Winning Global Markets: How Businesses Invest and Prosper in the World's High-Growth Cities

Chapter 1The Economic Power of Global Cities

Companies—midsize and large multinational companies (MNCs)—need to figure out where to sell their goods and services. In their home market, they must decide geographically where to plant their headquarters, regional offices, production, distribution, and sales management. Companies have to choose the right cities, because city advantage is more decisive for business success than national advantage.

As companies move abroad, they decide which nation or nations to produce and sell in and choose specific locations where they intend to carry out their administration, production, distribution, and sales work. If a company chooses to sell in China, where does it locate its headquarters for China? Will it be Beijing, Shanghai, Hong Kong, or any of a dozen other cities? And in each Chinese city where it plans to operate, the company needs to develop specific presences and locations. Choosing a pattern of locations around the world is a gigantic task that can make a major difference in the company's success.

Every nation contains a set of cities that differ in their importance and national and global reach. Some of the world's cities are bigger than many nations. The 2007 Greater Tokyo metropolitan region of 13,500 km² had 35 million residents. It was roughly equal to the population of Canada and larger than that of Malaysia, the Netherlands, and Saudi Arabia.¹ Other megacity regions include Shanghai, Beijing, Mumbai, Delhi, New York City, ...