The Global Cities That Power the World Economy Now
The latest numbers from the Brookings Institution are a reminder that inequality has a geographic dimension.
It’s often said that cities and metros power both national economies and the world economy. But which ones play the most dynamic roles, and which the least?
The Brookings Institution’s Global MetroMonitor is a great place to start. Developed by researchers at Brookings’ Metropolitan Policy Program with data from Oxford Economics, Moody’s Analytics and the U.S. Census Bureau, the fourth annual edition, provides detailed data on economic activity for 300 metros worldwide. These 300 metros accounted for nearly half (47 percent) of all global economic output in 2014 and nearly 40 percent of global economic growth, while housing just 20 percent of the global population.
(A note: The report lacks numbers on some of the poorest metros in the world, particularly those in sub-Saharan Africa, because of the small size of these cities and the limited data available on them).
The table below from the report shows the gap between the richest and poorest metros in the world based on per capita economic output or GDP for 2014. The gap between the richest—Zurich, Switzerland, which generates $82,410 per person—and the poorest—Kolkata, India, which produces $1,110 per person—is staggering. Of the 20 richest metros, all but two of them are in North America or Europe and average just over $69,300 in economic output per person. The poorest 20, all in developing nations in Asia, the Middle East, Africa and Latin America, average just over $4,100 in GPD per capita. The richest places include Oslo, Geneva, Paris, Munich, Dublin and Luxembourg-Trier in Western Europe; and San Jose and San Francisco in the Bay Area, Hartford and Bridgeport, Connecticut, Boston, D.C., Seattle, New York, Calgary, Portland and Houston in North America.
The second and third tables below shows the fastest and slowest growing global metros based on two metrics: the annual percentage change in real GDP per capita and the annual percent change in employment.
The pattern among fastest growing metros is nearly the opposite of the first table, with the metros with the speediest rates of growth virtually all in the rapidly urbanizing and developing parts of Asia and Eastern Europe. The places with slowest growth, meanwhile, are mainly older de-industrializing centers in Europe and North America, though there are several metros in Asia and Latin America on the slow growing list.
Metros in rapidly urbanising nations saw their economic output expand by 4.0 percent and employment grow by 1.7 percent in 2014, while metros in the advanced nations saw more modest 0.8 percent growth in GDP and 1.3 percent growth in employment.
Macau tops the list of the world’s fastest growing metros. It’s a unique case: a special administrative region in a small economy with lots of casinos. The developing urban centers in the Asia-Pacific region dominate the list, with 21 metros in the top 30. London is the only Western European city among the 30 fastest growing metros.
The slowest growing metro in 2014 was Thailand’s Bangkok. But the majority of the slowest growing metros were in the older industrial metros of the United States and Europe. Seven American metros number among the 30 slowest growing, including Allentown, Columbus, Dayton, Syracuse, Albuquerque, and, perhaps surprisingly, Washington, D.C, as well as 12 Western European metros, including Rome, Milan, Turin and Naples. There were five in Latin America, including Sao Paolo and Buenos Aires.
Across the globe, metro economies tend to be outperforming their national economies—something I noted when Brookings released its report last year as well. In fact, the report finds that one-third of the world’s 300 largest metropolitan economies grew faster than their national economies in both GDP and employment growth. The maps below show the trend: The blue dots represent metros that are growing faster than their host nations in both GDP per capita and employment, while the red dots are metro areas growing slower than their host nations on either or both of these two metrics. The size of the dots reflects the size of the metro economies themselves.
The developing Asia-Pacific region leads the world in number of metros ahead of their nations with 29, followed by North America with 27 and Western Europe with 17.
Metro economies clearly power the world economy. But the level of economic development varies widely across cities and metropolitan areas. Metros in the United States and Europe have much higher levels of economic output per capita, though some metros in the developing nations are experiencing faster rates of growth. The world remains spiky [PDF] and inequality has a geographic as well as an economic dimension.
This article originally appeared in CityLab.