Ready for a Fight: Tel Aviv Expected to Increase Competitiveness by 2025

Tel Aviv's boost is attributed to improvements in categories such as human capital. institutional character and political accountability.

Tel Aviv is forecast to leap 16 spots by 2025 in its competitiveness ranking among world cities to claim 41st place overall in an index prepared by the Economist Intelligence Unit for Citigroup.

According to the report "Hot Spots 2025: Benchmarking the future competitiveness of cities" published Tuesday, New York is projected to remain the world's most competitive city with a 75.7 point score, followed in order by London, Singapore, Hong Kong, and Tokyo. The city forecast to improve its competitiveness ranking the most is Sao Paulo, jumping 25 places to the 36th spot. Madrid, meanwhile, is expected to tumble 28 places down to 46th in the rankings. Closing the list as the anticipated least competitive city is Tehran, Iran's capital.

Tel Aviv's boost from its current position is attributed to improvements in categories such as human capital (skilled labor force with convenient access to good health services and quality education, where it ranks 35th), institutional character (the level of planning, legislation, enforcement, tax collection, and political accountability, where it ranks 40th) and economic strength (the pace at which the city's economy is growing), where it has jumped to the 81st spot from 101 a year ago.

But Tel Aviv ranks highest, 20th overall, in the category of financial maturity: access to financing through the local banking system and efficiency of capital allocation.

"A firm and long-standing commitment to first-class education and universal quality healthcare underpins Tel Aviv's attractiveness," the report says. "Despite ongoing political and security concerns, the city remains open and tolerant, and its pro-business policies make it attractive to both businesses and people." EIU also points out that Tel Aviv's economy is growing at an average 3.8% clip, faster than that of many cities with a comparable income level.

It should be noted that the report refers to the greater Tel Aviv area, projecting a population increase of one million people in 2025, thanks to the city's attractiveness, bringing the total to 4.3 million people.

The study ranks cities based on their ability to attract capital, investment, foreign companies, human capital and and tourists. The 120 cities surveyed have a combined population of 750 million and account for nearly 29% of the global economy.

The large cities of North America and Western Europe will maintain their competitive edge over the next 12 years according to the forecast, despite aging populations and sluggish growth. The other cities closing out the top 10 are Sydney, Paris, Stockholm, Chicago, and Toronto. In addition to Sao Paulo, the Brazilian cities of Rio de Janeiro and Porto Alegre are also projected to substantially improve their competitive positions by 2025 while most cities in Africa are expected to continue lingering near the bottom of the list.

Aviad Bar Nes
David Bachar