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How Smart Are the Wealthiest Cities? Uncovering Regional Strengths

Dr. José Caballero

Dr. José Caballero

Dr. José Caballero is Senior Economist at the IMD World Competitiveness Center in Lausanne, Switzerland.

Quality of life is a fundamental driver of global mobility, and for business executives, high living standards and effective institutions are significant drawcards.[1] This edition of the Henley Global Citizens Report identifies the world’s wealthiest cities and also introduces the top 5 cities with the most millionaires in each region. Viewing these cities and regions through the lens of the 2021 IMD-SUTD Smart City Index (SCI) data while focusing on pertinent aspects of quality of life such as governance, inclusiveness, talent development, entrepreneurship, public safety, healthcare, the environment, and cultural and leisure activities, provides fascinating insights into where they are succeeding, and what could be  drawing investors to congregate in certain metropolises.

A snapshot of the regional top 5 cities for millionaires in terms of their ‘smartness’

A smart city is one that uses information technology to improve the quality and number of goods and services it offers, ultimately enhancing the quality of life of its inhabitants. The SCI captures the perceptions of residents of 118 cities about aspects of the services and technologies that are available to them.[2]

Using the 2021 SCI data, the top 5 cities with the mostmillionaires[3] in each region were grouped   to obtain ‘regional’ average scores in several aspects that contribute to the quality of life of their citizens (see Table 1). It is unwarranted to make comparisons between regions because of the socio-economic, political, and cultural differences among cities. Furthermore, the intention was not to present a comprehensive set of indicators to assess the different regions. Instead, an indicative set of criteria is introduced to trace the strengths of each region. 

Asian male startup entrepreneur in office on a call

To do this, the original SCI data was regrouped into different categories such as inclusiveness, talent development, and entrepreneurship. This provides a snapshot of the characteristics of each region, enabling us to identify their relative strengths. A strength is an indicator in which a region performs better in relation to other indicators in a particular category. To be clear, if a certain region shows strength in a given indicator, this does not mean that other regions perform poorly in the same indicator.

Regional roundup

Table 1 presents the different categories of indicators that impact the quality of life. It shows the average regional percentage of survey participants who responded positively with respect to the theme captured by each of the indicators grouped into those categories. For example, for the first indicator in the governance category, 77% of respondents in the Middle East’s top 5 wealthiest cities felt that information on local government decisions was easily accessible.

Table 1. Quality of life categories and indicators from the SCI, by region (2021)

Governance

Information on local government decisions is easily accessible

51%

65%

69%

66%

77%

Corruption of city officials is not an issue of concern

17%

37%

51%

53%

58%

Online public access to city finances has reduced corruption

32%

45%

55%

44%

62%

Availability of online information has increased your trust in authorities

64%

55%

71%

59%

82%

Inclusiveness and participatory

Minorities feel welcome

50%

62%

64%

57%

68%

Residents contribute to decision making of local government

30%

54%

56%

57%

56%

Residents provide feedback on local government projects

40%

60%

63%

60%

63%

An online platform where residents can propose ideas has improved city life

43%

52%

62%

49%

67%

Talent development

Most children have access to a good school

41%

54%

73%

73%

74%

Local institutions provide lifelong learning opportunities

43%

61%

69%

67%

69%

IT skills are taught well in schools

52%

52%

66%

59%

70%

Entrepreneurship

Businesses are creating new jobs

54%

66%

67%

56%

67%

Online services provided by the city have made it easier to start a new business

57%

54%

65%

51%

71%

Public safety

Public safety is not a problem

30%

35%

66%

56%

63%

CCTV cameras have made residents feel safer

54%

52%

71%

53%

75%

Healthcare

Medical services provision is satisfactory

45%

61%

76%

72%

81%

Arranging medical appointments online has improved access

56%

65%

77%

63%

83%

Environment

Recycling services are satisfactory

45%

64%

71%

71%

75%

Air pollution is not a problem

23%

36%

47%

40%

48%

Activities

Green spaces are satisfactory

48%

64%

67%

74%

69%

Cultural activities (shows, bars, museums) are satisfactory

70%

76%

76%

80%

80%

Online purchasing of tickets to shows and museums has made it easier to attend

74%

75%

81%

77%

83%

Source: IMD-SUTD (2021). Smart City Index 2021: A tool for action, an instrument for better lives for all citizens

One indicator where all regions perform well is providing cultural activities. Beyond this, Africa’s key strengths are in using technology to grant access to information which boosts trust in authorities, to facilitate opening businesses via online services, and to improve medical services. 

The Americas achieve greater success in providing access to information regarding government decisions, creating jobs, and using technology to enhance access to health services. 

Asia Pacific performs well in ensuring children’s access to good schools, providing adequate medical services, and using technology to facilitate access to those services. 

