Future cities:

Country musician Willie Nelson closed 2014 performing a sold-out show at the 2,750-seat Moody Theatre in downtown Austin, Texas. This arena is the new home of Austin City Limits, the longest-running music series in the history of television–and the show that in its 1974 debut featured Mr Nelson singing "Whiskey River". The new upscale venue exemplifies just how far the TV programme–and the city itself–has evolved over the last four decades.

Austin's leaders have long recognised that music is a defining characteristic of their city–and, as a result, integral to their efforts in shaping the city's growth and prosperity. "Music is incredibly important," says Will Wynn, Austin's mayor from 2003 to 2009 and a big music fan himself. "It's the spice in the chili that makes it taste so good."

Indeed, Austin boasts more than 200 live music venues, which helps drive the city's burgeoning tourism sector. But music is just one critical piece of Austin's creative economy, which includes some 50,000 arts-related jobs in areas that span film and television, gaming and other visual arts. Despite the 2008 recession that hurt so many cities, Austin continues to add population and jobs.

Music and other creative industries have particularly benefited from an expanding population and job base stemming from the technology sector. Austin's tech boom dates from the 1980s when the city lured two tech-based consortia–the Microelectronics and Computer Technology Corporation and SEMATECH (Semiconductor Manufacturing Technology). In both bids, Austin beat other locations around the country by offering a mix of financial incentives (such as subsidised leases) and support from local universities. Already the manufacturing home of IBM, Texas Instruments, Motorola and Advanced Micro Devices, winning these two site competitions "ultimately put Austin on the map–into a small group of rising intellectual cities–and it kept rising from there," says Mr Wynn.

This infusion of capital and tech talent helped attract other new businesses, including high-profile players Apple and Samsung, as well as spurring start-ups and additional research-and-development (R&D) activity. Yet, as Mr Wynn notes, the new investments did not supplant the city's creative vibe. Quite the contrary. "As these young, intellectual, educated tech minds came, there was always the presence of creativity," he says. "The technologists didn't create the image–the image was already there."

In fact, just at the time when the city landed SEMATECH, the first South by Southwest Festival (SXSW) kicked off in 1987. What began as an ad-hoc music gathering in a sleepy university town has since grown into a massive conference-cum-festival that includes music, film and technology. According to a study by the consultancy Greyhill Advisors, in 2014 SXSW attracted more than 370,000 attendees and generated more than US$315m for Austin's economy. The event also strengthens the city's status as a trendsetter at the intersection of art, music and digital technology.

An animated illustration of a man and woman in formal wear, facing the viewer at a gallery event.

Without SXSW, Austin's economy may have taken a different turn. Between 2000 and 2002, after the dotcom bubble of the late 1990s burst, the city lost more than 25,000 tech-sector jobs. Austin responded by moving aggressively to drive growth. Remarkably, until then, the city never had its own economic development office.

One sign of this new direction was to formally adopt a city slogan. "Keep Austin Weird" became the catchphrase for the city's commitment to creativity–and a reminder that urban growth should not drive out the cultural assets that shaped Austin's identity and appeal. Mr Wynn describes the mindset: "We didn't want to become another city in the United States of 'Generica' ... not to disparage other cities, but by God, no matter how big we grow and our industry clusters merge and change, we are going to be a unique American city."

The data underscore Austin's progress. Employment in creative industries has boomed, growing by 25% in 2005-10. The growth trends have continued, benefiting from the rise of digital media, a nearly US$1bn gaming industry, the continuing strength of the music industry and Austin's position as one of the top magnets for small business and the much-desired 25- to 34-year-old demographic.

It is no wonder Austin's real-estate market is flourishing, and driving up home prices. In addition to the 37-story W Hotel next to the Moody Theatre, the burgeoning downtown area boasts the 56-story Austonian, the tallest residential building in Texas, and a brand-new 34-story JW Marriott; a 50-story Fairmont Hotel is expected in 2016. On the edge of the downtown area, the Waller Creek project aims to create an expansive urban park and other related developments. Adding to this vitality is a food culture that counts multiple James Beard award-winning chefs and a legion of food trucks serving diverse menus that extend well beyond Austin's signature Tex-Mex and barbeque offerings.

