Thirty-five years ago, Ho Chi Minh City was an economic backwater with a per capita gross domestic product (GDP) of a few hundred dollars. Market reforms and free-trade agreements kickstarted the city’s economy in the early 2000s, and recent geopolitical tensions have made it a major destination for companies seeking alternatives to manufacturing in China. Multinationals like Adidas, Samsung, and Unilever now source from Vietnam’s commercial capital.
Ho Chi Minh City is far from alone. Nationalist economic policies are forcing corporations to rethink where they make and source goods, while demographic shifts are fostering the rise of new centers of production and consumer demand.
These forces can be seen most dramatically across Asia, Africa, Latin America, and the Middle East. These regions account for 45% of global GDP and 85% of the world’s population. They also are home to over 1,500 cities with populations greater than 250,000 — more than three times the number in Europe and the United States combined.
How we rank these cities
Given the scale of the opportunity, the Oliver Wyman Forum is introducing a new Cities Shaping The Future index, a must-read for companies eager to promote future growth. We use a combination of geospatial analytics, machine learning, and alternative data such as factory locations or corporate headquarters to compare the strengths of 1,500 cities, and rank them in four categories:
- Export champions benefiting from shifts in global supply chains
- Mobility connectors that facilitate the movement of cargo and people
- Commercial hubs with vibrant corporate, industrial, retail, and hospitality sectors
- Climate resilient cities with less exposure to or greater ability to mitigate risks such as flooding and extreme heat or weather
Export champions
Vietnam has gained a greater share of world exports than any emerging market since 2018. With a young population of 8.2 million and some of Asia’s largest container ports, Ho Chi Minh City has become a prime alternative to China’s big industrial hubs. It ranks second to Shenzhen as an export champion, and its growth has cascaded into the nearby cities of Thu Dau Mot and Biehn Hoa, which also rank in the top 10.
Elsewhere, ninth-ranked Tijuana is just a 19-mile drive from San Diego and has attracted investment from electronics companies like Medtronic, Foxconn, and Qualcomm.
The mobility-commerce nexus
Broad-based commercial success demands first-class connections. Consider how Dubai built a global entrepot around a state-of-the-art airport and other transport infrastructure and inspired similar strategies by Doha and Riyadh.
The symbiosis between mobility and commerce exists in every region. Istanbul exploits its rich cultural heritage and location at the crossroads of Europe and Asia with extensive flight connections and hotels, attracting 55 million visitors in 2023. It’s also home to the country’s major conglomerates and a vibrant retail sector that attracts global brands.
Mumbai and Jakarta play a similar role as the well-connected commercial capitals of two of Asia’s fastest-growing countries, India and Indonesia. Both rank among the top 20 commercial hubs and mobility connectors.
The climate challenge
The Los Angeles wildfires are just the latest reminder that every city and business should think of ways to improve their climate risks. Singapore, our top-ranked climate resilient city, is expanding mangroves and investing in stormwater retention basins to address flood risks, while tenth-ranked Almaty’s location in southern Kazakhstan is relatively unexposed to storms, flooding, or excessive heat.
Others aren’t so fortunate. Chennai ranks among the top 5% of export champions, mobility connectors, and commercial hubs, yet the coastal Indian city faces the risk of typhoons and storm surges from the Bay of Bengal and shortages of potable water because of sprawling urbanization. The city has invested in storm drains, new pumping stations, and desalination plants to mitigate those risks.
The aviation industry should be celebrating, given the surge in passenger traffic, but many airlines are finding it hard to meet the rising demand because of continuing production challenges at global aircraft manufacturers. That's likely to mean more crowding and higher fares for business and leisure travelers.
More than 5.2 billion passengers are expected to take to the skies this year, up nearly 7% from 2024, but commercial aircraft production continues to lag far behind pre-pandemic levels. Manufacturers completed only 1,300 airliners last year, well below the peak of 1,800 set in 2018, and output is projected to be little changed again this year, according to Oliver Wyman’s Global Fleet and MRO Market Forecast 2025-2035. The backlog of unfilled aircraft orders stands at a record of more than 17,000, which will take as many as 14 years to clear.
