Triumph of the city - Global Cities and Competition

Why do some cities become “global hubs” while others stagnate?

“Some cities become global hubs because they combine strategic location, diversified economies, skilled labour, robust infrastructure, and strong institutions that attract investment, talent, and innovation. Network effects and agglomeration economies amplify these advantages, making hubs self-reinforcing over time. In contrast, cities with weak governance, poor connectivity, or over-reliance on declining industries may stagnate, unable to compete for capital or human talent. Ultimately, global city status is less about size and more about the interplay of economic, institutional, and social factors that sustain long-term dynamism.”

How important are factors like geography, history, and policy in explaining a city’s rise?

“Geography, history, and policy all play crucial roles in shaping a city’s rise. Geography can provide natural advantages like ports or resources, history can embed trade networks or institutional legacies, and policy determines how effectively cities leverage these assets through infrastructure, regulation, and investment. The most successful cities are those where favourable geography and historical foundations are complemented by forward-looking policies that enable innovation, attract talent, and sustain growth over time.”

Could another city realistically displace London or New York as financial capitals? How do migration and globalisation shape the competitiveness of cities?

“It is unlikely that another city will fully displace London or New York as global financial capitals in the near term, because both benefit from entrenched networks, deep capital markets, regulatory frameworks, and agglomeration economies that reinforce their dominance. Migration and globalisation shape competitiveness by concentrating talent, ideas, and investment in certain cities, enabling them to adapt, innovate, and sustain their global roles. While emerging financial centres may grow, displacing entrenched hubs requires not just capital and policy, but decades of institutional and network-building.”

.

.