Inevitably, there will be bumps in the road. Despite voters in November 2014 rejecting a US$600m bond to finance a new light-rail system, Austin's future will be shaped by the city's skill in managing severe highway congestion, a rising cost of living and other challenges caused by rapid growth. Still, the city's leaders can continue to count on the growing stream of young and educated newcomers, drawn by Austin's musical vibe and adding to its creative mix.

With walls covered in graffiti and its century-old structure in disrepair, the five-story Tacheles building in Berlin's historic Mitte district had for two decades been a magnet for squatting artists. First opened as a department store in 1908, it endured bombing in the second world war and was then left vacant under East German rule. Once the Berlin Wall fell in 1989, artists renamed it Kunsthaus Tacheles ("Art House Tacheles"), making it an iconic symbol of the new Berlin's sense of possibility.

But in 2012, HSH Nordbank, owner of the Tacheles building, drove out its avant-garde occupants, including those responsible for the chaotically vibrant collection of artist studios, cafés, clubs and galleries. This followed years of legal skirmishes by various investors in the increasingly dynamic commercial district in the city centre. Yet Tacheles remains a clear reminder of the critical role that a passionate subculture played in driving the city's creative growth after 1989.

"Many young people came to Berlin from all over the world because we had the freedom of thinking, doing and making," says Juergen Schepers, branch co-ordinator for creative industries at the Berlin Chamber of Commerce and Industry. "Everything was possible. There was not any structure [regarding ownership of buildings] and the living costs were really low. In a certain way, that's the spirit of Berlin and [created the groundwork] for the city's development."

The rise of Berlin as a cultural hub–and economic force–accelerated after a reunified Germany relocated its capital there in 1999. In fact, the turnover of creative industries in this city of 3.5m grew by 68% in 2000-12, from €16.8bn to €28.2bn, representing 16% of the overall economy, according to Chamber of Commerce data. With major input from publishing, gaming, film and TV, design and art, the number of companies in creative industries grew by 70% during the period.

While the art sector comprised less than €600m in annual revenues in 2012, Berlin's 400 galleries and some 20,000 artists have a much greater impact on the cultural life of the city. Berlin Art Week (80,000 visitors) and Berlin Fashion Week (200,000 visitors) are just two examples that illustrate the city's growing focus on art-minded tourism–and help explain the doubling of overnight stays in the city in 2004-13 from 13m to 27m.

As the real-estate market has become more commercial and costly, city leaders have recognised the need to maintain affordable spaces–to sustain a "mixed culture in the heart of Berlin", as Mr Schepers puts it. This includes programmes subsidising artists' studios and apartments, backing small creative companies and urging real-estate investors to provide spaces for artists in their new or renovated buildings. "It's so important to support the subculture," says Mr Schepers, noting that the creative fields are primarily driven by small enterprises. "This gives the small companies the chance to develop into medium-sized and maybe then large companies."

It also gives Berlin the opportunity to sustain and enhance its identity and allure as a creative magnet. The fear is that as gentrification drives up prices, the city risks losing its distinctive appeal. "Berlin is poor but sexy," said former Berlin mayor Klaus Wowereit in 2004. And while the city's allure represents an opportunity for investors, officials like Mr Schepers are seeking to balance Berlin's growing wealth with its cultural goals.

"We are looking to not make the mistakes of London and Paris," Mr Schepers says. If artists and other young creatives cannot afford to live in Berlin, "they can go to Warsaw or Budapest or other [cities]. That's a problem."

Berlin residents also worry about how the city's future growth will be managed. In 2014, Berliners strongly rejected a city government plan to turn a portion of the former Tempelhof airport site into 4,700 new homes, voting instead to maintain the open land as a public park. (Locals were already using the area to ride bikes, fly kites and pursue other outdoor activities.)

