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Hazem Galal "From Moscow to Sao Pãulo"
1. From Moscow to Sao Pãulo
Emerging 7 Cities of Opportunity Study 2013
Hazem Galal
Global Leader for PwC´s State and Local Government Sector
2. Cities have become the economic
engine of the modern world,
and nowhere is this more true
than in the seven leading emerging
nations –
Russia, Brazil, India, China, Mexico,
Turkey and Indonesia.
The E7 Cities of Opportunity report provides
a detailed, objective and timely study of the
business, economic and cultural hubs of the
emerging world – Moscow, São
Paulo, Beijing, Mumbai, Mexico
City, Istanbul and Jakarta. The report
presents extensive quantitative research as
well as analytical discussion on the health
and well-being of each of these cities.
3. Emerging 7 countries and cities
Moscow
Beijing
Istanbul
Economic growth shifts
to emerging countries
Mexico City
Mumbai
Jakarta
São Paulo
Russia should overtake
Germany to become the largest
European economy before 2020
in purchasing power parity
Source: PwC report “World in 2050 - BRICs and Beyond:
Prospects, challenges and opportunities”
From Moscow to Sao Pãulo
PwC Russia
India should become the
third global economic
giant by 2050
China will overtake the US as
the largest economy by 2017
in purchasing power parity
December 2013
3
4. We measured the cities against 10 categories and
60 variables
Tools for a changing world
Quality of life
Intellectual capital &
innovation
Technology
readiness
• Classroom size
• Internet access in
schools
• Hotel rooms
• Broadband
quality score
• Number of
international
association meetings
• Libraries with public access
• Math/science skills attainment
• Literacy and enrollment
• Percent of population with
higher education
• Research performance of top
universities
• Innovation Cities Index
• Digital economy
score
• Software
development and
multimedia
design
City gateway
• International tourists
• Aircraft movements
• Incoming/outgoing
passenger flows
• Airport to CBD access
• Intellectual property protection
Transportation
&
infrastructure
Health,
safety
& security
Sustainability
& the natural
environment
• Public transport
systems
• Hospitals
• Natural disaster
risk
• Cultural vibrancy
• Thermal comfort
• Mass transit
coverage
• Cost of public
transport
• Licensed taxis
• Health system
performance
Demographics
& livability
• Quality of living
• End-of-life care
• Recycled waste
• Working age
population
• Crime
• Air pollution
• Traffic congestion
• Political
environment
• Public park space
• Major construction
activity
• Housing
• Entrepreneurial environment
Economics
Economic clout
Ease of doing
business
Cost
• Number of Global 500 headquarters
• Ease of starting a business
• Total tax rate
• Financial and business services employment
• Resolving insolvency
• Cost of business occupancy
• Productivity
• Employee regulations
• Cost of rent
• Attracting FDI: Number of greenfield projects
• Ease of entry: Number of countries with visa waiver
• Consumer price index
• Attracting FDI: Capital investment
• Flexibility of visa travel
• Cost of Internet
• Rate of real GDP growth
• Foreign embassies or consulates
• iPhone index
• Level of shareholder protection
• Operational risk climate
• Workforce management risk
From Moscow to Sao Pãulo
PwC Russia
December 2013
4
6. How the E7 Cities of Opportunity rank
Intellectual
capital
and
innovation
Technology Transportation Health,
Sustainability Economic
readiness
and
safety
and the
clout
infrastructure
and security natural
environment
1
Beijing
45
20
2
Moscow
47
19
3
Mexico City
4
Istanbul
33
17
22
5
São Paulo
36
14
6
Mumbai
13
7
Jakarta
44
27
22
14
15
30
25
30
27
18
27
19
37
33
28
Ease of doing Cost
business
Demographics City
and livability
gateway
38
18
23
35
23
23
19
19
54
20
14
19
35
21
16
21
23
39
23
20
20
23
21
15
21
15
32
27
28
17
29
19
28
13
26
12
297
40
283
32
15
16
Score
21
273
233
29
223
18
10
209
192
18
Highest rank in each indicator
1 Rating position
From Moscow to Sao Pãulo
PwC Russia
December 2013
6
7. Intellectual capital and innovation
Moscow consistently ranks No. 1 in education
Classroom
size
Libraries with Math /
Literacy and
public access Science skills enrollment *
attainment *
1
Moscow
2
Beijing
3
Mexico City
4
São Paulo
5
5
5
Istanbul
4
4
6
Mumbai
7
Jakarta
7
1
6
5
7
2
7
6
7
2
2
3
*Country-level data.
