Oxford Economics unveils inaugural Global Cities Index, New York and London lead the pack

Oxford Economics released its first Global Cities Index on Tuesday, providing a comprehensive ranking of the world’s top urban economies based on the analysis of 1,000 cities across 27 critical indicators. New York, London, and San Jose, California, emerged at the top, reflecting their dominance in sectors such as economics and human capital.

The importance of cities in global economics is well-recognized, but comparing metropolitan areas across different countries and regions poses significant challenges due to variations in data collection and structural differences among cities.

In response, Oxford Economics — an independent economic advisory firm —has developed the Global Cities Index to offer a systematic approach to assessing the relative strengths and importance of cities worldwide. This tool is aimed at aiding businesses, academics, and policymakers in making well-informed decisions.

The index evaluates cities across five categories: Economics, Human Capital, Quality of Life, Environment, and Governance. Each category comprises four to six indicators designed to capture essential aspects within their domains. Thus, the Global Cities Index not only ranks cities by economic performance but also considers other crucial factors affecting their attractiveness to residents and investors.

Highlights from the index include strong showings from Australian cities, with Melbourne, Sydney, and Perth ranking in the top 25. However, apart from Tokyo, which secured the fourth spot, other Asian cities like Seoul and Singapore were positioned lower, at 41st and 42nd, respectively.

Singapore was noted for its strategic location on the Malacca Strait and its robust economy, boasting the highest GDP per capita among Asian cities in the index. Nevertheless, the city-state grapples with challenges such as slower employment growth and high housing costs, exacerbated by limited land availability. Its environmental score is impacted by poor air quality and restricted green spaces, although it scores well for low CO2 emissions intensity.

Mark Britton, director of city services at Oxford Economics, highlighted the index’s utility, stating, “Our Global Cities Index provides a consistent framework for assessing the strengths and weaknesses of the largest cities across the world, enabling organizations and policymakers to make more informed strategic decisions.”

Notably, New York, with the world’s largest economy, leads in the Economics category, while London excels in Human Capital due to its array of top universities and global corporate headquarters. Surprisingly, both cities scored low in the Quality of Life category, with New York and London ranked 278th and 292nd respectively. In contrast, Grenoble, France, topped the Quality of Life category, favored for its cultural richness and lower income inequality.

The index’s emphasis on economic factors likely influenced the strong performance of U.S. and European cities, offering a multi-dimensional perspective on urban economic health and livability.