Authors
Mike Wardle, Professor Michael Mainelli

Published by
Long Finance & Distributed Futures (December 2020), 46 pages.

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Smart Centres Index 2

The second edition of the Smart Centres Index (SCI 2) was published on 22 December 2020. SCI 2 rates the innovation and technology offerings of leading commercial and financial centres across the world.

The SCI focuses on centres in relation to their approach to and delivery of innovation and technology, including Science, Energy Systems, Machine Learning, Distributed Ledgers, and Fintech, along with other applications. We look at cities rather than countries in developing the index as we consider that it is in cities and other commercial clusters that the development of business is driven forward.

The Smart Centres Index is based on evaluations of three dimensions:

  • Innovation support - the approach taken to regulation and support for the innovation and technology industry provided by the commercial ecosystem.
  • Creative Intensity - the extent to which technology and innovative industries are embedded in the economy of the centre.
  • Delivery Capability - the quality of the work being undertaken in the field in the centre. future competitiveness and rankings for financial and commercial centres around the world.

131 commercial and financial centres were researched for SCI 1 of which 51 are included in the index. SCI 2 was compiled using 126 instrumental factors. These quantitative measures are provided by third parties including the World Bank, The Economist Intelligence Unit, the OECD, and the United Nations.

The instrumental factors are combined with financial centre assessments provided by respondents to the GFCI online questionnaire. SCI 1 uses 1,508 assessments from 220 respondents.

SCI 2 Results

  • New York has taken first place in the index, with London dropping to second and Singapore retaining its third place.
  • Three of the top ten places in the ranking are taken by US centres, and three are taken by UK centres, with Oxford and Cambridge rising in this edition of the index.
  • The leading centres are strong across all three of the SCI dimensions - Innovation Support, Creative Intensity, and Delivery Capability.
  • Chinese centres do not feature as strongly as we might have expected, and score on average lower for Innovation Support than their overall rating.
  • The great majority of centres featured in SCI 2 are located in North America, Asia/Pacific, and Western Europe.

North America

  • Ten North American centres feature in SCI 2, and while New York rose one place to first, and Toronto rose two ranking places, other North American cities were overtaken in the index rankings.
  • Along with ranking first overall, New York also ranks first in each of the three dimensions which make up the SCI.

Asia/Pacific

  • Two of the 15 Asia/Pacific centres in the index - Singapore and Hong Kong - feature in the world top 10.
  • Hong Kong and Beijing rose in the SCI rankings, while other centres fell.
  • The majority of Asia/Pacific centres scored lower for innovation support, including regulation, than their overall ranking in SCI 2.
  • Some Chinese centres, including Shenzhen, which have strong technology ecosystems, do not feature as highly in the index as we might have expected. This may be because those rating Chinese centres know Hong Kong, Beijing and Shanghai better than other centres.

Western Europe

  • Twenty centres in Western Europe feature in the index, with London, Oxford, Cambridge, Zurich, and Geneva in the global top 10. It is likely that Oxford and Cambridge have benefitted from their close proximity to London, and we will look carefully at their position as the index develops.
  • The majority of Western European centres score higher for innovation support, including regulation, than their overall rank. This suggests that systems of public support for, and regulation of innovation and technology are a strength in the region.

Other Regions

  • Only six of the centres in SCI 2 are from other regions of the world - Middle East & Africa, Eastern Europe & Central Asia, and Latin America & The Caribbean.
  • Of these centres, new entrant, Tel Aviv, is rated highest in 11th place. Dubai, the second centre in this group rose 17 places to 17th.

Commentary

The Smart Centres Index focuses on financial and commercial centres across the world in relation to their approach to and delivery of innovation and technology, including Science, Energy Systems, Machine Learning, Distributed Ledgers, and Fintech, along with other applications.

All top 10 centres in SCI 2 are in countries with a high performing university sector across the fields of Engineering & Technology, and Mathematics, each having multiple universities rated in the top 20 worldwide in these subjects. A strong research and teaching base is important in building a technology and innovation culture.

An interesting point in the results is the high ratings of Oxford and Cambridge in the UK, which may highlight the importance of clustering, with these cities along with London forming a close network of academic and business development.

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