Taking Performance Rankings For Another Spin – This Time As fDi’s City of the Future

Mayor Watson seemed to be impressed when the prestigious fDi Magazine selected Ottawa as the most “Business Friendly” mid-sized city in the Western Hemisphere. Invest Ottawa was also excited about the news and sent its Vice-President along with Councillor Stephen Blais to Anchorage Alaska to pick up the award at the International Economic Development ceremony.

Not only was it the most Business Friendly mid-sized city, Ottawa was also beat out by only Raleigh, North Carolina and Oakland, California as the overall top mid-sized “City of the Future”. Brampton was the only other Canadian city making the overall top 10 in the mid-size category coming in at number 9.

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fDi Magazine, a division of the London, England based Financial Times Ltd., publishes an annual ranking of “Cities of the Future” for world wide economic zones. To come up with its rankings, the Magazine analyzed data for 5 categories – Economic Potential, Business Friendliness, Human Capital and Lifestyle, Cost Effectiveness, and Connectivity. An overall “City of the Future” was then calculated based on a weighted score of the 5 individual categories.  A sixth category labelled FDI (Foreign Direct Investment) Strategy is a qualitative category and was not included in the overall “City of the Future” ranking.

In total, data for the 5 ranked categories were collected for 421 locations using the Magazine’s specialist online tools. There are 77 cities in the mid-sized category. The FDI ranking was based on an evaluation of actual submissions by individual locations describing their strategies for promoting international business investment.

Besides being number one for Business Friendliness in the mid-sized category, Ottawa also ranked 2nd for economic potential, 10th for human capital and lifestyle (Ottawa was the only Canadian mid-sized city making the top 10 for the last two categories) and sixth for FDI Strategy. In the case of the FDI Strategy category, Ottawa was behind Brampton (#1), Quebec City (#3) and Winnipeg (#4) but ahead of London (#9) and Hamilton (#10).

The first thing that jumps out as a little unusual is Ottawa’s placement in the mid-size city category. fDi categorizes cities according to their population size. Mid-sized cities have an immediate city population of more than 200,000 and a larger urban zone (metropolitan area) over 750,000. Large cities have an immediate city population of more than 500,000 and a metropolitan population with over 1million whereas major cities have populations of over 750,000 and 2 million respectively. Canadian cities in the large category include Calgary, Edmonton, Mississauga, and Vancouver while Toronto and Montreal are grouped with the Major city group.  Waterloo ends up in the Small size category rather than Mid size even though its metropolitan population is over one-half million, likely because fDi excluded Kitchener.

Ottawa’s placement in the third tier in terms of city size appears to be based on the population of Ottawa (Ontario side) only excluding the Gatineau (Quebec side) portion of the larger metropolitan area. The total population of the larger metropolitan area is approximately 1.3 million in 2014 which would put Ottawa-Gatineau in the large city group with the other 4 Canadian metropolitan cities. Indeed, the size definitions used by fDi to group cities have changed since the annual rankings were first published which makes it difficult to compare rankings between cities and over time consistently. For example, Ottawa was included in the Large city size category when the new population categories were introduced for the 2013/14 rankings. The Large category also included the Canadian cities of Vancouver, Edmonton and Calgary. Mississauga was placed in the Mid-size group in 2013 with Toronto and Montreal in the Major city group.

Ottawa actually ranked strongly against other Western Hemisphere cities when it was grouped in the Large city size category in 2013/14. It came in 4th in terms of the overall ranking as a “City of the Future” behind Vancouver (#1) and Calgary (#2) and just ahead of Edmonton (#5). Ottawa also ranked #7 in terms of Economic Potential with Vancouver and Calgary coming in at #2 and #3 respectively and #9 for Infrastructure (Vancouver was at #3 and Calgary at #10). Vancouver, Calgary and Edmonton took the top 3 spots in the Business Friendly category with Ottawa falling right behind at #4. Finally, Ottawa took the top spot for FDI Strategy ahead of Edmonton (#2) and Calgary (#4), an accomplishment which was mentioned again in the Mayor’s as well as Invest Ottawa’s 2015 press releases.

Ottawa’s relegation to a third tier city in the 2015/16 fDi rankings is a bit of a downer given that Ottawa was previously in the higher group of  cities in terms of population size. Besides being a larger metropolitan region, as the Nation’s Capital, Ottawa also has a somewhat competitive advantage or head start over other Canadian cities in the mid-size category like Brampton, London and Halifax. It is not that surprising therefore that Ottawa did perform relatively well in the latest rankings as a mid-sized city in those categories that the City ranked high also in 2013/14 when it was included with the group of large cities.

There is one glaring exception however and that is in the category of FDI Strategy. Taking the top spot in 2013/14 from other Large cities as having the best FDI Strategy, one would expect that it would have been a gimme for Ottawa to repeat as #1 in the Mid-size category. However, as noted above, this was not the case as Ottawa came in behind Brampton, Quebec City and Winnipeg in the 2015/16 rankings for this category (note: the FDI Strategy rankings are based on scores by a panel of fDi judges examining detailed information submitted by individual cities on their strategies for promoting Foreign Direct Investment).  Yet despite this relatively weaker showing, both Mayor Watson and Invest Ottawa still see the city’s 2015 ranking as “further proof that Ottawa’s talented network of knowledge-based companies is helping attract new investments and jobs to our city”.

I am not a big fan of “Top 10” listings when it comes to comparing economic health and quality of life of cities. They all have limitations with respect to data availability and subjectivity in the methodologies used and in the interpretation of results. Such Top 10 listings may provide some interesting newspaper reading and even stimulate some mirthful debate, but local economic development promoters like Invest Ottawa and city mayors like to give these rankings an extra spin when their communities score high. Another example is the City of Brampton, Ottawa’s other Canadian Mid-size competitor for fDi’s City of the Future, which also gave its high scores in the fDi rankings an extra marketing push. When it comes to the fDi’s Cities of the Future rankings however, I would have enjoyed the trip to Anchorage but I think I will put the award in the big box in my basement with all the other trophies I have accumulated over the years.

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