Frequently Asked Questions about the Innovation Cities Index 2019.
Index General Questions
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What is the Innovation Cities™ Index?
A city ranking designed to show which cities have the best general innovation conditions right now.
How do we do this?
By scoring 500 cities annually on 162 City Indicators. Results are then classified into into 4 performance bands. Cities are then ranked against current global trends in the given year.
What are the 2019 classifications?
All 500 cities are classified based on Index Scores into 4 (5 in 2015 and before) performance bands by score:
NEXUS: City is a critical nexus for large number of economic and social innovation segments, on an ongoing basis.
HUB: City has dominance on key economic and social innovation segments based on current global trends.
NODE: City has a strong performance across many innovation segments, with key imbalances or issues.
All developed cities should score in these top 3 bands. Emerging cities should aim to score in thee below band:
UPSTART: City has potential strong future performance, with some further improvement.
Cities that score below the Upstart band are not classified as they scored below the half way mark of the scoring range.
Why does a city need to develop innovation?
Cities with stronger conditions for innovation typically will display stronger correlations to jobs, lifestyle, economic development and favourable investment. They may also become more liveable or more desirable cities for residents and businesses. London, Vienna, Barcelona, New York, Boston all did well in our Indexes in past years, before rising in others.
What does a persistent high city ranking mean?
Cities that are able to sustain a high ranking over time (multiple years), are constantly adapting to change.They have embedded change (as the trends chnage every year).
Good examples are Boston, Singapore, Melbourne, and since the Olympics, London.
Are there more local city rankings?
We also produce 4 regional and 15 supra-national rankings (USA, Canada, Europe, etc) from same data.
What does a cities ranking or classification mean for me?
Cities that receive a higher rank or classification (NEXUS, HUB) are cities which are generally good places to develop innovation right now. These cities are usually broad-based high performers, with many good attributes.
So if you are a product manager or entrepreneur and have a broadly applicable market idea, go to these cities to launch.
If you work in these cities, you should be atttracting investment and opportunities whilst conditions are good.
If you are in international or national business, these cities have good conditions for general rolll outs. For example, we picked up Austin and Denver several years ago before they had a hot tech scene.
Innovation can lead economic development, so sometimes conditions for innovation show up before economies fully develop. Or, some cities such as Boston, Singapore or Munich have had sustained periods of innovation in multiple industries over many years (and past indexes).
What is the validity period of the ranking?
In 2019 this is a 3-year window due to the volatility - so NEXUS and HUB cities are the best for general innovation until 2022 (but of course willl shift in 2020's ranking, generally slowly).
What about specific industries & innovation?
If you are targetting a specific industry for disruption (we classify all activitiy into 31 segments), then you need to purchase detaield data to drill down.
A city can be good at one or more segments (e.g. medicine or manufacturing) but not good enough at enough segments to score as Nexus or Hub.
Contact us, as we provide data as a service for the whole city, or to compare the city against industries or benchmarks.
What is the structure of the data behind the Innovation Cities™ Index?
The headline score out of 60 is based on a 3 factors score. These 3 factors map to the conditions for the development of innovation.
The 3 factors summarise 31 segments (or basically, industry and society areas).
The data for this originates with 162 City Indicators, designed by 2THINKNOW. The 162 indicators have benchmark scores calculated by special proprietary algorithms to measure performance. The 162 City Indicators are available to order for cities from 2THINKNOW.
The indicators are based on a large number of city-level Data Points. These Data Points available for order through City Benchmarking Data (request a data catalog at link).
Why is the Innovation Cities™ Index so different from other indexes and rankings?
We measure cities on a broad basis, and examining the cities pre-conditions our Index usually captures potential rises in cities before other Indexes.
What does it mean when a city suddenly declines?
Two points to note. A classification is the most important aspect of a cities ranking (this shows a certain level).
And, second a decline can be once-off (e.g. Hong Kong due to 2019 laws and protests).
Declines show a city is not as prepared for the current trends it may be facing in our data analysis.
I am a journalist, can you provide resources?
Contact firstname.lastname@example.org for any requests such as interviews, or further resources including more detailed 3 Factor rankings in Excel.
What is the basis of the Innovation Cities™ Index city ranking calculations?
