Can a city be a magnet for talent?

There’s been much speculation about how much Brexit is influencing corporate location choices, something I was interviewed recently about on Bloomberg TV. Financial services companies, in particular, have been in the spotlight about their plans to change or not change their headquarters.

For many businesses, the uncertainties mean they’ve been in a holding pattern, waiting to see where things land before acting. They know that a smart location choice means the opportunity to access new customers and talent; but get it wrong and much more could be at risk.

However, putting aside the political climate, what are the other important reasons for companies to choose one city over another?

Certainly, tax or regulatory incentives can make a city more attractive, and it’s incumbent upon business leaders to analyse those carefully. But I believe a company’s primary focus has to be its people. Is a city liveable and does it have a strong talent pipeline that will nurture growth for years to come? These are crucial questions to ask when considering locations.

Cities through different lenses

?Being in the business of cities, at JLL we spend a lot of time studying what makes them tick. In our new report, the City Momentum Index (CMI), we track a broad range of factors to identify those cities that possess the attributes for success, looking through the lenses of both real estate investors and corporate occupiers. The 2018 edition focuses for the first time on two separate elements of city dynamism: short-term market momentum and 'future-proofing' for longer-term success.

When we look at long-term success, it’s the largest and most globally-connected cities that feature – New York, London, Paris and Tokyo. These are places with economic might and cultural power, and they also have that hard-to-define buzz and energy that even city experts find hard to quantify.

When we look at those that have short-term dynamism, it’s Asia Pacific cities that dominate with Hyderabad, Bangalore and Ho Chi Minh City taking the top three spots. These are cities that are growing fast, but must contend with the infrastructure, regulatory and environmental strains that go along with rapid development.

In our study, we found that mid-sized metro areas are able to leverage their strengths in education, liveability and sustainability – places such as San Diego, Melbourne and Stockholm - allowing them to punch above their weight in attracting talent.

Recipe for success?

Overall, we identified only two places that stand out as being in the ‘sweet spot’ of both short-term momentum and long-term success: Singapore and Seattle. These geographically disparate cities have a prized combination of liveability, business-friendliness and a focus on innovation that helps them to attract talent and retain it. So is that the secret recipe for city success? Those ingredients help but, as with most things, it’s not that simple.

We live in an era where cities compete with each other for both people and capital, but there are many different ways they can succeed. Berlin, for example, is increasingly becoming a hub for young fintech entrepreneurs; the Estonian capital Tallinn is making a name for itself in software development; while Austin in the US is raising its profile as an education and R&D centre.

Equally, a city with a cosmopolitan, urban lifestyle can help a business attract young talent, while a strong education system and good environmental profile can help companies retain people at later life stages.

What is evident is that different cities attract different types of businesses and different types of talent. The smart ones are those that recognise their niche and capitalise on it.