Although size and critical mass really do matter where cities’ ability to withstand stress is concerned strengths in other emerging areas, notably ESG, are apparently fortifying a number of smaller cities.
Savills has just published its Resilient Cities Index 2021 and New York, Los Angeles, London, Tokyo and San Francisco were revealed to be the top five most resilient cities in the world, according to the firm’s tests.
They have deep and liquid real estate markets, meaning they are unlikely to be undermined swiftly by change, the firm said.
Savills explained that 500 cities were assessed as part of its 2021 Impacts programme. Metrics centred around four core themes – economic fundamentals, knowledge economy and technology, ESG, and real estate.
“These metrics determine which cities have remained resilient in the face of Covid-19 and which cities will continue to evolve to face new market and natural forces,” the firm said in a statement.
The top five cities continue to harness their power as gateway locations, Savills said. They benefit from a virtuous circle. Large companies are attracted to them, their business ecosystems and large talent bases. That attracts still more talent and fuels strong economic performance and robust real estate markets.
Smaller European cities including Stockholm and Amsterdam make the top 20
Although New York, Los Angeles and London are at the top of the rankings, with Tokyo, San Francisco, Paris, Seoul and Boston following, several smaller European cities with populations under three million make it into the top 20. Stockholm is in 12th position and Amsterdam is 17th.
Savills said these cities tend to score highly owing to strong ESG credentials and knowledge economies, well-educated populations and developed tech scenes.
Savills Resilient Cities Index rates cities using national ESG factors because city-level data is scarce. Thus the Nordic cities top this metric, because they score highly for use of renewables, food and water security, natural resources and electric vehicles. Cities in New Zealand and Canada, the only non-European nations in the top 10 for ESG, also score well.
“Our first Savills Resilient Cities Index in 2019 looked at city GDP, private wealth and demographics, but to reflect changing times we’ve added many other metrics in 2021, including ESG,” said Sophie Chick, Savills World Research. “While this hasn’t dramatically altered the top of the Index – New York, Tokyo, London, and Los Angeles all featured highly then as they do now – what’s interesting is that smaller cities are evolving and their strong knowledge economies, talent bases and ESG credentials are allowing them to catch up.
“These smaller cities should continue to rise, alongside locations in China and India, which will climb as they become wealthier and improve their environments to compete more evenly with global megacities.”
Chick said that others to watch include Denver, Houston, Phoenix and Philadelphia in the US, Copenhagen, Denmark, Zurich, Switzerland, in Europe, Melbourne and Sydney in Australia and Auckland in New Zealand.