Multinationals Expanding to Emerging Cities: A Strategic Shift

The global landscape for multinational corporations (MNCs) is undergoing a significant transformation as they increasingly turn their attention to emerging cities in Asia, Africa, Latin America, and the Middle East. This strategic shift is driven by a confluence of factors, including sustainable economic growth, climate change, and protectionism, which are prompting corporations to re-evaluate their geographic footprints. The Oliver Wyman Forum's comprehensive ranking of high-growth emerging urban centers, published in April 2025, provides valuable insights into the business environments of 1,500 cities with populations greater than 250,000. These cities represent 45% of global GDP and 85% of the world's population, making them prime targets for direct investment from MNCs.



Asia: The Hub of Innovation and Export

Asia stands out as a region with multiple mid-tier cities benefiting from national industrial policy, supply chain shifts, and tourism. Cities like Ho Chi Minh and Shenzhen are at the forefront of this transformation, accounting for 79 of the top 100 export centers. These cities have invested heavily in advanced technologies, making them attractive for manufacturing and technology investments. However, the region's coastal locations also expose it to unique climate change risks, which MNCs must consider in their strategic planning.

Middle East: Aviation Hubs and Industrial Growth

The Middle East is emerging as a significant player in the global economy, with six cities ranking among the top 50 commercial hubs. Dubai, Abu Dhabi, and Riyadh are expanding rapidly and serve as aviation hubs with long-haul connections to Asia, Africa, and Europe. The region's companies are increasingly listing on public equity exchanges, indicating a growing industrial capacity. However, expanding this capacity will be crucial for the Middle East to match its Asian peers.

Latin America: Modern Mobility and Supply Chain Alternatives

Latin America offers a growing number of cities as alternatives to Asia, with Mexico's scale as a supplier to the United States now rivaling China. Cities like Panama City and Bogota have built modern mobility hubs, providing strategic advantages for logistics and supply chain management. While climate risks in the region are rising, they are more moderate than in the Middle East and some Asian cities, making Latin America an attractive option for MNCs looking to diversify their supply chains.

Africa: Growth Potential and Infrastructure Development

Africa has significant growth potential and faces fewer climate risks than either Asia or the Middle East. Improved transit and shipping connectivity are necessary to tap export opportunities, with Addis Ababa and North African cities like Cairo and Tangiers standing out as export champions. However, many of Africa's growing commercial hubs need improved urban planning, especially intra-city mobility, presenting opportunities for MNCs to invest in infrastructure development.

Key Factors for Investment Decisions

When selecting emerging cities for investment and expansion, MNCs consider several critical factors, as outlined in the Oliver Wyman Forum's report. These factors include consumer activity, access to suppliers and shipping, regional and global transportation connectivity, and climate resilience.

1. Consumer Activity: Cities with high consumer activity offer significant opportunities for sales and revenue growth. The report highlights that the cities examined represent 45% of global GDP and 85% of the world's population, making them attractive targets for MNCs looking to expand their sales networks to emerging consumers.

2. Access to Suppliers and Shipping: Efficient access to suppliers and shipping infrastructure is essential for maintaining supply chain efficiency and reducing operational costs. Cities with strong access to suppliers and shipping are more likely to be considered for new manufacturing sites.

3. Regional and Global Transportation Connectivity: Good transportation connectivity is vital for facilitating the movement of goods and people, which is crucial for both manufacturing and sales operations. Cities with strong transportation connectivity are more likely to be considered for investment.

4. Climate Resilience: Climate change is a growing concern for businesses, and cities that are more resilient to its impacts are more likely to be considered for investment. The report highlights that some key Asian export centers are uniquely exposed to climate change due to their coastal locations, while cities in Latin America face more moderate climate risks.

Conclusion

The unique economic and political environments of emerging cities in Asia, Africa, Latin America, and the Middle East offer a mix of opportunities and challenges for MNCs. By leveraging the strengths of these cities and mitigating their risks, MNCs can make informed strategic decisions that drive growth and sustainability. As the global economy continues to evolve, emerging cities will play an increasingly important role in the strategic decisions of multinational corporations.