This article originally appeared in the World Economic Forum on March 5, 2025.
The rules of engagement for businesses are changing as the global economy undergoes a massive transformation. Geopolitical tensions, protectionist pressures and industrial policies are prompting companies to rethink everything from where they produce goods, how they recruit talent to how they grow their customer bases.
This transformation is shifting economic growth beyond North America and Europe to numerous cities in Asia, Africa, Latin America and the Middle East. The four regions now account for 45% of global gross domestic product (GDP), up from 33% in 2004, and 85% of the world’s population, according to the International Monetary Fund. They are expected to add 1.1 billion new city dwellers by 2040, or 95% of the increase in global population based on United Nations data.
Many of the most successful of these cities share similar characteristics, according to Oliver Wyman Forum’s new The Cities Shaping The Future report that rates the business attractiveness of 1,500 cities with more than 250,000 residents in Asia, Africa, Latin America and the Middle East.
Lessons from the world's fast-growing cities
While each community has unique history, culture and natural resources, the most successful cities are typically nearer to their trading partners. They also are investing in essential infrastructure, preparing for climate change and have the hotels, retailers and workforce to attract corporations and consumers.
Others can learn from these cities shaping the future.
A changing world
Emerging markets have been shifting for many years. What’s changed is the scale and breadth of the opportunity, which now extends well beyond megacities.
Companies eager to de-risk have reduced their exposure to China’s industrial cities and begun to manufacture in multiple countries. These strategies, often called "China+1" or "near-shoring", have resulted in a significant expansion of manufacturing options, especially for cities in Mexico and Vietnam, which together account for a third of the export champions in the Oliver Wyman Forum's report.
But they’re not the only ones that have experienced massive growth during the last several years. Dhaka, Bangkok and Tangier are just some of the other beneficiaries, and the 1,500 cities in the index now account for 51% of global merchandise exports up from 37% in 2003.
Location helps
While some of the most successful in the index are well-known megacities like Tokyo, Shanghai and Dubai, most are much smaller and have morphed in recent years into commercial hubs, mobility connectors and export champions like Ho Chi Minh City, Tangier and Bogota.
What drives success? Location helps, especially if it is near to an important market. Deliveries from Mexico are 20 days shorter than shipments from Vietnam to the United States, for example.
Similarly, Tangier, with only 1.4 million people, benefits from being near Europe. As a result, it has become an automotive base and one of Africa’s leading export hubs, with significant investment from American, European and Chinese multinationals. The city also has built crucial infrastructure, including Africa’s largest container port facility, and renewables to attract foreign investors seeking clean energy sources.
The clustering of industrial cities next to major logistics infrastructure also helps. For example, Ho Chi Minh City — ranked second as an export champion and 26th as a mobility connector — has captured a significant share of production leaving China thanks to its proximity to major ports and its access to nearby industrial peers, such as Bien Hoa and Thu Dau Mot. The cluster provides a deeper talent pool and opportunity to specialize. Companies can also source a wide variety of components nearby while reducing the need to import goods from China.
Mobility matters
Leading cities have strong mobility connections either to domestic or international travel, enabling business owners, employees and cargo to move easily around the country or world.
Bogota, ranked 37th as a commercial hub and 36th as a mobility connector, is the region’s air cargo industry leader. Positioned between North and South America, it is also a growing tourist destination.
Addis Ababa similarly has become a transit hub for travel between Africa and the rest of the world, with flights to more than 90 international cities, and a strong air-cargo sector that connects the continent with manufacturers. Improving connectivity domestically and internationally is critical to attracting greater foreign investment, especially in Africa, where intra-Africa flight capacity is less than intracontinental flights, according to an African Development Bank report.
Commercial hubs are multifaceted
The most successful commercial hubs are home to major listed companies, factories and hotels — signs of depth in the local economy.
Istanbul, for example, is ranked third as a mobility connector and 11th as a commercial hub with robust tourism, a strong industrial sector, popular retail and many of the country’s largest corporations based there. The historic metropolis welcomed 55 million visitors in 2023 and has more hotels than most cities in the index, including many upscale five-star brands. The city’s airport also ranks alongside Dubai and ahead of Hong Kong and Singapore in terms of passengers and cities served. The city’s 16 million residents support a thriving retail scene with well-known luxury brands.
The challenge for governments is to develop multiple commercial hubs to spread growth evenly across the country. Istanbul is Turkey’s largest commercial hub, but the country has other major commercial centres, such as Ankara and Izmir, which also have a strong corporate and retail presence.
Jakarta, by contrast, accounts for a much larger share of Indonesia’s commercial activity, and the government is working hard to develop mid-tier cities, including the country’s new capital Nusantara.
Climate resilience is fundamental
Many of the best performing cities are vulnerable to climate risks, including a third each of the export champions and commercial hubs. A World Bank study found that populations in East Asia are among the most exposed to climate-related hazards, while those in South Asia and Subharan Africa are similarly exposed but also highly vulnerable.
Dubai, for example, is ranked eighth as a commercial hub and fourth as a mobility connector in our report, but suffers from extreme heat, water scarcity and flooding. It is trying to address these challenges by rehabilitating coastal mangroves and developing advanced building cooling techniques.
Similarly, Shanghai, which is ranked first as a mobility connector, second as a commercial hub and third as an export champion, suffers from flood risks and typhoons. In response, it has invested heavily in a network of sea walls, draining systems and monitoring systems. While these cities are partly overcoming these risks by investing in resiliency, many others may find it more difficult to get the necessary investment.
How risk will bring opportunities for cities
In a world of fast-changing tariffs and increased geopolitical tensions, cities have more opportunities to shine and businesses more chances to spread across multiple countries.
But leveraging these opportunities requires investment, especially in mobility infrastructure, such as airports and seaports. Those cities that are doubling down on such infrastructure, such as Dubai, stand to benefit as multinationals seek to rebalance not only their supplier footprint, but also other types of activities, such as regional capability centres, and ensure they are both positioned for growth and protected against global risks.
Accordingly, the challenge for cities will be taking advantage of the opportunities and mobilizing the necessary capital to invest in such infrastructure, as well as nurture the workforces of the future that will support business growth.
The gap between leaders and laggards may grow in the coming years, especially as city governments must also grapple with the effects of climate change, but the opportunity is there for cities to grasp.