2thinknow Research & Development in the area of data science & algorithms. Data science & algorithms are based on assessing innovation pre-conditions via examining 162 indicators (that use 1000+ data points), which are benchmarked and converted to 3 factor scores using 2thinknow's model.
In research, we use theories from micro-economics, behavioural economics, game theory, data science, psychology and a whole clutch of cross-silo disciplines.
The Innovation Cities Index works by identifying the pre-conditions for innovation in each city, and measuring these pre-conditions through a 3 factor score based on 2thinknow's extensive City Benchmarking Data set of 162 indicators, using the latest data science and analysis developed by 2thinknow R&D, since 2007.
I wish to compare multiple cities on multiple data areas (livability, cost of living, transport, etc)
Visit City Benchmarking Data (request a data catalog at link). Or just contact us with your data requirements for a Proposal.
Anything (almost) is possible, and we have done data/analysis location comparison projects successfully for a number of large companies including Samsung, Ernst & Young, Savills, Deloitte and a number of corporations and governments. Simply contact us.
Do you provide access to the whole city data set?
No. We provide access to a selection of data points and a selection of cities.
Contact us for a full Proposal based on whatever data you need.
Our pricing is very competitive compared to the non-specialised management consulting firms, due to our specialization and knowhow.
We may in future license the whole data-set to a corporate partner in return for investment.
What data can I order from the Innovation Cities™ Index?
You can order any combination of 162 indicators for 10 or more cities.
Finally you can order a City Data Audit - a full; data set on your city.
What do some people see as the significance of measuring innovation?
In this way, the Innovation Cities Index is a pre-cursor Index, in that many cities move up in our Index before they move up in other city rankings. (e.g. Vienna, London, Amsterdam, Boston, were all first to be noticed in our Index, among many others).
When you drill deeper into the data as indicators or data points you find that you can measure individual innovation or change at the city level over time, especially since our 2018 and 2019 data system integration upgrades.
I want to do in-depth research, what are my options?
Specific analysis can be done by looking at the region, sub-region or national filters. Please contact us to discuss needs..
How are city rankings relative?
The Index is designed to help innovators determine which cities are generally the best places for innovation development or investment in a given year.
Both NEXUS and HUBcities are recommended as general innovation destinations given other factors such as the culture (e.g. if you are Spanish you may need a Spanish location).
If you are already within a country another city in that country may increase your innovation possibilities.
In this way, which cities are best in a given year. While London may be #1, if you were a Spanish innovator, Barcelona may be your best bet. And if you were in Latin America, Brazilian cities are among the strongest this year. If you spoke Chinese, you may choose Singapore as well as mainland China cities.
Order more detailed data on any cities worldwide to work-up a full comparison - this is what we do for numerous corporations investing, locating or developing in cities.
What does the ranking of cities really mean?
The ranking of each city is based on 2thinknow detailed analysis of each cities underlying data. Rankings are the fun stuff, but classifications are what really matter. Rankings are more telling at the top of a list than the bottom, also as the ranking represents 2thinknow's view on the best places to innovate.
Movements in the ranking can indicate methodology differences, and significant improvement. Significant movement (above 20-40 places) indicates improvement, or relative decline generally.
I am from a business and I want raw comparative data on cities\
One of the purposes of the Innovation Cities™ Index, is that it has allowed 2thinknow to compile the world's largest City Benchmarking Data set of data on cities. By cross-checking cities, we have built a massive data set that is standard and gloablly connected.
2thinknow already work with many of the world's largest corporations and consulting firms including household names.
If you want to compare cities, purchase detailed Comparative City Data sets of any Indicators from City Benchmarking Data.
I am from a City and I want specific guidance
If you want specific guidance regarding your city and the Innovation Cities Index, please become a package subscriber or contact us for other enquiries.
Subscribers receive all data we hold (at least once a year) and detailed analysis (including over 500 slides on your city). A full audit of your city and the ability to discuss it.
The cost coverts our cost in liaising with you, and part of the cost of our data set (most is covered by business customers who use our data for investment).
For cities seeking to improve, this subscription will allow you to vie all data and provide evidence which we will consider in reassessing your city, as well as discuss the ranking. For cities beneath 200 this can produce marked improvements, where such cities may not have adequate data. For cities ranked above 200, such improvements are likely to be smaller.