From Moscow to Sao Pãulo
PwC Russia
1
4
1
1
2
6
6
5
6
6
4
6
5
4
Research
Innovation
performance Cities Index
of top
universities
7
3
3
3
Percent of
population
with higher
education
1
3
4
2
3
1
45
6
4
5
47
6
3
2
2
3
4
7
4
7
Entrepreneurial Score
environment *
1
7
5
2
Intellectual
property
protection *
44
3
2
36
7
5
1
6
33
27
2
22
If there is one principle on which virtually all
economists concur, regardless of disagreements
over other aspects of economic policy, it is that
education, research, and scientific and
technological innovation serve as the basis of
economic and social development.
December 2013
7
8. City gateway
Beijing dominates this indicator with an almost perfect score
Hotel rooms
1
Beijing
2
Moscow
3
Istanbul
4
Mexico City
5
São Paulo
5
Jakarta
7
Mumbai
International tourists Number
Aircraft movements
of International
Association Meetings
7
6
6
5
3
4
1
5
2
3
1
4
1
2
5
1
29
6
3
40
32
4
2
2
2
5
4
3
Score
7
6
5
4
Airport
to CBD access
7
7
6
4
5
6
3
7
2
1
7
Incoming /Outgoing
passenger flows
21
18
1
18
3
10
This indicator tries to quantify a city’s
international connections and its attraction
beyond its own region – its “magnetism”
worldwide both economically and culturally
From Moscow to Sao Pãulo
PwC Russia
December 2013
8
9. Technology readiness
Beijing ranks first, with Moscow a very strong second
Internet access in schools *
1
Beijing
2
Moscow
3
Istanbul
4
Jakarta
5
Mexico City
5
São Paulo
7
Mumbai
Broadband quality score
7
5
7
5
1
1
From Moscow to Sao Pãulo
PwC Russia
6
5
17
7
7
4
2
19
1
3
3
20
1
2
Score
4
2
6
6
Software development
and multi-media design
4
4
*Country-level data.
Digital economy score *
6
3
2
15
14
3
14
5
13
Given the speed of “creative destruction” in
current technological innovation, the point for
emerging economies is not necessarily to be
first out of the blocks in technology products, but
to adopt the technology best suited to one’s
needs.
December 2013
9
10. Health, safety and security
Beijing and Mexico City share the top rank, well ahead
of the other E7
Hospitals
1
Beijing
1
Mexico City
3
Istanbul
3
Mumbai
5
Moscow
6
São Paulo
7
Jakarta
Health system
performance *
End-of-life care *
5
7
7
7
5
4
1
*Country-level data.
From Moscow to Sao Pãulo
PwC Russia
3
3
2
5
20
1
18
6
5
27
20
6
1
3
27
3
6
6
4
4
7
1
3
2
7
2
Score
3
6
6
Political
environment
4
5
1
Crime
16
2
15
This indicator affects emerging cities even
more deeply than mature ones because the
former also have to contend with a general
skepticism – both from outsiders and their own
residents – regarding any shortcomings,
inadequacies, and lack of capacity in these
areas of public policy.
December 2013
10
11. Transportation and infrastructure
Beijing and Mexico City tie for first place
Public transport
systems
1
Beijing
1
Mexico City
3
Moscow
4
Mumbai
5
Istanbul
6
Jakarta
6
São Paulo
Mass transit coverage
6
Cost of public transport Licensed taxis
5
3
5
4
7
1
2
2
1
4
1
5
3
7
6
2
4
5
2
30
30
2
1
7
3
5
3
2
Score
7
4
4
Housing
1
7
3
7
6
6
6
6
Major construction
activity
25
1
23
5
22
5
21
6
21
There is no greater threat to the viability of
emerging cities than excessively growing
populations overwhelming infrastructural
capacity.
From Moscow to Sao Pãulo
PwC Russia
December 2013
11
12. Sustainability and the natural environment
Moscow No. 1, significantly surpassing its peers
Natural disaster risk
1
Moscow
2
São Paulo
2
Jakarta
4
Mumbai
5
Beijing
5
Mexico City
7
Istanbul
Thermal comfort
7
Recycled waste
1
7
2
6
3
5
3
21
3
20
2
6
4
3
28
21
5
1
4
2
2
5
7
2
2
7
6
5
3
Score
7
1
4
5
Public park space
6
5
6
Air pollution
4
19
19
1
14
In fact, Moscow’s achievements in this
indicator go much deeper than are apparent.
