- A new report from business-consulting firm AT Kearney gave San Francisco the top spot in a ranking that measures the hottest cities of the future.
- New York leads when it comes to economic metrics, while emerging tech hubs Singapore and Amsterdam rocketed up the ranking in 2018.
- The concentration of wealth and power in San Francisco has its downsides.
Despite its out-of-control housing prices and cost of living, San Francisco continues to attract the best companies, the top talent, and the most investment dollars.
There are reasons for it. San Francisco is the best city in the world for innovation.
AT Kearney, a global business-consulting firm, just released this year’s Global Cities Report and gave San Francisco the top spot on the Global Cities Outlook ranking. The firm ranks 135 cities based on global standing and influence, as well as their potential for importance in the future. San Francisco won out – for the third year in a row – on a ranking that specifically measures projected levels of influence and innovation.
But San Francisco faces significant competition from the most established global cities, such as New York, London, and Paris, as well as emerging tech hubs.
Here are the top 10 cities for innovation:
10. Melbourne, the second biggest city in Australia, fell four spots in the ranking this year. It’s considered the best city for personal well-being, and has the largest international student population.
9. Down one spot in the ranking, Houston has a healthy economy. It has the highest GDP per capita of any city considered for this list.
8. Boston slid three spots in the ranking, but its top universities, including Harvard and MIT, continue to score big points for innovation.
7. Munich held steady at the No. 7 spot, after showing rapid increases in business activity over the last year.
6. Up a whopping 10 spots in the ranking, Amsterdam placed highly because of its steadfast support for freedom of expression.
5. Singapore, an island city-state in Southeast Asia, rose six places in the ranking. It turned in strong performances across economics, policies, culture, and infrastructure investment.
4. Falling one spot in the ranking, Paris remains a powerhouse of innovation in part because it hosts more big-ticket tech conferences than any other city.
3. London is arguably the world’s real financial center. It climbed one spot in the ranking and leads the world in private investments.
2. New York was ranked as the most influential city today, but it’s considered only the second most important city of the future.
1. Driven by high-growth companies in tech, San Francisco continues to excel in innovation. It held on to its top spot.
According to AT Kearney, San Francisco is the world’s premiere hub for innovation and entrepreneurship. The Bay Area is home to a number of high-growth companies, including Apple, Facebook, Google, Uber, and Salesforce, and the region filed more patents per person (34,324 international patents between 2011 and 2015, with Google accounting for 6.5% of all applications) than any other city ranked by AT Kearney.
Venture capital is the lifeblood of business in San Francisco. Between 35% and 40% of all venture funding in the US flows into the Bay Area every year, according to a 2012 study by the Bay Area Council Economic Institute and Booz & Company. As a result, entrepreneurs build companies there, bringing highly-educated professionals to the area in droves.
But a concentration of wealth and power has worsened a dire housing market in the Bay Area, and not everyone can afford to stay. A shortage of housing coupled with high demand, especially from tech workers who can afford to bid up prices, has made it impossible for some to buy a home in the Bay Area on a middle-class paycheck.
The median price of a home in San Francisco is $US1.5 million, and a person needs an annual income of at least $US303,000 to afford the 20% down payment on a home that expensive.
San Francisco may be the best known city for innovation, but it’s not the only urban area inspiring and financing entrepreneurs. For the full list of innovative cities and an explanation of the ranking’s methodology, head over to AT Kearney’s report.
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