Supply chain problems, inadequate investment in new capacity, and labor shortages continue to hamper manufacturers’ ability to ramp up production. Regulatory scrutiny also plays a role. The US Federal Aviation Administration imposed a cap on production of the 737 MAX airliner after a door plug fell off a 737 MAX 9 just after take-off in January 2024, and the discovery that contaminated titanium powder was used in aircraft engine parts has resulted in hundreds of aircraft being taken out of service at various times for inspection.
These production hurdles are forcing airlines to fly their jets for more hours per year and beyond their normal retirement age. Aging fleets also mean significantly higher maintenance, repair, and overhaul (MRO) costs than carriers had anticipated.
The increasing reliance on older aircraft is taking a toll on fuel efficiency. Where typically airlines experience efficiency gains of 1.5% to 2% a year, the International Air Transport Association reported that airlines recorded no improvement in 2024. That hurts both bottom lines and decarbonization efforts. Coupled with rising MRO expenses and inflation, these new hurdles for airlines are expected to translate into higher airfares for passengers.
Europe has a big plumbing problem in its securitization markets. The process of transforming a bunch of smaller loans and assets into larger, tradable securities can play a crucial role in channeling credit to new projects — if only Europe will seize the opportunity, Oliver Wyman Vice Chair Huw van Steenis argued in a recent column in FT Alphaville.
Consider the financing of data centers and solar power. Since 2018, US institutions have securitized nearly $60 billion of debt backed by those key growth activities, according to JPMorgan, while the European Union has seen only a single transaction, raising a modest €230 million for residential solar power. If Europe can’t even finance such strategic assets, what hope is there for midsized businesses or a broader array of assets?
A trio of landmark reports by Mario Draghi, Enrique Letta, and Christian Noyer have recommended reforms to unclog the EU securitization process, and recently released comment letters highlight four important valves policymakers could jiggle to get things going.
First, EU authorities could relax the punitive Solvency II capital requirements on insurers’ holdings of securitized assets. They are a big reason why Europe’s life insurers put only 0.33% of investment assets in securitizations, compared with roughly 17% for their US counterparts, according to a letter from Apollo Global Management.
Other suggestions include streamlining the overly prescriptive rules for so-called simple, transparent, and standardized securitizations, simplifying rules on so-called true sale securitizations, which enable banks to offload loans completely and conduct fresh lending; and simplifying costly and sometimes duplicative due diligence requirements. Better rules on true sales securitizations alone could potentially unlock more than €1 trillion in additional financing, according to Apollo’s estimates.
The EU has been talking about a capital markets union for over a decade, but periodic tweaks have failed to grasp the nettle. Willingness to unclog the securitization market will be a litmus test of Europe’s determination to recalibrate regulations for growth.
“There were crises to deal with in the ’90s but that wasn’t managing outrage, that was crisis management. Now the whole environment is a storm. You can't take a firefighting approach to it. You have to build resilience into your business model and think deliberately about power and how you get things done.”
- Karthik Ramanna, Professor of Business and Public Policy at Oxford University and author of “The Age of Outrage: How to Lead in a Polarized World,” in conversation with Oliver Wyman Forum Partner Rupal Kantaria.
A selection of informative and stylish reads on business, technology, geopolitics, and beyond, from leading publications around the world.
- Trump and the End of American Soft Power - An essay on the state of and prospects for US soft power by the foreign policy expert who coined the phrase.
- Researchers Surprised to Find Less-Educated Areas Adopting AI Writing Tools Faster – A Stanford University-led research team finds that AI writing tools are used at a higher rate in US regions with lower educational attainment, suggesting they may be serving as “equalizing tools.”
- Can Ukraine – And America – Survive Donald Trump? – An in-depth interview with Hoover Institution historian Stephen Kotkin on the tortured history of Russia-Ukraine relations, what Trump gets right and wrong about the war, and potential implications for US-China relations.
- Why Composers Want to Write Operas for Children – European composers are embracing this trend, particularly in Vienna, because it frees them from the pressure of the avant garde and lets them embrace their inner child.
- China’s AI Boom Is Reaching Astonishing Proportions – The buzz around AI startup DeepSeek’s apparently inexpensive new AI model is spawning followers and sparking a surge in China’s Hang Seng Tech Index.
- Have Humans Passed Peak Brain Power? – The reading and mathematical skills of secondary school students and adults has declined notably over the past decade or so, OECD research finds. Are social media and the firehouse of information from the internet to blame?
Every month, we highlight a key piece of data drawn from three years’ worth of consumer research.
