New York vs. London: Two Cities to Rule Them All
In picking the world's greatest city, these two global capitals are practically tied. But somebody got to be a winner ...
In 2007, McKinsey did the thing McKinsey does, and released a study aimed at discovering something utterly unquantifiable but nonetheless tantalizing: the greatest city in the world of the future. The verdict? New York was still the front-runner, but London was gaining -- not just as a financial center, but as a global capital of wealth, prestige, and culture.
At the time, London was indisputably the world's most important international equity market, with three times as many IPOs as the New York Stock Exchange and more finance workers than New York. The same year, New York magazine published a blow-out cover spread "New York vs. London." Even political leaders noticed the race tightening. "Let's be clear," Mayor Michael Bloomberg announced when he caught wind of the study. "The financial services industry is one reason that the 20th century was the American century and that New York became the world's capital."
Five years later, London's financial sector is still larger than New York, as a share of the city economy, and New York's GDP per capita is slightly higher. And, as the Atlantic Cities pointed out, the cities are even matched.
London has a slight edge as the world's leading financial center, ranking first to New York's second. New York's greater metro area is substantially larger, with roughly 22 million people to London's 14 million. And New York is economically more powerful, ranking second only to Tokyo, with London third, in the Economic Power Index I published here last fall.
When you dig through the macro numbers, the most striking thing is how similar the cities are. New York and London went 1-2 in the 2011 Global Cities Index -- and 2-1 in the Global Financial Centres Index for 2011. Their city-proper populations differ my barely 3 percent. In New York, 6.8 million families earn more than $20,000 annually, according to McKinsey. In London, it's 6 million. Between 1993 and 2010, New York's city GDP grew 26% faster than the entire country. London grew 27% faster than the UK.
The cities also mirror each other as transatlantic cultural tent poles. New York has the Met, MoMA, and Museum of Natural History. London has the National Gallery, Tate Modern, and the British Museum. New York has Broadway. London has the West End. New York is gobsmackingly cosmopolitan, with 36% of its residents foreign born. London's share is 40%.
The biggest difference going forward might be economic circumstances. London caught up to New York in terms of wealth by doubling down on financial services. As a result, it was arguably stung even deeper by the credit meltdown. Even today, Great Britain is in a recession, and its biggest local trading partners are moving into a recession, too. The United States is in a muddle-through, but we're growing, and our biggest trading partners (Mexico and Canada) are growing, too. The nation's largest metro economies are not only growing, but also gathering strength. After decades of suburban growth, young people are moving back into cities -- and New York is growing faster than it was for most of the last decade. They say a rising tide lifts all boats. Therefore, a growing U.S. economy lifts New York in this 2012 poll.