\ New report labels Sydney a ‘superstar city’, but Melbourne is just a ‘regional hub’ – Committee For Sydney


New report labels Sydney a ‘superstar city’, but Melbourne is just a ‘regional hub’

November 26, 2018

Source: News.com.au
Author: Ben graham

26 November, 2018

Tension between the bitter rivals of Melbourne and Sydney could well flare up as a new global economic report has placed them in very different categories of influence and power.

Looking at 3000 major cities around the world, global consulting giant McKinsey says Sydney is the only Aussie city in an elite “superstar” status.

That means it joins the likes of London, New York and Hong Kong, as well as smaller cities which are punching well above their weight in terms of economic performance such as Riyadh, Milan and Atlanta.

Melbourne, on the other hand, may well become Australia’s largest city within 20 years, but it was placed among 75 “regional hubs” in the new study.

These second-tier cities, which includes the likes of Abu Dhabi, Chengdu, Lagos and Nairobi, are said to play a key role in their respective countries and “could become global economic hubs in the future”.

The world’s 75 “regional hubs” make up five per cent of the world’s population but contribute nearly twice as much to world GDP, according to the report.

So, what makes a superstar city?

In the 50 elite cities picked by McKinsey, the average GDP per capita was $58,000 and 30 per cent of the city’s households were deemed “high income”.

They make up roughly eight per cent of the world’s population but 21 per cent of its GDP as well as hosting the headquarters of roughly half of the world’s large companies.

“Cities such as Boston, Seattle, Singapore and Sydney have made substantial gains in per capita GDP relative to their peers over the past decade,” the report’s authors wrote. “Combined with strong population growth, these cities have increased their share of world GDP by 20 to 30 per cent over the past decade.”

The report stated that roughly half of superstar cities are steadily pulling away from their peers in terms of per capita GDP and are seeing strong population growth.

“Superstar cities have different trajectories of economic and population growth, though they all outperform their peer cities in the same region and of the same size and income level,” the report said.

In the battle for global economic influence, the US still leads the way with 11 “superstar” cities, while 10 were in China and nine in western Europe.

McKinsey’s list of superstars has seen a few movers and shakers from last year’s report as emerging markets such as Kuala Lumpur, New Delhi and Jakarta made the “superstar” grading, while Rome, San Diego and Vienna fell out of the list.

The findings come after an independent think tank, Committee for Sydney, released a report in September which shows the Harbour City is lagging behind the world’s big seven cities — London, New York, Hong Kong, Singapore, Seoul, Paris and Tokyo.

While it beat competition from Brisbane and Melbourne, the report placed Sydney on level pegging with a list of second-best cities such as Washington DC, Shanghai and Toronto.

Sydney was in the bottom two of the 33 cities in the report for public transport coverage and ­efficiency, the cost of living for expats and students, the variety of cultural attractions, technology and digital readiness for the future, and perceptions of its night-life offerings.

“The knock-on impacts of the city growing at such a fast pace are strains upon our overall quality of life as well as public infrastructure,” Committee for Sydney executive chairman Michael Rose said.

“While the city’s infrastructure is improving and receiving significant new investment, it is still a drag on its absolute and comparative performance.

“In addition, Sydney’s affordability challenge puts our burgeoning and booming innovation economy under significant pressure.”

Subscribe for the latest news