Jakarta. New York and London remain the world’s most global cities, while select emerging-market cities led by Jakarta, Manila and Addis Ababa strengthened their ability to challenge global leaders in the next 10 to 20 years, according to this year’s Global Cities Index issued by management consulting firm A.T. Kearney.
The 2014 edition of the Global Cities Index also includes the Emerging Cities Outlook 2014, a forward-looking measurement of emerging cities with the potential to improve their global standing in the next few decades. Jakarta ranked first among 35 cities most likely to move up the rankings.
John Kurtz, A.T. Kearney’s head of Asia Pacific and president director of A.T. Kearney Indonesia, explained that “the study now confirms what so many Jakarta residents know; the city has its share of challenges but has become truly global in a variety of ways and is now attracting talent from both the Indonesian and global business and cultural communities. Recent leadership by Governor Joko Widodo and Deputy Governor Basuki Tjahaja Purnama has lent further credibility and optimism to the picture and it is very clear that Jakarta is on the rise.”
The Jakarta governor is running for president this year and polls suggest he will emerge victorious, being more popular than other serious contenders like the Great Indonesia Movement Party’s (Gerindra) Prabowo Subianto and the Golkar Party’s Aburizal Bakrie. Joko’s party, the Indonesian Democratic Party of Struggle (PDI-P), appears to have won Wednesday’s legislative election convincingly, although not by as big a margin as some expected.
The Global Cities Index, conducted every two years since 2008, measures global engagement for 84 cities on every continent, examining how globally engaged each city is across 26 metrics in five dimensions — business activity, human capital, information exchange, cultural experience and political engagement. This provides a holistic look at what differentiates cities in generating, attracting and retaining global capital, people and ideas.
Mike Hales, A.T. Kearney partner and study co-leader, said that “corporate executives use the information in the Global Cities Index to help them choose the most suitable locations for regional headquarters, research centers and operation hubs. City mayors and urban economic development planners will find insights to inform their improvement plans and investment decisions to better compete in the global economy and against other global cities.”
The Emerging Cities Outlook measures the likelihood that a city will improve its global standing over the next 10 to 20 years. It focuses on the leading indicators of business activity, human capital and innovation.
According to Andres Mendoza Pena, A.T. Kearney principal and co-author of the report, “as physical distances become less relevant and global competition intensifies, cities in low- and middle-income countries will increasingly jockey for position with one another and with cities in higher-income countries.”
Jakarta’s strong showing on the ECO signals that select cities in numerous countries throughout eastern Asia are laying solid groundwork to become global cities and eventually raise their ranking in the Global Cities Index.
Kurtz said that Jakarta was the most likely city worldwide to advance its global position, driven by significant increases across the leading indicators. In 2014, Jakarta showed the greatest improvement in information exchange. The city is an increasingly conducive setting for doing business, anchored by a high GDP growth rate. Human capital, especially in the health care evolution metric, presents a major opportunity for Jakarta to exploit, he said.
In order to capitalize on this potential, according to Kurtz, Jakarta must provide greater transparency in doing business, revamp the regulations in setting up businesses, and be more open to the new global business environment.
Tangible examples that would favorably impact Jakarta could include acceleration of MRT development, better public transportation to support workers to commute between Jakarta and satellite cities, development of the new port to increase throughput of export and import, as well as integration of the infrastructure with central business districts and industrial parks.
Jakarta would also need to improve the presence of international education, an aspect where it still lags behind other cities.
Consistent with previous editions of the Global Cities Index, New York, London, Paris and Tokyo lead the ranking. Among the top 20 cities, seven are in the Asia-Pacific region (Tokyo, Hong Kong, Beijing, Singapore, Seoul, Sydney and Shanghai), seven are in Europe (London, Paris, Brussels, Madrid, Vienna, Moscow and Berlin), and six are in the Americas (New York, Los Angeles, Chicago, Washington D.C., Toronto and Buenos Aires).