HWWI/Berenberg City Ranking: Frankfurt remains top town
- Munich just beaten
- Bonn and Düsseldorf in third and fourth
- Essen and Stuttgart improve strongly
- Chemnitz stays bottom
Hamburg/Frankfurt. For the third time after 2010 and 2008, the 30 biggest cities in Germany have been analysed to determine their sustainability. “The dynamic development of big cities is important for the prosperity of a region. So their success is a major factor in ensuring that the country remains competitive,” says Dr Hans-Walter Peters, spokesman of the managing partners at Berenberg. The finance and services centre Frankfurt am Main successfully defended top spot in the City Ranking just released by Berenberg and the Hamburg Institute of International Economics (HWWI). Munich follows hot on the heels of the city on the Main, while Bochum and Chemnitz are propping up the table.
“Successful cities are characterised by their ability to attract companies and people with their locational advantages. Their success depends above all on how well they manage the structural change in their economies towards knowledge-based service sectors and research-intensive industries,” is how Peters explains the conditions for future-oriented, urban development in the 21st century.
The cities were analysed with regard to their present economic performance, the location factors of education, innovation, internationality and accessibility, and their future demographic trends. In this context, economic and demographic trends have mutually reinforcing effects. Prospering cities attract workers, which has a positive influence in their ability to continue prospering. Companies in knowledge-based industries find a larger pool of highly qualified workers in cities, as most universities and research centres are located in urban areas. “Regional conurbations boost interaction as well as the division of labour and specialisation in the knowledge economy, which has a positive impact on socio-economic development,” comments HWWI Director Professor Thomas Straubhaar.
For the third time in a row, Frankfurt am Main and Munich form the leading pair among the 30 cities analysed. Frankfurt scores particularly well in the location factors, but is no less successful in population or employment trends either. The city stands out as an international, innovative services centre with a high proportion of highly skilled employees (18.7%). Frankfurt is in third place in the knowledge-based industries, which account for 41.6% of total employment in the metropolis. The share of international students is highest in the city on the banks of the Main, and the financial hub also achieves second place behind Munich in the proportion of foreign employees.
Mayor Peter Feldmann has this to say about the repeat accolade for Frankfurt: “The most important issue is not which city rakes in the most in trade tax or has the best employment rate. What matters most is how well the cities and regions perform in the long run in the contest for skilled workers and innovative, future-looking industries.” The city also scores well with outstanding infrastructure. In terms of accessibility, it came in first on account of its ideal geographical location coupled with its position as an international aviation hub.
The Bavarian state capital, Munich, similarly achieved very good results in all areas, once more managing to close the gap on Frankfurt. “Munich gained again between 2005 and 2011 notably in population development with growth of 9.4%, raising hopes that the Bavarian city can take over at the top of the table at some point in the future. Its economic attractiveness is also seen in the proportion of workers in knowledge-based industries. Munich boasts the second-highest rate for this at 48.1%,” states Straubhaar.
The former capital of West Germany, Bonn, has gained one place in the City Ranking, thanks above all to its good performance in terms of demography and economics. At 9.8%, the third-placed city achieved the biggest gain in employment during the period to 2010 and is one of the cities with the highest labour productivity. Alongside Bonn, Düsseldorf and Cologne in fourth and sixth place respectively are other cities with positive growth prospects along the River Rhine.
Compared with the 2010 City Ranking, the good socio-economic developments in Essen (up from 21 to 10), Stuttgart (up from 16 to 9) and Mannheim (up from 23 to 17) should be highlighted. Essen’s good performance is explained by a positive employment trend (5.4%) coupled with an above-average increase of 7.7% in productivity, which can be attributed primarily to the positive development of the energy sector in the region. At the same time, the population of Essen declined by two percent. Stuttgart stands out as an internationally minded, knowledge-based city: the capital of Baden-Württemberg boasts the highest proportion of employees in knowledge-based industries at 48.9%, with education levels correspondingly high. Stuttgart scored the best figure for proportion of workers with university degrees, at more than 22%.
Also worth highlighting are the positions of Berlin (rank 5) and Dresden (rank 7). Berlin in particular has improved constantly since the first HWWI/Berenberg City Ranking. This trend stems from a strong rate of increase in population and employment (up 9% between 2005 and 2010). “The motor of growth is running smoothly in the capital; locational advantages like education and innovation, internationality and accessibility have constantly improved in the ranking. So it is fairly safe to assume that the German capital will feature regularly in the top five cities going forward,” predicts Straubhaar.
Bochum and Chemnitz are found at the bottom end of the list. Above all, they have deficits in location factors like internationality, education and innovation. The demographic trend can also be described as unfavourable, which in turn has a negative effect on the potential for economic development. These cities have not been able to improve their positions at the lower end of the rankings. They are continuing to lose inhabitants and creating very few new jobs either.
Over recent years, the biggest German cities have enjoyed economic development ahead of the national average, with the 30 cities emerging from the upheavals of the recent financial and economic crises in better shape than Germany as a whole. Nonetheless, some of the cities have not yet fully completed the structural change towards knowledge-based service industries, including cultural and creative segments, and research-intensive industries. “Consequently, there is a risk that the gap will widen between the dynamic and economically successful cities on the one hand and the cities that have to overcome deficits and population loss,” summarizes Berenberg’s Managing Director Peters.
Area: Berlin is the biggest city with 3.5 million inhabitants; Kiel is the smallest city in the ranking with 242,000 inhabitants.
Population density: At 4,436, almost five times as many people live in Munich per square kilometre than in Münster (963).
Location: Only four of the major cities analysed for the City Ranking are located in eastern Germany, whereas North Rhine-Westphalia alone has 13 such cities.
Population growth: The largest number of inward migrants (2005 – 2011) moved to Berlin (115,000), Munich (105,000) and Hamburg (67,000). Gelsenkirchen has lost 4,410 inhabitants.
16 individual indicators were analysed in three categories for all the cities considered. These three categories are incorporated in equal measure in the overall ranking:
The trend index combines the current trends in the population, employment and productivity.
The location index takes account of the location-dependent factors of education and innovation, internationality and accessibility.
The demography index covers factors that reflect the demographic trends through to 2025; average fertility rates are also taken into account.
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