In this article, we will be analyzing the emerging trend of globalization and its significance for some of the global cities across the world. If you wish to skip our detailed analysis, you can move directly to the 5 Most Globalized Cities in the World.
Globalization: A Trend for the Future
As the world transforms into a global village, it closely intertwines the world’s economies. Globalization is a force that results in the movement of capital, commodities, people, and ideas around the world. While nations continue to become increasingly integrated, cities are also subject to globalization. A significant world population resides in these cities which have a rather old history of being a center for people to interact and exchange knowledge and ideas. Thus, globalization is for the good and here to stay.
How is Globalization Impacting Urban Settlements?
The influence of globalization on urban areas is profound. In an attempt to attract more global capital, cities undergo urban development. Substantial developments in infrastructure for transport, extensive international transactions, expansion of multinational corporations, and better quality of life have all been incorporated in some of the top metropolitan areas, making them connect with a global world. In April 2023, the United Nations reported that 80% of the global GDP is generated in cities. This depicts the economic significance of such settlements.
A prime example of an emerging global city is New York. The city is a center of commerce and culture. The quality of life in the city is commendable. In April 2023, the New York Mayor’s Office reported its strategic plan for sustainability. The city plans to reduce the carbon footprint of the construction industry by 2033, reduce sewer overflows by more than 4 billion gallons per year by 2045 and build better and accessible public transit. Better jobs, wages, and energy efficient infrastructures are being offered in New York, making the city one of the globally acclaimed centers.
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Companies around the world expand internationally to cater to local needs. Several multinationals have successfully positioned themselves in some of the most advanced global cities after sensing extensive growth opportunities. Tesla, Inc. (NASDAQ:TSLA), Walmart Inc. (NYSE:WMT) and JPMorgan Chase & Co. (NYSE:JPM) are among some of the prominent multinational companies that have been pursuing business opportunities in some of the world’s most global cities.
Berlin holds a strategic position in Europe which makes it ideal for multinational companies to access the European market. It is the largest city in Germany, area and population wise. Many high-tech firms, startup companies, media and research corporations operate in the city. It also attracts investments being the capital of Germany’s significant economy. On July 19, Reuters reported that Tesla, Inc. (NASDAQ:TSLA) has been seeking approval to make several additions to its Berlin plant by early 2024, in an attempt to increase its battery production capacity to compete against the regional EV market leader, Volkswagen. These additions include a material storage facility, an extended water recycling facility, a new 700-by-700-meter production space and an increased workforce.
Shenzhen, a gateway to China, is an advanced global city. It is assumed to be foreign friendly thereby attracting much foreign investment. It provides a thriving environment for businesses to operate. Thus, it is a home to China’s leading corporations. The infrastructure for research and development is strong in the city which contributes to it being an innovation hub. The city attracts many international companies as well. On July 25, the Authority of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone reported that Walmart Inc.’s (NYSE:WMT) U.S. warehouse chain Sam’s Club has opened its new flagship store in the city. This was a major investment from the company following its plans to expand into the Chinese market by opening several stores every year. The new store has also uplifted the commercial standing of Shenzhen in a global context.
Another prominent global city is Frankfurt. The city backs up Germany’s economy which is one of the greatest in Europe. It is therefore a home to many global financial institutions such as the European Central Bank and Frankfurt Stock Exchange. Another example of a well known financial institution is JPMorgan Chase & Co. (NYSE:JPM). The company provides wealth planning and investing services to fulfill the financial needs of clients thereby serving 30 countries across Europe, the Middle East, and Africa. The company has also become one of the largest advisory banks in Germany. On July 21, Reuters reported that the company has been looking forward to leveraging its market position in Europe. The city of Frankfurt operates as a financial center for the company. Thus, the company has expanded its operations in Frankfurt to compete with domestic German banks.
Tesla, Inc. (NASDAQ:TSLA), Walmart Inc. (NYSE:WMT) and JPMorgan Chase & Co. (NYSE:JPM) continue to enhance their market shares in their respective industries by expanding their operations across the globe. With that in mind, let’s take a look at the 15 most globalized cities in the world.
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Methodology
In order to create a list of the 15 most globalized cities in the world, we sourced data from Kearney Global Cities Report 2022. This report defines global cities as metropolitan areas that are connected with the international world and hence get impacted by the dynamic global environment. This report calculates an index for every city measuring how global a city is, based on five dimensions. These dimensions include business activity, human capital, information exchange, cultural experience, and political engagement. Thus, this index shows the extent to which a global city can attract, retain and generate global flows of capital, ideas and people. The metric we have chosen to find the most global cities in the world is the positive change in rankings for the cities. This metric reflects the growth in city globalization from 2021 to 2022. For cities having the same positive yearly change in rankings, the one with the higher rank in 2022 was preferred. Thus, the cities with the highest positive change in yearly rankings have been ranked as the most global cities in the world.
15 Most Globalized Cities in the World
15. Guangzhou
Annual Positive Change in Ranking: +8
Located in China, Guangzhou is one of the most globalized cities in the world. It is a leading financial hub in Asia and a trading port for the country. There is a massive presence of global brands in the city as well.
14. Frankfurt
Annual Positive Change in Ranking: +8
Many global and European corporate headquarters operate in the city of Frankfurt. The city is a center for commerce, tourism, and transportation, making it one of the top globalized cities in the world.
Tesla, Inc. (NASDAQ:TSLA), Walmart Inc. (NYSE:WMT) and JPMorgan Chase & Co. (NYSE:JPM) are among the progressive firms expanding their markets worldwide.
13. Luxembourg
Annual Positive Change in Ranking: +8
Luxembourg is another globalized city based in Europe. The city has a high GDP per capita and a high standard of living as well. Its strategic position in Europe also makes it attractive for trade and commerce.
12. Dusseldorf
Annual Positive Change in Ranking: +9
Dusseldorf makes it to the list of the top 15 globalized cities in the world as well. It is an attraction for foreigners to work and study in the city as it continues to maintain a good standard of living and is economically strong.
11. Barcelona
Annual Positive Change in Ranking: +10
The Spanish city of Barcelona is another globalized city in the world. The port of Barcelona is known for being one of Europe’s main seaports. It has a rich culture and serves as a major tourist destination.
10. Taipei
Annual Positive Change in Ranking: +10
Taipei is a globalized city in Japan. It has progressed on its globalization index as a result of being a gateway for the economy’s trade and development. It is also highly livable and inclusive.
9. Berlin
Annual Positive Change in Ranking: +10
Berlin is a major hub for trade and one of the largest industrial towns in Germany. It also attracts international businesses, making it one of the top globalized cities in the world.
Investors who seek to diversify their portfolio with dominant global players may consider investing in Tesla, Inc. (NASDAQ:TSLA), Walmart Inc. (NYSE:WMT), and JPMorgan Chase & Co. (NYSE:JPM).
8. Amsterdam
Annual Positive Change in Ranking: +10
The city of Amsterdam has a lot of things to offer including a major trade port, a high standard of living, rapid technological progress, and a key position for international businesses. All of these factors make the city one of the 15 most globalized cities.
7. Shenzhen
Annual Positive Change in Ranking: +11
Shenzhen is known for its economic competitiveness. It attracts significant foreign investment and has a high GDP thereby qualifying as one of the most globalized cities across the world.
6. San Francisco
Annual Positive Change in Ranking: +12
The famous Silicon Valley is positioned in San Francisco, making it a hub for technology companies. It is also known for having a strong cultural tourism history. Thus, the city is one of the most globalized cities across the globe.
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Disclosure: None. 15 Most Globalized Cities in the World is originally published on Insider Monkey.