What are the major changes in 2019?
Citizen Privacy - measures privacy for the ideas of citiens and their communications.
Growth Rate - measures population growth and economic growth surrounding/influencing the city.
Transport Infrastructure - replaces City Transport Infrastructure - a more tailored algorithm.
Significant change to benchmarks in indicators as per 2019 and refinement of the automated algorithms.
The addition of rankings to some indicators as part of rollout on roadmap.
Different assumptions based on events of 2019 including Brexit.
The effect of these and other changes is a change in scores.
Reason for this is more 'global' top cities, and a tighter field of 'competing' cities as explained in the analysis.
Other major changes in calculation, but overall method remains same as recent years.
When was the data prepared this year for the cities index?
Over 65% of the data was prepared in December 2018 to October 2019. So the Innovation Cities™ Index is by far the most recent cities ranking and classification index.
Many other city rankings use data as far back as 2010 or earlier.
We have also been consistently published for 12 years, and data methods are improved each year.
Have there been any corrections to Innovation Cities Index 2019?
There was one prior to publication, but all versions published should be correct.
Corrections will be noted on this website and in the full report (for order).
I want to answer a specific research question, or make my own ranking?
Therefore it is best to create business or product innovation in a city with the highest relative performance within your constraints (such as language, culture, industry, etc). Before making a decision you should request detailed Comparative City Data on a generally select sub set of cities that meet your basic criteria.
Where can I get a geeky explanation of the rationale behind the Index?
Here's the full set of online methodology, including this FAQ.
For more detail, with urban professionals or thinkers, a detailed practical foundation purchase this year's Innovation Cities Analysis Report -- which you can order online here as print, standard (PDF + print) or slide format.
For cities, the best option is one of our city packages. Monthly plans available upon request.
How are the Index city rankings done based on score ?
Analysts compare cities with the same 3 factor scores and competitively rank them based on their current performance within their band. Every city with the same 3 factor score may have relative strengths and weaknesses related to current trends -- e.g. technical innovation may be more important than medical in a given year, or vice versa.
The classification is more important than the ranking, all things being equal. Since 2014 all cities are now ranked (up from 30% in prior years).
My city is a Nexus, why is this important?
Nexus cities have a high probability of innovation not just in science, but in areas such as product, process, business, service, policy and other types of innovation. That is because the have strengths in multiple segments of their innovation economy. So if you were looking for a strong city to create innovation in general, Nexus cities are a great choice -- unless you have specific industry in mind.
What is the data basis of the Index?
2thinknow analysts update a City Benchmarking Data set of 162 indicators. Each indicator contains a band score based on a set of a mix of data points from a wide variety of sources. Across the full data-set there are over 5000 sources at the time of publication. The band scores are standardized comparisons between cities that may otherwise be very different due to culture, location, population, etc.
Our analysts consult these standardized 162 indicators of data to form the 3 factor scores you see in the Index.
How can my city get access to the Innovation Cities™ Index before others?
All subscribers of the packages can (upon request) get access to the results of the Index a few days before release.
In addition they receive final results just prior to release.There are other benefits for package subscribers see the comparison table here. City Package subscribers also receive substantial discounts on training and services that can build your cities urban innovation economy. If you understand the Index better than the others, your city will innovate better than the others!
Is there any difference between cities included in earlier years?
Yes. Data obtained up to 2013-14 has been through more cycles in our data-set (cities such as Paris have been through more than 10 cycles in total, and many partial cycles) have the greatest confidence, the next greatest confidence is the 442 cities in 2016. We adjust the underlying data each year, so 3 factor data is less likely to vary for stable cities that have been in the Index for some time (except due to war, economic disruption, external events, etc). For this reason cities ranked below 400 are most likely to improve over time.
Each year we improve the process. Our process has been through many iterations (and simulations) and we have (almost) perfected algorithms to automate the entire ranking process.
Can I purchase historical 3 factor Index data?
All subscribers receive detailed 3 factor data for all years and a less detailed version
How do city Rankings vary from year to year?
Data shows the strengths (and weaknesses) of cities. These are adjusted for current trends (e.g. manufacturing cities may do well in certain years, less well in others).
