7 Emerging Global Cities from Forbes slightly outdated at 2006-2-06:
New York -
Shanghai, Bangalore, Dubai, Bangkok--so last year.
As we enter the thick of 2006, a new crop of cities is rising as they assume their place among the world's preeminent business hubs.
These up-and-comers--which span the globe from Asia to Africa to Europe--will be mostly unknown, even to many seasoned travelers. But some jet-set business leaders have fixed on these growing hot spots with unshakable zeal. The allure is irresistible. Next to the world's crowded, smoggy, overpriced business capitals, these cities gleam with the newness of virgin territory.
It should come as no surprise to anyone that the pull of foreign opportunity is robust and growing. U.S. companies spent $229.3 billion in overseas direct investment in 2004, according to the U.S. Department of Commerce's Bureau of Economic Analysis. That's up almost 50% from 2003, and up threefold since 1994.
"Companies are always on the hunt for high growth potential and inefficient capital markets," says Gary Garrabrant, chief executive officer of Equity International, a real estate private equity firm. "They're also looking for places with a high concentration of young, aspirational professionals."
The cities on our list meet those criteria, though often in wildly different ways. Some already boast of advanced infrastructure, great universities and enthusiastic local governments. Some have even succeeded in attracting big corporate names, such as high-tech giants Intel (nasdaq: INTC - news - people ), Motorola (nyse: MOT - news - people ) and IBM (nyse: IBM - news - people ), and international consortia like Airbus and Galileo.
Other cities are less developed. Their infrastructure tends to be on the weak side, and accommodations for English speakers can be sparse. Corruption is sometimes prevalent, even institutionalized.
In any case, enormous potential awaits the intrepid corporation. Garrabrant cites three obvious but essential elements companies should look for when setting up shop in an emerging metropolis--a receptive government, a growing consumer class and ample land for development.
In formulating our list, we spoke with business leaders, local officials, real estate experts and an academic. We then narrowed our final selection to a group that represented as many continents as possible. The list isn't meant to be comprehensive, but a sampling of the most promising and the most fascinating.
Without a doubt, these cities benefit from being second tier, which would be an insult in almost any other context but a bonus in this case because it means that, like Avis, they're always trying harder. "It's really quite simple," says Garrabrant. "Secondary cities have opportunity, and that's what people are looking for."
Chengdu is situated far from the razzle-dazzle cities of China's east coast. Here, life is slower, people are nicer and the cost of doing business is far less expensive. Wages in Chengdu are half those in Shanghai and Beijing, according to the China Economic Review. Which may be why companies like Motorola, Intel and Microsoft have established a major presence in this western boomtown. Thanks to government support, Chengdu is fast becoming China's Silicon Valley, drawing smart young workers from all over the country. "Much of it comes down to the quality of life," says professor Jane Kuo, a China business expert. "People in Chengdu aren't as aggressive as they are in Shanghai."
In Toulouse, the overhead roar of Airbus jets is a constant reminder of the city's long-standing link with the aerospace industry. Airbus has built two major factories here, employing more than 10,000 people. In the works is the new $730 million Cancéropôle, designed as a leading research center for cancer treatment and prevention, combining public and private sector money. "The cross-pollination of talent will help speed the application of new research in the marketplace," says Jean-Philippe Hanff, director of Midi-Pyrénées Expansion, a business development organization. Where will this talent come from? Toulouse boasts of the second-highest concentration of universities in France after Paris.
For much of its history, Pune has existed in the shadow of Mumbai, which is located just 77 miles to the west and has more than three times as many people. But Pune is gaining more attention as a high-tech alternative to its hot-shot neighbor. IBM, Hewlett Packard and WiPro are among the international IT giants that have established offices in Pune; there are also countless smaller technology companies, call centers and business-process outsourcing firms. Increasingly, Pune is benefiting from the spillover of Mumbai's growth. Experts say Mumbai was so poorly designed that many businesses are looking to Pune for a fresh start.
n the past 100 years, Warsaw has gone from war-ravaged crucible to communist capital to democratic hotbed. The city's latest transformation is equally epochal--capitalist nucleus for Eastern Europe. Real estate firm Cushman & Wakefield Healey & Baker expects Warsaw to draw more companies in the next five years than any city in the European Union. The firm estimates that if investment in Warsaw continues at its current pace through 2010, the city will rank No. 6 among European cities in its popularity with businesses, up from its current 20th-place ranking.
(Extra Sushi Comment: I love the fact that they chose a picture that prominently displays the Palace of Culture and Science, a "gift" from Stalin and the most glaring Communist artifact in Poland, if not all of Eastern Europe. The locals joke that the best view of Warsaw is seen from this monstrosity because you can't see the Palace itself. The palace now houses a massive movie theater, ironically an obvious combination of culture and science)
A kind of city-state in the mold of Singapore, this Persian Gulf archipelago hasn't experienced the same rush of foreign investment as neighboring city Dubai. But that's changing now that the Abu Dhabi government is pushing for more office and residential development. Experts expect to see less of the ultra-Vegas-style opulence that's taking over Dubai and more of the serious architecture associated with New York's Financial District. Key to realizing Abu Dhabi's faster growth is the abundance of petrodollars and a new, energetic ruler (Sheik Kalifa bin Zayed Al Nahyan) who's actively promoting private investment in real estate.
When city planners dream, they dream of Curitiba, a model of urban development that embodies that rare harmony between public and private sectors. It features a highly developed public transportation system (which the public actually uses), an efficient social services network, an environmentally conscious mayor and a pro-business agenda that encourages foreign investment. Unlike the bursting-at-the-seams metropolises of Rio de Janeiro and São Paolo, this modest city has abundant land for growth and development. Companies that set aside green areas in their projects are even eligible for tax breaks.
(Sushi comment: I was in Curitiba in September '06 and it is nothing like anywhere else in Brazil, or South America for that matter. My first thought was "this is like many other Western cities," and my second was "Why can't more cities in Brazil be like this?")
Once the U.S.'s most detested enemy, Libyan leader Muammar al-Qaddafi has gone to surprising lengths in the past ten years to open the country to business and greater political discourse with the West. Last year, the U.S. lifted trade sanctions. And in December, three major U.S. oil companies--ConocoPhillips, Amerada Hess and Marathon Oil--announced they would resume Libyan operations following a 19-year hiatus. As Libya's most developed city, Tripoli stands to benefit enormously from the renewed business interest in the country.
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