These are the most innovative cities in the world
Innovation has become a buzz word for city success. Major corporations have long targeted talent-rich innovation hubs, but the “war for talent” is now intensifying their focus on talent hotspots.
Among real estate investors, several large investment managers have started to explicitly target cities perceived to have a strong innovation system. Meanwhile, city governments are seeing the innovation economy and innovation districts as key building blocks of sustainable long-term growth and smart city futures.
So it comes as no surprise that technology, innovation and smartness are front and centre of the debate on the future of our cities. A wide array of research has shown that vibrant innovation ecosystems and deep talent pools within cities are key to boosting productivity, fuelling economic growth, and driving up living standards.
With so much attention focused on the role of innovation in shaping our cities, JLL set out to test this theory from a real estate perspective.
In our latest Innovation Geographies research, we assessed over 100 cities worldwide to identify cities that have the strongest innovation ecosystems and depth of talent to support a vibrant innovation-oriented economy.
Our ranking of the top cities on innovation and talent reveals a familiar roll call of tech-rich cities. But equally, there are several surprises that indicate that the global geography of innovation is on the move.
Predictably, San Francisco, with its world-leading startup scene, heads our global innovation ranking. Yet the top positions are not all dominated by US cities, but rather are evenly spread across the globe. Asian cities have a much stronger presence than they would have had, even a few years ago.
Among the leading Asian cities, Tokyo and Singapore – both well-established world cities – are joined by Beijing and Seoul in the global top 10.
Beijing now has a deep-rooted innovation ecosystem. It has nurtured the most unicorns outside of Silicon Valley and is the third largest destination for venture capital funding globally.
Shanghai and Shenzhen have also achieved global Top 20 status, highlighting the ascendency of China’s major cities as innovation hubs. Shenzhen, home to a new breed of globally competitive, tech-savvy corporations has emerged on the world stage and is attracting talent from across China. Remarkably, the city has the highest proportion of any city globally of the so-called “engine room” population – in other words, those in the 20-40 age bracket.
Meanwhile in Europe, the established world cities of London and Paris are joined in the top rankings by several mid-sized cities, which are increasingly building a world-class reputation for innovation and talent. The tech-rich quartet of Munich, Berlin, Amsterdam and Stockholm stand out, with Berlin in particular becoming a hotspot for digital nomads from across Europe.
Cities in the US, Europe and Australia lead our global rankings for talent concentration. London is in prime position for the quality and depth of talent, with the largest share of people with university degrees of any large city globally.
Nonetheless, with some of the world’s highest-rated universities based around the Boston and San Francisco Bay metro areas, US cities dominate the highest rankings. Washington DC, in third position globally for talent, stands out with one of the largest proportions of people working within the innovation economy. Perhaps it’s no surprise that Amazon chose this city for its second headquarters.
Austin in Texas is another US city that is punching well above its weight on the global stage, with a young, well-educated and rapidly growing population. Known for its creative economy and quality of life, Austin has a thriving startup culture and is increasingly attracting global tech companies, such as Apple.
Outside the US and Europe, the Australian cities of Sydney and Melbourne make the global top 10 for talent. The attractive lifestyle offered by these cities has contributed to strong demographics which, combined with a robust university infrastructure, make them strong global contenders for talent.
JLL’s Global Top 20 Innovation Geographies
What do these rankings say about the role of innovation in shaping real estate markets? Certainly, our research shows that the top performing cities in JLL’s Innovation and Talent indices have among the most dynamic real estate markets in terms of rental growth. Moreover, innovation and talent hotspots are attracting a disproportionate share of global investment into real estate.
Of course, the interplay between real estate and the innovation economy is far more complex than a case of innovation and talent concentrations boosting rents and investment.
Real estate is an active contributor to a vibrant innovation-based city economy, not just a consequence of it. The true value of real estate is in providing the infrastructure and environment for productive activity that facilitates creativity, innovation and entrepreneurship, while at the same time fostering a sense of community and wellbeing for its citizens in a sustainable urban model.
Our “Innovation Geographies” research shows that, across the world’s top innovation-oriented cities, real estate is at the forefront of creating dynamic innovation ecosystems. Real estate also plays a pivotal role in the development and operations of smart city initiatives, helping to boost transparency and improve sustainability, as buildings become smarter and more environmentally friendly.
Real estate really is the heartbeat of a vibrant innovation-oriented city.