Hub Culture 2013 Zeitgeist Ranking

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17th Feb 2013

The new normal is old news.  The 2013 Hub Culture Zeitgeist Ranking arrives with tectonic shifts in our 7th annual ranking, showcasing a range of trends bubbling to the surface in the global economy. Hubs in Brazil and China have dominated in recent years, but are facing headwinds as perspectives shift around power, future influence and value for money.  At the same time, old power centers like London, Hong Kong and New York are demonstrating resilience that should not be ignored, just as new cities are working hard to capture the limelight.

This year's top spot goes to London, which is still riding high following last year's successful Olympics.  The London dip (or crash) that many predicted post Olympics has not materialized, as Europe's unofficial capital works hard to leverage all that investment to its long term advantage.

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1. London (2012 Rank: 5)

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London today could best be described as post-coital.  The signature events of the last couple years have changed the psyche of the city, and similar to lying on your back after a marathon session, the city feels fully sated.  While the economy remains generally gloomy London remains the least ugly of her European sisters, and youth are still flocking to the city in search of opportunity.

In civic society, a grand experiment is underway with unprecedented partnerships emerging between government and the tech community to hack civil services. Efforts to support startups, drive innovation and generally rethink how a city operates are beginning to bear fruit, with a sense that London is large enough to blend its own take on Silicon Valley and Wall Street in one place, on its own terms.

On the foodie front, London has become the mecca for new flagship concepts. From luxe Asian outposts like Bo London to the Russians that created midrange Burger and Lobster, to fast & fresh Wasabi, Itsu and Leon (which have all taken off like rockets in the last year), London has uniquely combined private equity funding and scalable food innovation, a result no one would have predicted in a land known for such blah food. 

Add in rickshaws, ever later central London opening hours, new overground lines reducing congestion, all that foreign real estate money, and the resilence of the finance sector.  Sigh - London truly is the spot, for the moment.

2. Hong Kong (2012 Rank: 2)

Hong Kong remains near the top of our list this year because aside from that nasty air, it remains the best place to live in Asia.  Dynamic, entrepreneurial, fun and youthful, the city remains the pearl of Asia.  While all of Asia is "hot", one thing that sets Hong Kong apart is a relatively diversified economy - from fashion to finance, manufacturing to real estate, there are many types of people sitting next to you at that shiny deluxe mother-of-pearl bar on Wyndam Street. 

The latest addition to the career list is art - with the transformation of the Hong Kong Art Fair into Art Basel Hong Kong, the city has cemented its position as the leading spot for contemporary art in Asia, and the arrival of galleries like White Cube and Guggenheim last year are now paying dividends to the cultural life of the city. Basel beware, May in Hong Kong is swiftly becoming the can't miss global destination for the art traveler.

3. Miami (Returning, 2005 Rank: 1)

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Miami was hit hard by the 2008 crash and has not featured on this ranking in many years. Much of the DNA about this ranking is sensing activity as it emerges, and in that regard, Miami is white hot.  Core to the revival has been the return of profitable real estate development in Miami. Prices having recovered from the crash and demand is on the uptick - Miami is back in business, and the construction cranes are swinging. 

Over in the design district, Bernard Arnault's huge recent investments are driving a flood of luxury investment into the city core, recalibrating the balance of lux retail power from Brickell to Bal Harbour. Even Richard Florida agrees that is a harbinger.

Miami today is probably the most internationally minded city in America, almost beyond the left/right divide plaguing the rest of the country.  With a growing sophistication that should be the envy of all, its also simply beautiful.  After years of doldrums, the idea that business, brains and beauty can mix is something that should resonate with everyone.

4. São Paulo (2012 Rank: 1)

São Paulo has been at the top of this ranking the last three years, and while the city remains completely exciting and dynamic, the soaring Brazilian currency has finally caught up to the city. São Paulo today is super expensive, and the facilities and the services found there just don't match the current pricing.

Brazil at large remains enticing, and São Paulo remains the economic engine, but the sense of a city on the rise has been replaced with the fact the city is simply overpriced, due to exchange rates beyond its control. This is making it harder for anyone to invest and innovate, and slowing things down in Brazil's capital.

5. Seoul (Returning, 2007 Rank: 12)

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Getting that K-pop look just right...
Three things are driving Seoul's return to this ranking: technology, pop culture and art.  All three are related, and they showcase Seoul's unique position as a national microcosm.  Over the last 24 months, the world switched to Samsung as its mobile darling (56% global smartphone market share) just as the West discovered K-Pop - combined they represent a bigger Seoul fingerprint on important fulcrums of youth culture.  

Less discussed is Seoul's propensity for supporting artistic talent - nuturing a range of artists that are gaining attention in international circles through a network of galleries growing in stature.

Watch - this is the year Seoul transforms its reputation as a producer of technical hardware to a viable producer of exported cultural content - producing a new view on globalization and entertainment in its wake. This partly results from the population's access to lightning fast internet services that are the envy of all. Finally, did we mention Seoul has the 2nd largest metro population in the world?

