Canada’s largest city lags only behind New York City and London in a new analysis of the world’s best places for economic opportunity.
The latest edition of professional services firm PricewaterhouseCoopers (PwC)’s Cities of Opportunity study finds New York retaining its leading position as a centre of economic opportunity, with London in second place and Toronto in third. The study looked at 27 major world cities. Toronto was the only Canadian city included in the study.
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However, Toronto’s ranking was down one spot from last year, when it came in second overall, behind only New York. Part of the difference was the addition of a new criterion for natural environment. Because of the city’s cold winters, Toronto ranked third-last in that category.
The city’s overall strong performance was welcome news to former Toronto mayor David Miller, who said that the city’s values of “inclusion, social justice and equity” had a positive economic impact.
“Intellectual capital and innovation matter a lot because businesses will come where there is the intellectual capital,” Miller said in an interview carried out for the PwC study. “Demographics and lifestyle assets matter a lot. If you’ve got the intellectual capital and innovation, you’ve got a livable city, and if you’ve got economic clout, that’s a very strong combination.”
The study measured cities’ relative economic strength on 10 indicators, including technological readiness, infrastructure, health and safety, environmental sustainability and “city gateway” — how much access a city has to the world’s markets. Toronto did not win in any of the categories, but placed high enough to rank third overall.
Toronto placed second in the environmental sustainability category, and second as well in health and security.
While the winners are cities that have long been known as economic powerhouses, the PwC report stressed that the economic centres of the developing world — particularly Beijing and Shanghai — are rapidly narrowing the gap.
“Beijing advanced to the top spot in "economic clout" while Shanghai placed fifth behind Paris, London, and New York. This is the first time two emerging cities appeared in the top five of this indicator category,” PwC said in a press release.
But PwC’s study suggests cities are struggling with a host of problems in the wake of global economic woes in recent years, including tensions caused by rapid migration into cities and growing income inequality.
The current state of “[f]inancial uncertainity adds to the picture,” the report states. “Sociopolitical forces come powerfully into the equation against the backdrop of rising levels of unemployment (often disproportionately high among the young), increasing income inequality in some places, austerity in others, and growing popular resistance bubbling up to a consumer-goods-driven economy.
“Add to that the tension that urban immigration, whether domestic or international, often stirs, and the mix offers a wake-up call to leaders and policymakers in government and business.”
PwC puts out the Cities of Opportunity survey annually, and uses data from international organization such as the World Bank and the IMF, as well as national census organizations.