The Russian capital does exceptionally well not
only against the emerging cities. It also ranks
No. 7 overall in sustainability and the natural
environment in the complete rankings of all 27
Cities of Opportunity, tied with Paris and just
below Stockholm.
From Moscow to Sao Pãulo
PwC Russia
December 2013
12
13. Demographics and livability
Beijing and Moscow tie for No. 1
Cultural vibrancy
1
Beijing
1
Moscow
3
São Paulo
4
Mexico City
5
Istanbul
6
Mumbai
7
Jakarta
Quality of living
Working age population
3
6
5
7
7
7
4
3
1
19
1
17
7
2
1
23
2
6
1
23
7
5
4
Score
7
4
5
6
2
Traffic congestion
3
2
15
7
13
7
12
While the world’s emerging cities are
undeniably dynamic economic centres, they’ve
also increasingly become difficult places in
which to live. Emerging cities cannot continue
to grow in, or attract, the numbers of people
they have until now without at some point
overwhelming their infrastructure and their
own citizens.
From Moscow to Sao Pãulo
PwC Russia
December 2013
13
14. Economic clout
Beijing tops the rankings, both for the E7 and globally, with
Moscow close behind
Number of Global
500 headquarters
Financial and
business services
employment
Attracting FDI:
Number of
greenfield projects
7
7
7
1
Beijing
2
Moscow
6
3
Mumbai
6
3
São Paulo
5
Istanbul
5
Mexico City
7
Jakarta
6
4
2
2
1
6
3
4
4
2
23
4
7
3
37
23
1
5
1
Score
33
5
5
3
3
7
1
4
1
1
3
Rate of real GDP
growth
2
6
5
5
Productivity
7
6
3
4
2
Attracting FDI:
Capital investment
19
2
19
6
15
What is being measured here is not only the
aggregate strength of a city’s economy, but the
extent of that strength, how far beyond its
limits a city’s economic influence reaches, not
just regionally or nationally, but globally – a
city’s “ability to translate urban strength into a
global economic presence.”
From Moscow to Sao Pãulo
PwC Russia
December 2013
14
15. Ease of doing business
Mexico City tops the rankings, way ahead of the field
Ease of
starting a
business **
1
Mexico City
2
São Paulo
3
Beijing
4
Istanbul
4
Moscow
6
Mumbai
7
Jakarta
Resolving
Employee
Ease of entry:
insolvency ** regulations ** Number of
countries with
visa waiver *
7
7
4
2
7
5
3
6
1
3
*Country-level data.
**Based on most populous city.
From Moscow to Sao Pãulo
PwC Russia
1
4
2
3
2
2
4
7 1
2
7
5
7 1
Score
54
6
6
4
1
4
5
2
3
4
3
7
3
6
5
Operational Workforce
risk climate * management
risk
7
2
4
6
4
7
6
4
2
2
3
5
Foreign
Level of
embassies or shareholder
consulates
protection **
6
7
5
6
5
3
3
Flexibility of
visa travel *
39
7
1
38
35
3
3
35
5
2
32
27
The fact that Mexico City does so well in these
nine variables illustrates its evident and
unquestionable success in attracting global
financial and human capital.
December 2013
15
16. Cost
Istanbul ranks first, just ahead of Mexico City and Mumbai
Total tax rate
1
Istanbul
2
Mexico City
2
Mumbai
4
Jakarta
5
Moscow
6
Beijing
7
São Paulo
Cost of business
occupancy
6
5
7
3
5
1
2
5
1
1
3
2
1
28
1
26
7
3
3
28
2
2
2
6
1
29
3
5
6
Score
5
3
7
4
iPhone index
4
7
6
Cost of internet
4
6
4
7
Consumer price
index
5
4
2
Cost of rent
6
23
4
18
7
16
There are no surprises in this indicator.
If anything, the data confirm most of the media
commentary and expert analysis of the past
couple of years regarding on-going
developments in the economies of the emerging
cities and the emerging world as a whole.
