The Big Apple has taken a bite out of Silicon Valley to become the world’s top tech city, according to a new index.
Savills Tech Cities in Motion 2019 ranks 30 cities by six categories: Business Environment, Tech Environment, City Buzz & Wellness, Talent Pool, Real Estate Costs and Mobility.
New York performs particularly well on the Business Environment category, whose markers include the level of investment, R&D and innovation, and ease of starting of a businesses. Twice as many (2.4 million) people are employed in finance and business services, compared to the global tech cities average.
The report says: “Access to a deep talent pool and the city’s reputation as a global centre of commerce makes New York the global leader. It is no coincidence that Amazon recently selected New York’s Long Island City as a location for its second headquarters… Venture capital investment volumes have topped those of San Francisco for the last three years.”
VC investment hotspots, tech cities are outperforming other global centres. GDP in the Savills’ 30 is set to rise by 36% in the next decade, compared to just 19% across other developed cities.
London comes third in the index – performing well in the Buzz & Wellness and Mobility categories, for walkability and its smart, integrated public transport system – and with three times more VC investment in 2018 than its closest European rival, Paris.
In its white paper, Agile Cities: Preparing for the Fourth Industrial Revolution, the World Economic Forum’s Global Future Council on Cities and Urbanization notes that more than half of the global population (54%) already live in cities. That figure will rise to an estimated 68% by 2050.
“The Fourth Industrial Revolution is changing the way in which these cities provide services to their residents. After years of building up both infrastructure and processes, cities must now break down siloes and invite innovation in order to fully benefit from the opportunities and meet the changes facing their populations,” the report says.
Tech and innovation in city architecture and infrastructure go hand in hand – and nowhere is this more apparent than in China, which is building 19 “supercity clusters”, and which features prominently in the Savills index.
China’s tech rise
Led by tech giants Baidu, Alibaba and Tencent, China’s tech cities are growing fast. In the third edition of the index, five Chinese cities make the ranking for the first time – and the six Chinese cities ranked account for a higher share of VC investment that their US counterparts.
The report says: “Beijing sees by the far the greatest VC investment, an average of $34 billion per annum in the last three years, with volumes higher even than New York and San Francisco.”
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Shanghai ranks highest of the Chinese tech cities, at 15, thanks to its international business environment and quality of life, with Beijing at 17, Hong Kong at 20, start-up hub Shenzhen at 24, Hangzhou at 25 and Chengdu at 26.
China also performs highly in the Mobility category, as leaders in shared mobility services – an important factor in city growth, given that the metro areas of the tech cities are already home to 291 million people and will grow by another 18 million in the next decade.
The report says: “Many of the dockless bikeshare schemes now found in cities across the world (such as Mobike) originated in China. Hangzhou is home to more shared bikes than in any other city globally. Numbers here topped 800,000 before they had to be culled to manage congestion.”
Chengdu and Hangzhou also come in the top five cities in the Real Estate Costs category, with cost of mainstream residential rent at $140 and $190 per week, respectively, compared to the average of $350.
Coworking, linked to the growth of the tech sector, is on the rise and there’s been an expansion in coworking space. China here, again, scores well for cost: renting a desk in a private office was $270 and $290 per month in Chengdu and Hangzhou, compared to the average of $590 and $1,050 in San Francisco.