This is why a diversified and appropriately structured city will perform well over time in the Index (and will perform well in innovation over time). A more focused city may do well in only a few years.
Economic events shift the Index (eg. GFC 2008+ created downward momentum in cities on periphery of Europe). We are working on new ways to use our unique trend analysis in future Indexes.
Can I purchase historical indicator data?
Soon, we are planning to release a historical indicator product in future.
Ongoing improvements to the data-set mean that for past data it is rarely an apples to apples comparison -- e.g. our transition from qualitative to quantitative data points is almost complete since 2012 project started. The Indexes are not effected as they are based on a snapshot of the data reduced to a 3 factor score. Issues are practically eliminate by the granularity design of our data from factors down to data points.
Once our data systems undergo further design upgrades to cope with the process (and volume) we will offer historical data going forward.
We can offer historical data for raw Data Points (ie. time series) -- such as number of startups, architect firms, twitter users, etc.
Are there any estimates in each year of the Index?
Newer cities added in each year will include more estimates, but our estimate process is designed to mathematically make little difference to a cities ranking.
Cities in China and Emerging markets include more estimates. E.g. the score for African cities is estimated based on available information. But our special algorithm design compensates for imperfect data, and is self-improving.
We are confident of the range of possible scores, due to the special algorithmic design of the Index.
Are any cities scores withheld?
Some cities are not yet published where we feel we are not confident in the range of possible scores.
Do Nexus cities change much from year to year? Are there typical Nexus cities?
Cities such as Tokyo, Paris, Boston, San Francisco, Amsterdam, London and New York will typically under current methodology always be Nexus cities.
Trends support the movement of other cities up or down, and in and out of Nexus cities. London has rapidly advanced as a Nexus, based on the negative position of London in earlier versions of the Index, likewise Tokyo.
Therefore it is possible for cities to improve relative to trends.
Smaller or less connected cities may move in and out of Nexus based on their government, business and community choices.
What are the differences from previous years?
The trend analysis underlying the rankings is different each year, and we have tried in this year, as much as possible to assume volatility.
Hence national capitals and major cities tend to do better this year, as in the result of volatility, more political locations tend to do better (as the government increases there interference in the economy, favoring the major cities) -- and are more predictable as innovation destinations.
Also there is a form or economic 'triage' in place where government interference results in favoritism of the major economic centers (whereas unhindered markets allow capital to flow where it's best deployed).
What is the 31 segments model?
The 31 segments cover all major industries and community activity areas of any urban economy. 2thinknow analysts use these to analyse the urban innovation economy. You can review the 31 segments here.
So what does Innovation Cities™ Index mean for ideas?
Ideas are viruses (as Seth Godin argued recently, but was more academically argued by Stanford's Professor Everett Rodgers in Diffusion of Innovations).
2thinknow have mapped the process of idea communication and adoption as a process of innovation. Part of this process can be overlayed onto mapping the pre-conditions for innovation via the 3 Factors. i.e. How possible is it for ideas to become innovations as a structured process, in a given location.
What is the difference in the top ranked cities?
The top ranked cities are the best choice for innovation. In our view cities like London, New York, Tokyo, Silicon Valley and other top cities are all good choices depending on speaking English or Japanese and of course the industry profile of each city (for which you need detailed indicators or data points). Segment analysis can explain what strengths a city has.
Can I examine the Index by country?
You can download a basic excel file for easy analysis from the Index page.
My city has become a Nexus from Hub what does that mean?
This means our analysis is that your city has become a city with increased innovation potential in a broad variety of segments compare with all other competing cities. Nexus cities have more innovation potential in a broader range of 31 segments.
My city has declined significantly, what does that mean?
This means that other competing cities are doing better (in general) against this years trends than you.
Chances are you will know internally why the city has declined, as bad news travels faster than good news.
This does not mean you are bad at 'tech' or 'science' we are measuring innovation pre-conditions.
Can cities that decline improve rapidly?
Yes! Athens and Lisbon have posted large gains for example. If you hit rock bottom, take action, try a lot and keep what works you will improve. We can also help by leveraging our case studies of 500 cities.
Our city declined 20 places should I be worried?
This depends. A decline of 20 places at the top of the top Nexus cities is more significant than within the Hub, which is much more significant than Node.