Similarly, Europe’s strengths are in providing robust education and satisfactory medical services, and in the availability of green areas for recreation. 

Finally, the Middle East’s strengths lie in using technology to increase accessibility to information and thus increase trust in government officials, providing effective medical services, and utilizing technology to improve access to health-related services. 

Such strengths underline the weaker performance of all regions in the inclusiveness and participatory, public safety, and environment categories.

In the following sections we take a closer look at each category, highlighting some of the best-performing wealthiest cities.

Governance

In the governance category, accessibility to information about local government decisions is a strength for the Americas and Europe. Drilling down to a city level (not shown in Table 1, but available here),[4] Geneva and Los Angeles do particularly well, with 72% and 70% of their residents, respectively, considering such accessibility to have a positive effect. 

Africa, Asia Pacific, and the Middle East perform strongest in the availability of online information as a driver for trust in authorities. Here, Abu Dhabi performs extremely well (90%). Corruption of officials seems to be a concern across the regions to varying degrees, with Dubai’s citizens perceiving it to be a concern the least (74%) out of all the top 5 cities per region.

Inclusiveness and participatory

In this category, the strength of all regions, apart from Europe, lies in minorities feeling welcome. At a city level, Abu Dhabi leads the way (80%). Europe’s strength is in its residents’ ability to provide feedback about governmental projects, with Zurich (74%) ahead in the region.

Talent development

Talent development, and particularly the early stages of the process (namely, children’s access to quality schools), is a strength in Asia Pacific, Europe, and the Middle East. Looking at the cities, while Singapore (82%) leads its region in this indicator, Zurich (86%) does the same in Europe, with Geneva (84%) also performing strongly, and Abu Dhabi and Riyadh (both 78%) leading in the Middle East. The Americas’ strength is in providing continuous training opportunities, and Africa’s is in teaching IT skills. While New York (63%) leads the former region, Nairobi (59%) tops the latter.

Entrepreneurship

Job creation is the forte of the Americas, Asia Pacific, and Europe in the entrepreneurship category. In terms of high-performing cities, Los Angeles (68%), Beijing (80%), and Zurich (70%) lead their respective regions. Residents of the top cities in Africa and the Middle East rely on online services to reduce constraints to start a business. Here Cairo (61%) leads the African cities and Dubai (78%) tops the Middle East.

Public safety

In public safety, all regions bar Europe perform less well when it comes to perceiving safety as a problem. 77% of Zurich’s residents do not perceive public safety as an issue, leading the Swiss capital to top the others in this indicator. In this category, the other regions perform better in the use of technology to make residents feel safer, and Cairo (69%), New York (60%), Beijing (80%), and Abu Dhabi (86%) lead their respective regions. 

Healthcare

The adequacy of health services’ provision is Europe’s strength in this category, and the region is led by Zurich (87%). The other regions perform better in the use of technology to improve healthcare services: Africa is led by Cairo (69%), while New York (68%), Beijing (89%), and Abu Dhabi (85%) top their regions. 

Environment

Under the environment category, all regions’ strength is in the adequacy of recycling services. In the latter indicator, Cape Town (55%), New York City (66%), Shanghai (78%), Zurich (87%), and Abu Dhabi (84%) are the best-performing cities. To different degrees, air pollution is perceived as a problem across all regions. However, Dubai (62%) and Singapore and Abu Dhabi (both 61%) are worth highlighting in regard to their citizens not perceiving pollution as a problem. 

Activities

In the availability of green spaces, Europe performs extremely well with Geneva (83%) leading the way overall. With respect to offering cultural activities, all regions achieve a high percentage of approval from their citizens. In terms of cities, Lagos (74%), San Francisco (78%), Sydney (75%), London (79%), and Tel Aviv (81%), all perform strongly in their respective regions. In terms of the use of technology to facilitate access to cultural activities, all regions obtain a high percentage of positive responses. Here Cape Town (79%), New York (79%), Beijing (91%), Geneva (79%), and Abu Dhabi (87%), outperform their regional peers in such use of technology.

Footnotes:

[1] Ben-Hur, S., Bris, A., Caballero, J., & Pistis, M. (2019). The drivers of the international mobility of managers and executives: evidence from OECD countries. IMD Working Paper.

[2] For definitional and methodological matters see IMD-SUTD (2021). Smart City Index 2021: A tool for action, an instrument for better lives for all citizens. Lausanne: IMD. Available from https://www.imd.org/smart-city-observatory/home/

[3] The SDI sample does not include Doha, Frankfurt, Houston, and Johannesburg, which are part of the top 5 cities in their respective regions. 

[4] References to percentages in the text are to the percentage of citizens of a city who responded positively to the particular question under consideration. All percentages have been rounded. City-level data available from https://www.imd.org/smart-city-observatory/home/

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