Industries in Depth

These are Asia's cities to watch

People look at the skyline of the central business district from the Skybridge of The Pinnacles at Duxton public housing estate in Singapore April 25, 2013. Banks in Singapore are urgently scrutinising their account holders as an imminent deadline on stricter tax evasion measures forces them to decide whether to send some of their wealthiest clients packing. The Southeast Asian city-state has grown into the world's fourth-biggest offshore financial centre but, with U.S. and European regulators on the hunt for tax cheats, the government is clamping down to forestall the kind of onslaught from foreign authorities that is now hitting Switzerland's banks. Before July 1, all financial institutions in Singapore must identify accounts they strongly suspect hold proceeds of fraudulent or wilful tax evasion and, where necessary, close them. After that, handling the proceeds of tax crimes will be a criminal offence under changes to the city-state's anti-money laundering law. Picture taken April 25, 2013. REUTERS/Edgar Su (SINGAPORE - Tags: CITYSCAPE BUSINESS)

These are the cities in Asia that developing quickly due to growing innovation. Image: REUTERS/Edgar Su

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At the heart of every emerging economy are the dynamic cities powering their rapid development.

Across Asia, many of these enterprising cities have become home to large clusters of business services, engineering, finance and retail firms, along with strong creative industries.

From Bangalore in India to Shenzhen in China, they’re held in high regard domestically and are now turning their attention to building their profile on the international stage to draw in the companies and talent who will drive their future growth.

Jeremy Kelly, Director of Global Research at JLL, says: “Increasingly, cities in emerging economies are becoming key hubs in global networks of innovation – referred to as ‘Enterprisers’. This group of business and enterprise hubs are major places of opportunity and magnets to workers from their nation and the wider region. Usually specialized in higher-value activities, as well as manufacturing, they are among the largest cities in their national economy and have exploited their business climate advantages in recent years.”

JLL Typology of World Cities 2018 Image: JLL

As such, they’ve been among the world’s most dynamic real estate markets in recent years and are increasingly on the radar of international real estate investors.

Yet despite their rapid growth, the Enterprisers are also facing a unique set of challenges as they aim to boost productivity and innovation to take their economies to the next level, whether ensuring a strong local talent pipeline, making their land usage more efficient or strengthening their city brand and successfully projecting it to the wider world.

So which Asian cities make the cut to join the ‘Enterprisers’ group and where do their opportunities lie?

Image: JLL

Bangalore, India: India’s pre-eminent IT hub, Bangalore is more than just a major outsourcing location for multi-national firms. It is home to the research and development facilities for a growing number of global companies, including Google (its first R&D center outside the U.S.), Uber, Amazon and IBM and also boasts a range of tech ‘unicorns’ and start-ups, such as Ola, BigBasket, Flipkart, Mu Sigma and InMobi. The city has a ready stream of talent with several universities with a strong focus on engineering while the presence of so many big-name corporates helps to pull in workers from across the country. Companies, too, are keen for a foothold in the city – as such, it has one of the world’s highest absorption rates of commercial office space. Yet Bangalore is not without its issues; it’s facing environmental pressures and rampant unplanned urbanization as its population soars.

Image: JLL

Shenzhen, China: Commonly referred to as ‘China’s Silicon Valley’, Shenzhen has grown rapidly since it was designated as China’s first Special Economic Zone (SEZ) in 1980, with a population of around 12 million today. It now plays host to some of the country’s largest and most innovative tech companies, including internet giant Tencent and hardware firms Huawei and ZTE, not to mention the world’s first and largest hardware accelerator, HAX. In addition, it boasts a number of tech unicorns including DJI (drone manufacturer), UBtech Robotics and Royole. As a result, the city sees the third highest number of patent applications of any city in the world. Despite its lack of established higher education establishments, the city is a magnet for tech talent from across China. As China’s capabilities grow, Shenzhen is likely to be at the center of this.

Image: JLL

Taipei, Taiwan: Taipei and its surrounding area is a well-established base for manufacturing, home to a number of key companies specializing in electronics engineering, IT and precision instruments manufacturing, including Foxconn, Acer and Asus. Yet it’s now looking to broaden its horizons to better compete with its growing Asian rivals. It has developed a strong creative industries scene and was named the 2016 World Design Capital.The city is benefitting from long-term government initiatives that aim to boost entrepreneurialism and grow start-ups, commercialize university research and drive the shift from hardware to software. Its strong education system further supports its ambitions with a particular focus on engineering talent.

Image: JLL

Guangzhou, China: Another Chinese heavyweight, Guangzhou forms part of the Pearl River Delta mega city-region, alongside Shenzhen and Hong Kong. The city is known as a trading center, home to the Canton Fair and one of the world’s largest convention centres, and also boasts strong international links through its port and airport facilities. It’s also overhauling its image as it tries to leave its manufacturing past behind and reposition itself as a hub of scientific innovation with a particular focus on IT, bio-medicine new materials and high-end equipment, new energy vehicles, and energy conservation and environmental protection. Less than three years after the Pazhou Internet Innovation Cluster opened for business it has attracted 17 tech giants, including Alibaba, Tencent and Xiaomi, who have collectively invested 63 billion yuan in building regional headquarters. Yet despite its efforts, questions still remain as to whether it can successfully compete with the likes of Shenzhen and Hangzhou in the future.

Image: JLL

Ho Chi Minh City, Vietnam: Rapidly building a reputation as one of Southeast Asia’s powerhouses, Ho Chi Minh City is pulling in increasing amounts of investment from large multi-national technology, including Microsoft, LG, Intel and most notably Samsung. It’s also the base for Vietnam’s only tech unicorn – VNG Corporation. The city itself is undergoing rapid real estate development amid increasing demand for office, retail and hotel space, with a new metro system also under construction. The country’s tallest building, the Vincom Landmark 81 is due to open later this year, while Thiem New Urban Area, a 657 hectare site east of Saigon River, is earmarked to be the new central financial district. Ho Chi Minh is also in a prime position to benefit from wider national growth; Vietnam is one of the world’s fastest-growing countries, with a large, youthful and increasingly educated workforce to meet its future talent needs.

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Image: JLL

Kuala Lumpur, Malaysia: Considered to be Southeast Asia’s rising hub for talent, Kuala Lumpur has come a long way from its tin mining days in the 1850s. Nowadays the Malaysian capital offers a broad range of companies including BMW, Motorola, HSBC and PayPal a compelling mix of skilled labor, a good standard of spoken English and high productivity levels at lower costs than other cities in the region such as Singapore or Hong Kong. More widely, the country ranks strongly for its business operating environment in indices such as the World Bank’s Ease of Doing Business. Kuala Lumpur is also rated as one Southeast Asia’s most liveable cities and is both geographically and economically well placed to benefit from broader growth across the region.

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