San Francisco has this year secured the top spot in Schroders Global Cities Index, boosted by its world-leading venture capital industry. The Golden Gate City’s east coast counterpart, Boston, took second spot with London ranked third.
The elevation of San Francisco follows the introduction of a specific venture capital score to the Index. In short, the Innovation measurement, which previously assessed the strength of universities in a city, now also monitors the amount of venture funding directed to businesses in a specific location.
San Francisco as the heartland of technology innovation, and Boston, as a biomedical innovation centre, have seen their rankings improve as a result of this score being introduced.
Schroders’ Global Cities Index seeks to rank global cities across four key criteria: Economic, Environmental, Innovation and Transport. It also aims to identify the cities which combine economic dynamism with world-class universities, forward-thinking environmental policies and excellent transport infrastructure.
In addition to London’s top three ranking, the next best-placed UK city was Manchester in 28th.
Hugo Machin, Portfolio Manager, Schroders Global Cities, said:
“San Francisco’s rise to first place as well as the strong performance of a number of US West Coast cities such as Seattle and Los Angeles, may come as a surprise given the net migration towards the US’ ‘Sun Belt’ cities that has been widely reported. However, the introduction of a venture capital score has significantly boosted their positions.
“Today’s index shows that, despite the impact of the Pandemic and remote working, cities remain the economic drivers of the world economy. Their ability to provide collaborative spaces for work and deliver fantastic restaurants, theatre and retail experiences cannot be replicated online.
“In this context, cities will need to be armed with excellent transport links, affordable housing, green space and strong educational institutions to remain relevant. Furthermore, government policy will need to support the development of buildings that have excellent sustainability credentials.”
Risers and fallers
San Diego and Berlin were the only other two cities to have any meaningful movement in the top 30. Both scored well on venture capital funding and environmental policy.
Four Chinese Cities were also in the top 30, in spite of the well-documented lockdowns challenges. The index found that these cities’ strong Chinese universities and successful tech industries have sustained their rankings.
Indian and Indonesian cities also rose rapidly up the rankings. Cities such as Mumbai, Kuala Lumpur and Jakarta have benefited from an increased focus on technology and innovation, as well as highly-educated workforces.
