Thursday, March 26, 2015
Specific hub cities will dominate business in emerging markets, though the strengths and opportunities they offer differ
- Shanghai's financial status will grow, but Beijing is where business decisions are made, due to the presence of state firms' headquarters.
- Istanbul and Bangkok's proximity to large markets makes them attractive for foreign subsidiaries -- they now have 23 and 21 respectively.
- Johannesburg's corporate headquarters, eg of miners, and deep capital markets mean it will retain its 'gateway to Africa' status.
- Companies may insulate themselves from basic service deficits in 'smart campus' developments but this risks local resentment.
The world's 750 largest cities already contribute 57% of global economic output. This will probably rise to 61% by 2030, with emerging economy cities accounting for close to half this growth. Among these, Beijing's corporate heft will be unrivalled, thanks to its government links, concentration of global company headquarters and robust growth.
Others will grow in regional significance. Firms eager to enter high-growth markets are likely to base themselves in these hubs due to their middle-class workforces, and strong financial services and business sectors. Their fortunes will continue to diverge from their national economies.
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