How many cities do you include?
500 cities since 2016, 445 cities in 2014, less in previous years.
We have a city benchmarking data-set of 2,100+ cities in total for which we track some data. Cities are selected from a list of cities based on health, wealth, geography and other core factors. This includes population, GDP, GDP per capita and infant mortality among other base factors. This may be relative to ensure a geographic representation using our proprietary model for ensuing some cities in each region are represented.
How can my city improve it's classification or ranking?
Obviously the lower your relative ranking, the further improvement can be made (and the quicker). The higher a position your city aspires to the harder it is is to improve, as their is much more competition.
The Index is inherently conservative, so some cities will move up in some years due to corrections to underlying data based on superior evidence being located.
Contact us to susbcribe to get the right insights.
Does my city need to submit data to the Innovation Cities™ Index?
Our Index does not rely on data submitted by cities, except where they have published statistics or data on their own websites or in publications. The Index is currently prepared with data gathered by 2thinknow in the form of 162 indicators and our internal analysis. This is based on data in a mix of locations and languages from over 5,000 sources and standardized.
Cities that purchase a city package can view our detailed standard indicators data and suggest changes or corrections based on superior evidence.
All suggestions must meet our evidential standards and we reject mostsuggestions. However, it can assist correct misinformation.
Can we mail you information?
2thinknow have a library. Cities and organizations are free to mail us DVD/CD-Roms of data, or printed materials, books, journals to be added to our library.
Mail to: 2thinknow, Innovation Cities Program, GPO Box 3375, Melbourne VIC, AUSTRALIA 3001.
Information can be emailed however due to the large volume of emails received we prefer physical media. Excel, Word, PowerPoint, PDF or Kindle formats accepted electronically.
Can I submit data to the Innovation Cities Index/City Benchmarking Data?
Can I sell you data about cities?
If you have a survey with good sources, good methods, strong evidence or specialist data-sets, yes you can. (assuming we don't already have it). Please Contact Us
How can another city rise when I think my city is better?
2thinknow analysts take a detached rational view of cities and try not to be swayed by temporary issues and problems. In most years, rather than have the Index radically change from year to year we take a look at mid (2-7 years) and long term (7 years+) trends as part of the ranking cities.
2018 was a radical reworking year, like 2014-2015. Hence there are changes in rankings.
Whilst say a city may score artificially high on one measure due to manipulation, to improve in our Index cities can score better by small improvements in many indicators.
Why do some cities rise despite problems?
In the case of emerging or non-Western locations or cities with less public data, we may have obtained better information about the city. One of the primary ways a city can rise in the Index is if better information is obtained. We will always use the best available information, which reflects our bias towards rational information from diverse sources to analyse cities.
So even if the trend is down, better evidence may cause a rise especially in areas where information is difficult to obtain.
Also, the problems may be offset by good news that is not reported. Multiple small improvements in several indicators may offset a decline in one indicator (e.g. Electricity & Gas in Adelaide).
My city is a Node City, what does this mean?
Node means globally competitive for some types of innovation. These cities are a good bet, unless you have a better Hub or Nexus option -- or if the Node city has a strength in your particular industry.
Can a Nexus ever become a Node?
A Nexus city is unlikely to fall below Hub status. So a Nexus is unlikely to become Node except in the case of extreme events such as war, strong economic issues or major long term disaster. Or a once-off event.
If a city is not listed, what does this mean?
The city is classified as a Node city or below in this year, all cities that wold be score well enough to reach Nexus status and Hub status are captured, and in all years there are no omitted Hub Cities. If you would like an indicative idea, look at similar geographic and economic cities in your region or country.
Are some cities included within other cities?
Yes, for the Index purposes, we include the surrounding suburbs or smaller metros in cities. The normal zone is based on government urban zones.
Is the 2thinknow city index the largest?
Yes. We create the largest index classification of 500 benchmark cities (since 2016) and 445 cities (2015) and ranking of top cities worldwide, using 162 indicators.
What is a ‘good performance’ for a city?
A good performance is a Node city. We classify this as competitive.
A Node city may be perceived as better by residents than the residents of cities who may have higher expectations.
