New York is the most influential city of today, but it's only the second most important city of the future
- New York is the most influential city in the world today, according to a new report from global business-consulting firm AT Kearney.
- That might change. AT Kearney predicted that San Francisco, has the most potential to become the most important city of the future.
- San Francisco is inching ahead in importance thanks to its hub of innovation and entrepreneurship.
New Yorkers have a reputation for thinking their city is at the center of the world.They might be right - but not for long.
AT Kearney, a global business-consulting firm, has released this year's Global Cities Report, and gave New York City the top spot on the Global Cities Index ranking. The firm ranks 135 cities based on current global standing and influence on the world.
But the report includes a second ranking, called the Global Cities Outlook, which measures how a city's potential for importance in the future stacks up against other cities. In this ranking, San Francisco overtook New York to claim the number one spot for most influential city of the future.
The rankings suggest that while New York is the most influential city of today, San Francisco has the most potential relative to other cities to become the most important city of the future.
San Francisco is the best city in the world for innovation
Despite its out-of-control housing prices and cost of living, San Francisco continues to attract the best companies, the top talent, and the most investment dollars. There are reasons for it.
According to AT Kearney, San Francisco is the world's premiere hub for innovation and entrepreneurship. The Bay Area is home to a number of high-growth companies, including Apple, Facebook, Google, Uber, and Salesforce, and the region filed more patents per person (34,324 international patents between 2011 and 2015, with Google accounting for 6.5% of all applications) than any other city ranked by AT Kearney.Venture capital is the lifeblood of business in San Francisco. Between 35% and 40% of all venture funding in the US flows into the Bay Area every year, according to a 2012 study by the Bay Area Council Economic Institute and Booz & Company. As a result, entrepreneurs build companies there, bringing highly-educated professionals to the area in droves.
But this concentration of wealth and power has worsened an already-dire housing market, and not everyone can afford to stay. A shortage of housing coupled with high demand, especially from tech workers who can afford to bid up home prices, has made it impossible for some to buy a home in the Bay Area on a middle-class paycheck.
The median price of a home in San Francisco is $1.5 million, and a person needs an annual income of at least $303,000 to afford the 20% down payment on a home that expensive.
New York slips to No. 2 in the future
Nicole Dessibourg-Freer, an analyst at AT Kearney, tells Business Insider that it's unfair to say New York is "faring worse" for the future. New York sits second on the Global Cities Outlook ranking and remains "very much a leader" in finance, media, fashion, and food, she said.
Instead, Dessibourg-Freer explains that New York has less potential relative to other cities like San Francisco to become the world's dominant city in the coming years.
According to AT Kearney, New York has some weaknesses. The Global Cities Outlook ranking looks at four main criteria: innovation, economics, personal wellbeing, and governance. New York typically underperforms in the personal wellbeing category, which measures factors relating to safety, healthcare, inequality, and the environment, Dessibourg-Freer said.
A 2017 study by personal finance website WalletHub declared San Francisco the greenest city in America, based on 21 indicators including greenhouse gas emissions per capita, number of smart-energy policies and initiatives, percent of commuters who drive, and amount of green space. New York placed sixteenth on the ranking.