According to a recent PwC study, the leaders in business friendliness are: Hong Kong, Singapore, New York and London. Lesson learnt: it is not geography, a specific cultural profile or historical experience that matters in the end when it comes to business investment.
What does matter, as the variables in this category indicate, is a combination of flexible labor policies, openness to the rest of the world, and the ease of starting and maintaining an enterprise (which embraces the stability of a city’s fiscal and regulatory environment).
American cities continue to lead the rankings this year in degree of employer flexibility to create work schedules and ease of firing. Indeed, were it not for the severe visa requirements of the United States, they would arguably dominate this category. The relative improvement of the continental European cities is a notable change from last year. Paris fell to the bottom five of last year’s rankings but finishes in the middle this year.
Berlin is just above Paris this year, although Frankfurt was just below the French capital last year, three places from the bottom. Stockholm continues to prove its global competitiveness by placing in the top half of the rankings. Toronto, however, is the city that continues to impress, ranking fifth this year in a larger field, up one place from last year. It also is among the top three in the new variables, including first in workforce management risk. If it improved its standings in hiring and firing, as well as visa requirements and flexibility (which are national restrictions), Toronto would be among the easiest cities in the world in which to do business. Sydney also rises conspicuously in this year’s rankings, moving up five places from last year’s report to just barely behind Toronto. Sydney also comes in first in the new category of ease of starting a business and ranks high in both ease of hiring and firing. Again, however, Australia’s visa policies impair Sydney’s abilities to compete at the very highest level in ease of doing business – which, in this case, is particularly noticeable given that Sydney should be a prime competitor in Asia to Hong Kong and Singapore.
What is most striking in the end about the top cities in this ranking is how important open access to the world is to achieving the very top spot. Indeed, it is ironic that Hong Kong (about which there was some fear regarding its business environment after its return to Chinese sovereignty) now ranks second in ease of entry, as it did last year, and first in flexibility of visa travel – up from third last year.
More about cities of opportunity here.