo, etc.

Other noteworthy organizations producing global city rankings include The Economist Group’s the ‘Global City Competitiveness Index’, Knight Frank LLP & Citi Bank’s ‘The Wealth Report’, and Foreign Policy’s ‘Global Cities Index’. Ranking systems can have a significant effect on the amount of investment a city gains from corporations maintaining offices within it. Therefore, it can be seen that as global ranking systems gain in popular use, governments of major cities are incentivized to appease the specific metrics used in each ranking system, so that they might continue to drive investment toward their various cities. This can be seen as somewhat of a positive externality of global city rankings. However, there are two sides to every coin, and of course there are associated negative externalities to consider. Emerging market cities, for example, fail to benefit from the use of static metrics used in (most) studies. Therefore, it can be said that global city rankings serve only ‘legacy’ cities, and emerging market cities lose out on investment opportunities because of this. Finally, while global ranking systems give a good overall picture of a city, they are also very generalized. For an individual business looking to invest in a location, specific metrics in the field of the individual business are much more important than the general outlook provided by global city rankings.

Sources:

Beaverstock JV, Smith RG & Taylor PJ (2000) “World city network: a new metageography”, Annals of the Association of American Geographers 90 (1), 123-134

Friedmann J (1995) “The world city hypothesis”, in Knox PL & Taylor PJ eds. World Cities in a World System. Cambridge University Press, pages 317-331.

Sassen S (1991) The Global City: New York , London , Tokyo , Princeton University Press, Princeton

Sassen S ed. (2002) Global Networks-Linked Cities, Routledge, London

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