A nNode city can still dominate a single industry segment, and in fact that is often how Node cities become Hub cities.
My city is a Hub city, is this less important than a Nexus City?
No. Hub cities have competencies in slightly fewer sectors, and may be dominated by fewer industry and community segments. Cities that focus on a few key industries tend to become Hubs (or even nodes). Which city is right for you depends on the industry you are in, and your cultural background.
Why do you include more indicators than other indexes?
We consult 162 city indicators. We are producing an overall city index score for all all cities and ranking of top cities.
There are 39 indicators in Mercer. Some indexes have 5 indicators. Ours is more about a balanced economy for innovation across many sectors.
Also our data is more recent and improved every year. Making each index better.
How are cities selected for inclusion?
The cities are selected based on demographic, geographic, economic, health and social factors from a list of 1,540 cities.
To ensure a global mix of cities, we then select a set number of cities from different nations with potential for innovation.
Cities that work with 2thinknow as package customers may be included ahead of similar size cities as we have more data for these cities. So for some cities we may accelerate the timeline for listing. It is unlikely however that such cities would enter the index above the Node status -- which is the central position for cities.
Where can I get an overview of the Innovation Cities™ Framework?
The Innovation Cities™ Framework is the centrepiece of the Innovation Cities™ Analysis Report
The report gives the context of measuring urban innovation economies, summarizes each segment and city indicator. It’s a low-cost introduction. There are excerpts and tables of contents on the above site.
What else is important in the Report?
In each report we make predictions about the immediate future of the world, and recommendations on high level actions and possible world events. So far we have predicted the climate of the GFC, the strength of the German economy, U.S. economic issues, the circumstances for the Ukraine crisis. Significantly we have also made very few errors compared with the many reports published by larger firms. We also hold a quite contrarian view to mainstream commentary.
The predictions come primarily from the City Benchmarking Data, and change trend and innovation models of Christopher Hire, our Director Data.
These analysis are clearly stated and are used to prepare the final comparative Innovation Cities™ rankings.
How do I purchase the Innovation Cities Analysis Report?
Is the Innovation Cities™ Analysis Report about specific cities?
Many cities are profiled in the Innovation Cities™ Analysis Report, however, it’s purpose is to outline a framework and elements you may need to build an urban innovation economy. The 3 factor scores for all cities are included in the report.
How do I get a detailed report on a specific city?
You can order a detailed City Data Audit on any city from 2thinknow. This includes 162 city indicators of data, with evidence for each score, a variety of goodies.
You can also commission a custom written report with analyst commentary – Contact Us.
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Is there a media release?
Yes. Our Media Release (Linked after go live) is provided with each index and headline rankings for use by media of all kinds. Media resources here.
Can I reproduce the indexes or top rankings?
Yes, definitely. Please attribute.
Can you send me extra resources?
Can you do an interview?
Will you help out my blog
If you are not a journalist, yes you can publish our Media Release (Linked after go live) and send us some quick questions via email.
Do you accept all interviews?
Mostly yes. We don't like interviews that are never published from people pretending to be journalists however, whatever the purpose. (Some people pretend to be journalists but are actually gathering information for other purposes, tsk tsk).
Please email us from a email address linked to your employer, not a yahoo or gmail address (unless we know you personally as an accredited journalist).
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When will the next Index be published?
The Innovation Cities™ Index is an annual index. Note that we will update this from time to time on this website.
How can I include my city in the next year's Index?
Any city can request to be included. However, the main cities by population, connections and economic contribution are already included. More cities will be included in future automatically based on our internal geographic and economic distribution process. This year we changed a few cities, but did not increase the number due to it being a redesign year.
Will new cities vary next year?
This depends on trends, or wars, natural disasters, etc in emerging countries for example. Some better data may improve an Index score (or occasionally reduce a score). Cities tend to be scored conservatively first year published unless there is a compelling data / analysis reason.
Why are Nexus cities the best all-round destinations for future innovation?
The nexus cities have the most balanced performance across multiple sectors of the economy. If you are not sure which sector of the economy you want, these are the cities. These cities tend to balance livability with opportunity. Hub cities have a wide variety of opportunities across more than one segment or sector.
We recommend detailed City Benchmarking Data for each city -- including data in the segments you wish to invest in.