From Moscow to Sao Pãulo
PwC Russia
December 2013
16
18. Population
Aggregate population growth, 2013 – 2025*
Moscow and Mexico City find
themselves in the best position
to limit the environmental,
social and economic burdens
of continual population
growth. Stable populations, or
even incremental growth,
allow for more systematic
planning and for passing on
the benefits of economic
expansion to urban residents.
Thousands
2,998
1,083
123
892
633
192
Moscow Beijing Mexico
City
1,102
São
Paolo
Istanbul Jakarta Mumbai
Average annual growth rate
0.1% 1.4% 0.2% 0.8% 0.7% 0.7% 0.4%
* Moscow figures are based on publicly available data and do not include data on some newly attached to the
city territories (so called New Moscow)
From Moscow to Sao Pãulo
PwC Russia
December 2013
18
19. General employment
Population vs. employment
From Moscow to Sao Pãulo
PwC Russia
2025 employment forecast
Employed in 2013
20
Million people
This chart illustrates the
impact on economic
development of ceaseless
population growth: the
two cities that currently
have the largest number
of inhabitants, and will
continue to have them in
2025, also demonstrate
the consequences of very
large populations. Beijing
will not be able to
maintain its current
employment-topopulation percentage of
61% in the future.
% of employment compared
to total population
15
58%
10
61%
57%
58% 58%
54%
47%
0
61%
Moscow Beijing Mexico
City
45%
39%
51%
5
35%
51%
39%
São Istanbul Jakarta Mumbai
Paolo
* Moscow figures are based on publicly available data and do not include data on some newly attached to the
city territories (so called New Moscow)
December 2013
19
20. Employment in E7 cities’ group by industry
2013
25%
20%
15%
10%
5%
From Moscow to Sao Pãulo
PwC Russia
Mining
Agriculture, forestry
and fishing
Utilities
Financial services
Construction
Leisure, culture and
other services
Hotels and restaurants
Transport, storage and
communications
Public services
Manufacturing
Business services
0%
Wholesale and
retail
Wholesale-retail will remain
the largest sector in 2025,
maintaining its 18% of total
employment, while public
services will also continue
as a significant sector,
dropping only 1% from its
current level to 14% in 12
years, just below
manufacturing.
2025 forecast
December 2013
20
21. Economic growth from 2013 to 2025 (1/2)
These numbers are striking!
That represents almost a
tenth of Mumbai’s GDP
growth over the next 12
years and a bit more than a
fifth of Moscow’s.
2025 forecast
547
GDP, US $bn
As opposed to the forecast
annual growth of 3-6%
among our E7 cities, the
average GDP growth of the
OECD* group of 34
(wealthy) countries between
2008 and 2012 was 0.62%!
2013
455
379
310
228
189
339
272
188
247
188
126
123
58
Moscow Beijing
São
Paolo
Mexico Istanbul Jakarta Mumbai
City
Average annual growth rate
* Organisation for Economic Cooperation and Development
From Moscow to Sao Pãulo
PwC Russia
3.1% 5.9% 4.2% 3.1% 5.0% 5.7% 6.4%
December 2013
21
22. Economic growth from 2013 to 2025 (2/2)
This GDP per capita chart
is even more striking.
Mumbai increases its
wealth by 100%, Jakarta
by 79%, Beijing by almost
70%, Istanbul by 66%,
and São Paulo, Mexico
City and Moscow by
roughly 43-47% each.
GDP per capita, US$ 000s, 2013 prices
2013
2025 forecast
46
32
30
24
14
25
21
17
23
14
23
13
9,3
4,6
Moscow Beijing Mexico
City
São
Paolo
Istanbul Jakarta Mumbai
Average annual growth rate
3.0% 4.4% 3.4% 2.9% 4.3% 5.0% 6.0%
From Moscow to Sao Pãulo
PwC Russia
December 2013
22
24. For an in-depth discussion about
the E7 Cities of Opportunity, please, contact:
Hazem
Galal
Partner
PwC's Cities & Local
Government Sector Global
Leader (Doha, Qatar)
Tel: +974 4419 2852
hazem.galal@qa.pwc.com
From Moscow to Sao Pãulo
PwC Russia
Ekaterina
Shapochka
Partner
Government and Public Sector
Services Leader
PwC Russia
Tel.: +7 (495) 223 5002
ekaterina.shapochka@ru.pwc.com
Vadim
Khrapoun
Partner
Markets Leader
PwC Russia
Tel.: +7 (495) 232 5408
vadim.khrapoun@ru.pwc.com
December 2013
24