Five cities set to grow in prosperity and importance

We assess five cities that we believe are set to grow in prominence and prosperity.

At a glance

Below we look at five urban centres across the world that we believe will increasingly attract investors over the coming years.

Bengaluru

Cities in India are often overshadowed by the success of Mumbai, but Bengaluru is expected to disrupt this narrative. Over the next five years, Oxford Economics data indicates that real GDP will grow by almost 60%. Like Hangzhou, Bengaluru – often dubbed India’s answer to Silicon Valley – is known for its technology sector.

The city is home to companies including Flipkart, Infosys and Wipro, and over 400 multinationals including Microsoft, Hitachi and Samsung have bases there. This is supported by the fact that the city has been grossing the country’s highest office absorption volume consecutively for the last 10 years.

Bengaluru has made a commitment to creating a knowledge economy by investing in education centres, including the Indian Institute of Management Bengaluru, the Institute of Science and the National Aerospace Laboratories.

The city’s broad ecosystem of innovation offers multiple opportunities for future growth, reflected in the rise of new age technology companies across sectors including artificial intelligence, food tech, fintech and robotics. 

At a glance: 40% UHNWI five-year forecast growth 

Hangzhou

Hangzhou is making a name for itself both globally and within China. The transport, storage, information & communication services sector has more than doubled in the past five years, and is expected to expand by a further 46% over the next five, according to Oxford Economics data.

This growth in the city’s innovation and technology industry has resulted in the UHNWI population expanding by 25% over the same period.

Following in the footsteps of Alibaba, which was founded in Hangzhou, there are now 26 “unicorns” (technology companies with a valuation in excess of US$1 billion) in the city.

Aside from its role as a leading tech market, Hangzhou has the location – in the middle of the Yangtze River delta, just an hour from Shanghai by high-speed train – and the infrastructure in the form of extensive rail, road and air routes to benefit from the economic success seen in the rest of China.

At a glance: 34% UHNWI five-year forecast growth 

Stockholm

Stockholm is cementing its place as one of the most innovative cities in the world, making it a prominent centre for wealth creation and growth: We estimate that the UHNWI population will grow by 23% between 2018 and 2023. In 2017, the European Commission named Stockholm as the most innovative city in Europe, in part due to the value placed on welfare and sustainability, which nurtures pioneering ideas.

As the birthplace of market-leading multinationals, including music streaming platform Spotify, it is clear that this entrepreneurial spirit is flourishing.

This is further enhanced by Stockholm’s ability to attract talent; it ranks second in the INSEAD Global Talent Competitiveness Index 2018, which measures a city’s ability to enable, retain, attract and grow its workforce. This is reflected by 8% population growth over the past five years and a forecast of a further 7% increase over the next five.

At a glance: 23% UHNWI five-year forecast growth 

Cambridge

As one of Europe’s leading technology clusters, Cambridge is the UK’s answer to Silicon Valley. In 2017, the turnover for digital tech business in “Silicon Fen” was £2.4 billion, equivalent to £152,000 per employee, according to Tech Nation.

The world-class talent coming out of the University of Cambridge, combined with the city’s renowned research facilities and pre-existing network of tech businesses, encapsulates its extensive appeal.

Tech giants including Apple, Microsoft and Amazon have a presence and are developing pioneering technology including Amazon’s “Prime Air” and Apple’s AI capabilities. To accommodate the city’s success, Cambridge council has plans to create new neighbourhoods, with 14,000 new homes set to be built by 2031.

Infrastructure investment in the city is also strong: a new train station was opened in 2017, with another on the way by 2021 and an underground railway, appropriately named the Isaac Newton Line, due to begin operation in 2025. 

At a glance: 19% UHNWI five-year forecast growth 

Boston

The city of Boston is an attractive, and relatively affordable, alternative investment destination to New York and San Francisco. Unlike these established markets, Boston is less densely populated by start-ups, making the competition for attracting capital less fierce.

Yet the demand is still there; between 2015 and 2017 Boston received US$24.5 billion in venture capital investment, the fifth highest globally, according to the Center for American Entrepreneurship.

The city is also able to draw on a vast pool of talent, with two Ivy League Universities, Massachusetts Institute of Technology (MIT) and Harvard, which rank 4th and 6th respectively in The Times World University rankings for 2019. Tech giants including Google, Amazon, Facebook and Uber are already capitalising on this, with offices located in the city. 

At a glance: 15% UHNWI five-year forecast growth 

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