Seven Indicators of an Advanced City

Cities and towns are especially important in the development and growth of the global economy. They carry advantages such as more job opportunities and more effective public services, and the residents of towns often have better health conditions, too. These days, however, there is no direct linear correlation between an increase in the ratio of urban residents and the economic output of countries. The conditions of quality growth are based on much more divergent factors. The identification of factors that balance and catalyse development and the ranking of municipalities accordingly is a research topic addressed by an increasing number of research institutes and international organisations.

According to the estimates of international organisations, with special regard to the UN World Urbanisation Prospects report, the ratio of the population living in urban areas will increase from 54% to 66% by 2050. The development and operational system, not to mention the social conditions, of urban centers, including Budapest will face new challenges as a result of this growth. As globalisation processes progress, more fierce competition will develop between such regions, primarily for investments and qualified workforces.

Apart from the internal challenges affecting operations, urban regions must also face the challenges of international processes. The economic and energy efficiency of the system of operations, the quality of decisions and governance, and an accepting and integrating social environment are key factors for providing the conditions for quality growth and performance in a global economic environment.

That is why a new indicator needs to be defined for the complex development objectives of municipalities, one that interprets development in accordance with several criteria, so a particular city can be positioned in the flow of global processes on an international scale.

From the early 2000s, increasingly complex indicators measuring the development and competitiveness of towns have been developed, most of which examine the liveability and sustainability of towns. The international rankings formed from such indicators reflect not only the general economic and population data (e.g., density of population, GDP), but also the complex global competitive position of a town. It is a general trend that, over the last 3 years, the competitiveness of European cities has been deteriorating (especially in the cases of Copenhagen, Helsinki and Stockholm). They are falling back in the ranking of the most advanced cities of the world, while the cities in Japan and Australia are improving their positions in such comparisons. Such emerging cities include Melbourne, Sydney, Tokyo and Fukuoka.

Among European cities, primarily the positions of Berlin and Munich are improving, but Vienna has also achieved remarkable results and has maintained its leading edge in terms of liveability and sustainability. Budapest’s positions in the international rankings are the best in innovation, quality of life and liveability. In terms of those criteria, it ranks among the most advanced 30% in general.


The measurement of the progress of citiesand their relative position in global competition (rankings) is increasingly based upon complex analyses, in the course of which economic development indicators are supplemented with various environmental and social data. The position of cities in terms of liveability often appears as a separate factor in the selection process of multinational companies when they must decide upon questions of geographic expansion and geo-strategy.

Consequently, cities will often use new and complex indicator-based alternative growth as a policy-shaping tool and – judging from the image they wish to inspire with symbolic logos – as a brand building instrument as well. These indicators help local decision-makers prepare for development projects and to determine the direction of future development and growth strategies. The list of indicators below reflects the most important factors when measuring the complex development of cities in an international comparison:

Keys to successful development and investment

  • quality and dynamism of networks
  • productivity increase and competitiveness, reflected in economic indicators
  • social progress
  • health environment status and method of utilisation of resources
  • social and territorial distribution of income
  • welfare level of population
  • application of indicators measuring the above factors
  • integration of indicators into the urban development strategy-forming process

More focused and regionally meaningful indicators should be used to assess social progress, because they reflect a more substantiated picture than a national approach to the same processes. All in all, the majority of indicators identify and measure the quality of life, which is the most important component of a liveable environment.


On a global scale, the relative position of Budapest is the best in innovation, quality of life and liveability. It belongs to the most advanced 30 per cent in rankings that focus on these factors. The role of the capital city in the economy is outstanding, as Budapest represents Hungary in the international business site decisions of many large companies. As such, the position and assessment of Budapest in international assessments is relevant for the competitiveness of the whole country. Budapest achieved its best position in the ranking by Global Innovation Cities index, where it occupies the 64th place out of the 445 cities under review. The global list is led by San Francisco, New York and London. In the Central European region, only Vienna and Prague are ranked higher than Budapest. On the basis of the position achieved in the various ranking orders, Budapest also has favourable characteristics in terms of competitiveness, living expenses and prosperity.

In most of these surveys, the capital city’s good competitive position stems from its infrastructure.


The purpose of Monocle is to describe the quality of cities on the basis of available leisure activities and community experiences. Thus, it supplements the more traditional quality of life indicators measurable on a more objective basis. That is why recreation and a buoyant night and cultural life are important factors in the ranking.

It is one of the few indices that does not rely on statistical indicators only, but also uses subjective factors that are based on opinions. It also works with indicators such as quality, education and health, the number of sunny hours, average temperature, social tolerance, cost and quality of public transport, crime rate, “24-hour lifestyle,” accessibility of green areas and the freedom of launching businesses. The indicator also looks at how easy it is to buy drinks after 1 a.m. Monocle has published its analysis of the 25 most liveable cities annually since 2007.


In the 21st century, municipalities face a number of new risks: natural disasters, terrorist actions, virtual attacks and financial crises. Cities must prepare themselves for the century of changes. In 2013, the Rockefeller Foundation agreed to select, within a three year period, 100 cities that have demonstrated innovative style and exemplary change management practices, as well as active partner relations in order to involve stakeholders in the urban development processes. The selected cities receive support in the form of USD 100 million from the foundation, as well as assistance in developing a flexibility strategy. To date, the foundation has selected 67 of the 100 cities. Consequently, the ranking order of the Rockefeller Foundation is a list of those they support – i.e., the club of flexible cities.


The primary objective of the Hungarian KRAFT index is to present the pace of development and creativity potential of a region, as well as the opportunities stemming from the co-operation of regional actors. The study constituting the basis of the index was written by sociologist and historian Ferenc Miszlivetz and the researchers of the Institute of Social and Europe Studies Foundation (ISES). The multi-variable index looks at three main factors: creativity and innovation potential, social and network capital, and sustainability potential. In addition, its observations are also supplemented with “soft” factors such as willingness to co-operate, level of confidence, knowledge transfer and collective competencies of regional actors. The “Creative City – Sustainable Region” West Pannon regional development concept, prepared with the KRAFT index, was supported by a government resolution and measures.


Edited by: Sára Farkas

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