6. New York (Returning, 2012 Rank: 6)

Last year it became obvious that nothing happens until it happens in New York, as Superstorm Sandy made the average American suddenly and viscerally aware of the potential impact of climate change, the role of government in disasters, and just how limiting the NYC media bubble can be. Fast forward a few months and we see a city that bounced back very quickly with a renewed sense of community involvement not seen since the dark days after 9/11.  

Meanwhile, gentrification in the city's outer burroughs is creating a new roster of desirable neighbourhoods as rent in Manhattan goes through the roof - up 25% in one year, and suggesting that the city is ever more desirable for the rest of us.  Its a sure sign the city is back in the swing of things, even if no one can afford anything but wine and cupcakes at Sweet Revenge.

7. Rio de Janiero (2012 Rank: 12)

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Like São Paulo, Rio feels too expensive these days, but boy is the city on a swing! Real estate is through the roof as the city builds for the upcoming 2014 World Cup and the 2016 Olympics, but there's still lots of opportunity to innovate in one of the world's most beautiful urban areas.  

Rio is simply in a great mood - pacification of the communidades appears to be working, there is a great sense of community spirit, and an optimism about Rio's place in the world.

The integration of the communidades more into the celebrated life of the city is not without its troubles - some of these places are even experiencing a form of lightning gentrification as they become more safe, sparking investment funds to move in and swoop up the best views and locations.

But while this displaces some, it injects much needed development into these places, and neighborhoods are benefiting.

The feeling that Rio is preparing to not just host, but to lead, is palpable.  Rio has so much to offer, and it has no intention of letting up anytime soon.

 

8. Tokyo (2012 Rank: 12)

Tokyo climb in this year's ranking is completely linked to Japan's new government and the Bank of Japan - which is actively working to inflate the economy with loose monetary policy.  The result is global headlines about a coming currency war, with responsive inflation coming from the Euro zone, America and even China.  The reality is that Japanese companies have had it hard trying to export similar technology and products compared to cheaper rivals in South Korea and China, and they are finally fed up with their Yen handicap.  

As the government takes no prisoners in its attempt to reinflate the Japanese economy Tokyo's actions are having repurcussions everywhere.  

This slow motion currency time bomb could be the trigger for increasing inflation in the West tied to rising interest rates, which will have a huge impact on corporate spending related to pervasively high debt levels.  While hedge funds and bankers have been expecting this for some time, its interesting to see that Tokyo has actually set these changes in motion. 

9. Istanbul (2012 Rank: 9)

Istanbul is doing better than ever.  While the economy continues to bubble, a better educated, smart phone enabled population has begun interpreting the Istanbul lifestyle in new ways.  People are starting businesses everywhere, and the sense of optimism among youth is striking, especially compared to Turkey's European neighbors.  Istanbul is all about design right now, and whether that is an architectural renovation or a high fashion collar, they're doing it their own way.  Right now Istanbul is the place to go if you're looking for new perspectives and new ways of doing things, and its still relatively inexpensive.  

10. Berlin (2012 Rank: 4)

Nothing much new to report out of Berlin, its the same story: inexpensive, innovative, start-up center, and economic rotweiler to southern Europe.

Berlin is less of the high-tech secret it once was and the suits have a greater share of voice in the city's cutting edge approach to life than they once did, but that doesn't really matter - like London, Berlin remains a youth mecca and has more to offer on a shoestring than almost anywhere in Europe.

Previously at the top of the ranking for a number of years, it may be slipping as the Berlin story becomes old news, and its secret benefits become openly known, but Berlin is still hands down the coolest spot for youth on the Continent.

 

 

 

11. Moscow (2012 Rank: 19)

Moscow hits 2013 on an up note as Russia prepares to host the world at the XXII Winter Games in Sochi, situated south along the Black Sea.  This is forcing some level of posturing by Moscow with a slightly friendlier and more open attitude than we've seen in some time.  There's a big disconnect in progress between Russian politics and Russian contemporary culture: the cash speaks for itself, and the city remains flush with commodity revenues and a high tide of investments making the city more attractive to residents and foreigners alike.  

While Moscow isn't the first place we'd recommend to build a start-up, there is an widening network ecosystem of funding and innovation combined with strong engineering talent.  

Russia in general, and its rich entrepreneurs on the global scene in particular, are doing a lot to raise the city's profile and engagement - from party venues at Davos and the Olympics to increasing confidence and trust with global partners, the sense is that some Moscovites get how things run, and are making big strides to engage outward.

12. Beijing (2012 Rank: 4)

Not much new to report out of Beijing: the city continues its breakneck development, and if you can survive the pollution and the traffic, its a crazy interesting place to be. While there are signs of all that development starting to fray, the quality of investment and scale of local projects are continually improving.  There's so much money pouring into Beijing in an effort to fatten the local economy, build services and accomodate rural to urban migration that they simply rebuild whatever falls apart: bigger, better, bolder.

