Sharp-Elbowed Cities.(World Affairs)(Asia and Europe overtake US in commerce hub creation)

Why Europe and Asia are overtaking America in the race to create new hubs of world commerce.

The network of major global cities--seats of commerce and finance--has been expanding dramatically. Back in the 1980s when globalization took off, only New York, London and Tokyo functioned as "global cities," places that could act as bridges between vast emerging global markets and national economies. Today, there are more than 20 major global cities and about 50 minor global cities. A new study released in June by the MasterCard Worldwide Centers of Commerce compares how these cities perform as global hubs, shedding light on city evolution. The biggest shift is the ascendancy of Asia and Europe relative to America.

The study looked at rankings of the world's 75 most competitive cities, identifying more than 70 cities that function as either major or minor global hubs for commerce and finance. The cities were ranked based on 100 factors, measuring things like the efficiency of political and legal systems, the number of days it takes to open a firm, the livability of the city and its global "brand" recognition. The 2008 study shows that over the last two years Europe has risen in the rankings, with new cities rising alongside the traditional powerhouses of London, Paris and Frankfurt, Germany, and often displacing U.S. rivals. Europe now claims seven of the top 15 cities, compared with just two U.S. cities, New York and Chicago. Madrid went from 16 to 11 and Amsterdam from 11 to 10, while Los Angeles fell from 10 to 17 and Boston from 13 to 21. Copenhagen rose from 15 to 14, and Zurich jumped from 19 to 15. Over this same period, Asia has strengthened its hold on four places in the top 15, anchored by Tokyo (No. 3) and Hong Kong (No. 6), and with Singapore rising from sixth place to displace Chicago at No. 4, and Sydney rising from 14th place to 12th.

The rise of Amsterdam and Madrid reflects the broader emergence of small cities, often in small countries, as significant platforms for global firms and markets. All major U.S. cities still score high on macro measures of legal, political and business conditions, but Stockholm, Singapore and Copenhagen do even better. On factors such as "ease of doing business," the ...