OREANDA-NEWS. June 11, 2013. According to a new Economist Intelligence Unit (EIU) research report, "Hot Spots 2025: Benchmarking the Future Competitiveness of Cities," commissioned by Citi, New York will remain the most competitive global city in 2025, while London will be Europe’s most competitive city and remains Europe’s financial center.

The city is the only one in a mature developed economy to rise significantly in terms of economic strength between 2012 and 2025. London will remain an attractive powerhouse for businesses and people on a global scale, despite tightening of the city’s immigration rules that have made hiring foreign nationals more difficult.

Europe, with seven of the 20 best-performing cities, will be highly competitive in 2025, led by London (2nd), Paris (7th), Stockholm (8th), Zurich (joint 11th), Amsterdam (13th), Copenhagen (Joint 15th), and Frankfurt (Joint 20th). However, the global financial crisis and recession in Europe will continue to be felt in cities across the region, resulting in a "competiveness divide" between Northern and Western Europe, and Southern and Eastern Europe. Madrid (joint 46th), Rome (68Th), Bucharest (80th), and Krakow (joint 87th) all decline in the rankings from 2012 to 2025.

"Around the world, cities continue to evolve as the centers of innovation and engines of economic growth," said Citi CEO Michael Corbat. "Core to Citi’s strategy is a focus on the 150 cities we believe will shape the world in the years ahead. The Citi-commissioned EIU research will enhance understanding of the factors driving urban competitiveness and illuminate how the highest performing cities continue to create competitive advantages".

Major cities in India, Brazil and Russia are expected to improve their competitiveness and catch up to many cities in the developed world. Six of the top 25 most-improved in terms of their overall competitiveness ranking are located in BRIC-countries bar China. Of them, three — Sao Paulo, Mumbai, and Saint Petersburg — are in the top five. Delhi, Rio de Janeiro and Porto Allegre complete the list of major cities from the BRIC-economies. There is no Chinese city among the top 25 most improved cities. This reflects the progress that Chinese cities have already made and the fact that many cities in India and Brazil still have a bit of catching up to do before they can match the competitiveness of their Chinese rivals.

Russia’s capital city Moscow ranks 59th. Saint Petersburg, Russia’s second city, ranks 92nd on the overall Index. Saint Petersburg ascents by 15 places, driven by increased ‘economic strength’ (74th), improvements in the categories ‘human capital’ (69th) and the ‘environment and natural hazards’ (joint 69th). Russia’s only major port on the Baltic Sea is growing; its population is projected to have crossed 5.1m by 2025 (from 4.6m currently). The city also improves in the categories ‘physical capital’ (joint 56th) and ‘financial maturity’ (joint 50th) — the only categories in which it makes the top half of our table of 120 cities. The city improves but still performs poorly in the category ‘institutional character’ (102th).

Middle Eastern cities will be bolstered by their growing economic strength, including sizable city GDP growth rates and increased integration into global trade regimes (enhanced by favorable demographics including a substantial working age population), investment in education and physical capital (infrastructure, public transport, and telecommunications), and enhanced global appeal (including increased flight connectivity and conference development) particularly Dubai (23rd), Doha (24th), Abu Dhabi (39th), Tel Aviv (41st), and Muscat (64th).

While African cities overall are predicted to be less competitive than their global counterparts, Johannesburg (66th) and Cape Town (77th) are recognized for their "physical capital," (particularly improving telecommunications infrastructure), increased regional and global trade integration, cultural vibrancy, and attractiveness as tourist and conference destinations.

"Urban centers throughout Europe are expected to retain their competitiveness through 2025," said Leo Abruzzese, the EIU’s global forecasting director. "The rise in competiveness for Middle Eastern cities signals the region’s ability to compete with top urban centers in North America and in Western Europe".

Globally, New York and London are rated as the world’s two most competitive cities in 2025, while Singapore, Hong Kong, and Tokyo retain their position as third, fourth, and fifth. As the top movers in the Index, Sao Paulo, Incheon and Mumbai are forecast to surge in global competitiveness between 2012 and 2025.

Cities from the United States and Western Europe account for 23 of the top 30 cities in 2025, as they will continue to attract capital, businesses, and people, despite concerns over aging populations and the lingering impacts of the financial crisis.

Citi commissioned "Hot Spots 2025: Benchmarking the Future Competitiveness of Cities" to improve understanding of market competitiveness and to identify where growth, opportunity, and talent are likely to be found in the decades ahead. Citi recognizes that competitiveness is about more than growth — especially as urban centers vie for investment, talent, and business. The report builds on the inaugural EIU report "Hot Spots: Benchmarking global city competitiveness," commissioned by Citi in 2012.

For 200 years, Citi’s central mission has been to enable economic progress. With its global footprint, Citi connects clients to the world, working at the center of global trade and capital flows. On the ground in more than 1,000 cities, Citi has a unique perspective on the complexities of the urban environment. Through Citi for Cities and other initiatives, Citi works with clients and public and private sector partners in cities around the world to enhance public services facilitate commerce, expand financial inclusion and harness advancements in digital, mobile and card technologies.

The full report, including details on methodology and criteria, is available at www.citiforcities.com.