13. Delhi (New)

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Delhi hits the list under less than auspicious circumstances, as India grapples with a cultural seachange around women's rights that reflect a strong worldwide trend around developing world women's rights and grass-roots protest for those rights.  It says a lot when the first word that appears on a google search for your city is "rape".

Protests and soul searching in the wake of violent attacks on women have recently defined Delhi's place on the world stage, and the public reaction to these violations represents some kind of shift in the cultural awareness of the population.  

It is as if Delhi has been a catalyst for a wide 'waking-up' occuring across the urban developing world about these issues, and that's a good thing.

 

14. Singapore (2012 Rank: 8)

Asia's garden city slips this year, purely because its been a bit quiet.  Confident, rich, and increasingly resembling a jungle playground, Singapore has made huge strides in quality of life for its people and regional influence at large.  With major architectural plays now open and operating smoothly, the city is focusing more and more on itself, and its voice in the international community feels a little quieter than it has in the past.  Maybe for Singapore a little silence can be golden. Speaking of golden - guess where everyone is quietly stockpiling their gold these days.

15. Stockholm (Returning, 2011 Rank: 2)

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The Nordic model is gaining new attention as the US and Europe struggle to manage the conflict between societal costs and benefits that bedevil many a budget.  Stockholm sits at the smug apex of this discussion, deftly balancing high taxes with a high quality of life, great social services and a largely content populace.  

Somehow a city this small continues to export world-changing technology and innovation, producing a larger shadow than it should, but maybe that's what happens when a social safety net allows one to think about changing the world, instead of just surviving in it.

The other thing is film: Swedish film is very hot right now, with LA executives deplaning to buy up rights to Sweden's cinematic output.

 

16. Cape Town (2012 Rank: 11)

Cape Town was named the World Design Capital for 2014 and is now busy trying to live up to moniker, with a raft of new projects designed to transform life through design. Regardless of whether that is truly successful, Cape Town is the anchor for African lifestyle at its best, and it is now serving as distant basecamp for the booming economies to its north - Namibia, Angola, and Botswana.  

Since the closest world city due north is Luanda - over 3500 kilometers away, the regional relevance of Capetown continues to grow as a regional HQ for Africa, the largest 'potential' growth market in the world. From an epicurian standpoint, the Cape is in a league of its own, and increasingly thought of as Africa's Napa Valley, with a commiserate level of associated prestige.  Year ahead: Up.

17. Shanghai (2012 Rank: 15)

The thing about Shanghai is that by all rights it should be at the top of this list, but somehow lately it keeps missing out.  Is it because China has so adeptly created its own insular internet universe, where its citizens, and by extension its cities, are missing out on the ongoing global social media conversation? Compared to other cities of its size and stature, Shanghai simply isn't visible, or participating in, these conversations - and that tight control is choking the global voice of a place that is dynamic and exciting, and by all rights should be contributing way more to global influence.

18: San Francisco (2012 Rank: 16)

App CEOs to San Francisco are like actors to Los Angeles - lately it seems everyone you meet is doing the startup gig, which makes it all a bit boring and predictable.  While the great die-off of underfunded startups with not-very-original ideas is yet to fully materialize, San Francisco remains the best destination for capturing capital and share of mind in the nearby, all powerful Silicon Valley.  Anywhere capital and talent are so concentrated is going to produce results, even if the circumstances around that process are less interesting than they once were.

19. Panama City (New)

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Guess which city is enjoying the highest growth rates in Latin America? At 9.5% last year, Panama City is on a roll.  So it seems Panama has something more to offer than 1,000+ offshore islands and beaches on which to roast your buns.

Traditionally a city that everyone passed through, Panama City has recently enjoyed investment darling status unrivalled by anywhere else in the region. Like Chile, Peru and Colombia, Panama is attracting investment as others look to replicate the success Brazil has enjoyed over the last decade.  As the regional finance hub for Central America, Panama City is well positioned to benefit from the region's accelerating growth spurt.

While not a particularly large city, Panama City encompasses the move away from BRICs as the best emerging investments, and shows that smaller players are attracting ever more attention. Plus, American retirees love it. But from a lifestyle perspective, 1,000 islands!

 

20. Madrid (Returning, 2008 Rank: 16)

The cool thing about Madrid right now is the sudden arrival of a true underground scene - something not witnessed in Spain for a long time.  With 50% youth unemployment and a general weariness of austerity, the city's young people are busy creating a new alternate universe! From secret apartment restaurants to guerilla fashion makers, pop-up club parties to diva drag races, Madrid right now is all about the private list and underground invitation - and that has the potential to spark a creative boom not unlike Berlin 15 years ago.  Here's hoping: from destruction something new always blooms.

A record number of cities fell off the list this year, including: Los Angeles, Abu Dhabi, Dubai, Seattle, Mexico City, Sydney - representative of a number of shifts in our collective attention.