Innovation and environment are the two key factors that helped Cape Town boost its position to 438 in the 2020 Schroders Global Cities Index, 20 places higher since the publication of the 2019 index. Photographer: Ayanda Ndamane/African News Agency/ANA
Innovation and environment are the two key factors that helped Cape Town boost its position to 438 in the 2020 Schroders Global Cities Index, 20 places higher since the publication of the 2019 index. Photographer: Ayanda Ndamane/African News Agency/ANA

Cape Town’s innovation helps it leap 20 places in Global Cities Index

By Philippa Larkin Time of article published Apr 14, 2021

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JOHANNESBURG - INNOVATION and environment are the two key factors that helped Cape Town boost its position to 438 in the 2020 Schroders Global Cities Index, 20 places higher since the publication of the 2019 index.

About 900 cities make up the index.

The improved ranking was the result of a significant increase in Cape Town’s innovation score from 4.3 to 5.3 and a strong environmental score of 7, Schroders said yesterday in a statement detailing how the Mother City improved its scores.

London was first, followed by San Francisco and Boston.

The Schroders Global Cities Index is based on four metrics called impact scores: economic, environmental, innovation and transport.

Hugo Machin, the portfolio manager and co-head of global cities at Schroders, said: “The Covid-19 crisis has had a profound impact on global cities. With many people forced to work from home during the pandemic, office owners will now have to compete even more aggressively for customers. Improved broadband speeds and communication platforms, as well as the rise of flexible office providers, threaten traditional landlords.

“When the global pandemic subsides, cities will remain centres of innovation and entertainment. The best cities will continue to evolve, encouraging the development of open space and greener buildings. Human settlement requires planning, and the majority of employment requires human interaction and the sharing of ideas. Cities that understand this will be best placed to thrive when competing for talent and capital.”

Schroders said the innovation score was linked to the ranking and quality of educational institutions.

According to the QS World University Rankings, the University of Cape Town ranks among the top 200 universities in the world and is the top university in the African region.

The score was also improved by the University of Western Cape and the city’s proximity to Stellenbosch University.

The environmental impact score was determined by a city’s physical risk, well-being risk and policy risk, it said.

Cape Town’s environmental score was driven by a particularly high physical risk score.

“It should also be noted that given South Africa’s energy generation mix (coal accounts for around 70 percent of installed generation capacity, producing around 429.97 million tons of CO2 per annum), Cape Town’s relatively poor environmental score is understandable,” it said

The economic impact score was driven by population growth, gross domestic product, median household disposable income and retail sales.

Of the factors considered within the economic impact score, Cape Town scored the highest within the population growth category. The city’s population had experienced a steady growth rate of 2 percent since 2015 to about 4 709 990, Schroders said.

But Schroders highlighted that there were high levels of inequality, with the top 20 percent of the population holding more than 68 percent of income, while the bottom 40 percent of the population held 7 percent of income.

For the first time, the index had introduced a transport score, with a particular focus on mass transit systems, and Cape Town attained a score of 5.4 for its transport infrastructure.

“The city’s transport score was driven by the accessibility and quality of its port and airport facilities. The city’s major airport, Cape Town International Airport, is ranked the second-busiest airport in Africa, and the port of Cape Town is situated along one of the world’s busiest trade routes and is the second-largest container port in Africa,” Schroders said.

It said the average one-way commute in Cape Town took about 40 to 50 minutes, but the transport score was brought down by the quality of its rail network.

“This, combined with the low median disposable income of the city’s population and unsustainable cost of the rail system, has led to the vast majority of passengers to shift to the road network. The deterioration and lack of use of a rail transport system is inextricably linked to economic quality of a city, as it limits job accessibility and the ability to move goods and data efficiently and cheaply,” it said.

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