Their plan calls for a pedestrian-centric urban village, including a riverside trail, a hotel, cafés, nightclub, shops, a rooftop fish farm and garden, a tech centre for start-ups, a student dorm, and warehouse space for musicians and artists. As the owners put it, "We combine nature, economy and culture... We want to create value, experiment and learn in a unique place worth living." Mr Schepers believes the project can be profitable while also bolstering the creative economy. It is this kind of multidimensional thinking that may be key to Berlin maintaining its special qualities as a creative magnet.

For more than a decade, Jumex Group fruit-juice heir Eugenio Lopez Alonso amassed a dazzling collection of contemporary art, housing it in a factory building on the industrial outskirts of Mexico City. During that time, his Colección Jumex grew to more than 2,000 pieces, and although it eventually became one of the largest private collections in Latin America, it could be viewed by appointment only.

All that changed in November 2013, when the collection was moved to the newly built Museo Jumex in the fashionable and vibrant Nuevo Polanco district. Designed by British architect David Chipperfield, Museo Jumex resembles a creamy white cube with a jagged crown. The museum's opening helped raise the position of Mexico's capital city on the global art map–and reinforced the growing stature of Mexican and Latin American artists. "We don't see ourselves as a private institution," says Patrick Charpenel, the museum's director, but rather one that has a "big responsibility" to "open a conversation" with the public.

Just steps away from the Museo Jumex sits the Museo Soumaya, one of the most visited art museums in Latin America. Financed by Mexican magnate Carlos Slim, one of the world's wealthiest individuals, Museo Soumaya opened in 2011 in the high-end Plaza Carso, a previously rundown industrial area developed by Mr Slim. Its collections range from European art from the 15th to the 20th centuries–including the largest Rodin collection outside France–as well as historic artefacts that include Spanish Colonial coins and Mexican relics.

As the contemporary art scene continues to catch fire in Mexico City, dozens of small galleries have sprouted up, often financed on shoestring budgets–much like the art scene in New York City in the 1970s and 1980s. International collectors and visitors often venture out to explore the city after arriving for "Zona Maco", the annual contemporary art festival that hosts more than 100 galleries from nearly two dozen countries. Tourists can find both local and foreign-born artists benefiting from low-cost living and an expanding sense of opportunity.

While art, film, TV and digital media are all magnets for creative talent, one small government department–the Laboratory for the City (Laboratorio para la Ciudad)–offers a more unexpected take on how creative talent may define the city's future. Within weeks after Miguel Ángel Mancera was elected mayor in 2012, he asked Gabriella Gómez-Mont to helm the Laboratory and re-imagine how city government could operate more creatively and connect with the public. "I took the job because I'm madly in love with Mexico City and its potential," says Ms Gómez-Mont, director of the newly created institution. Indeed, she was given latitude to build a multidisciplinary team of architects, filmmakers, social scientists, designers, editors, urban planners and others who could employ their wide-ranging expertise and passion for the city to spur civic innovation and urban creativity. One early project involved designing a smartphone app that uses city data to differentiate registered taxis from unreliable pirate taxis that often look similar.

A diverse group of creative workers discuss designs and photos over coffee at a business meeting.

"Creativity is not a luxury. It's not the cherry on the cake," says Ms Gómez-Mont. "It's urgent." This is no small concern in a city of 19.5m that struggles with the problem of wasted talent often resulting from poverty and crime. She sees the city's social-services centres as untapped resources. "We have just started to explore the potential of bringing a lot more people into the fold of what we define as the creative community of Mexico City," she says. "We have the staff, the budgets and the buildings. We have the hardware. We just need to recode [the centres] and rethink what they are."

In 1896, at the Watson's Hotel in Bombay, audiences witnessed one of the first cinema productions of the pioneering Lumière brothers. Advertised as "The Marvel of the Century" and "The Wonder of the World", their "living photographic pictures" included a demolition and soldiers on wheels. This was followed by other foreign-made films and documentary footage shot in India. Among the most notable was the British-made "Our King and Queen through India", which captured the royal visit to Delhi in 1911 to celebrate the coronation of King George V and Queen Mary (who were also proclaimed emperor and empress of India).

But it was a few years later, in 1913, when Dadasaheb Phalke wrote, produced and directed "Raja Harishchandra", a full-length feature depicting Hindu gods and a righteous king. This landmark film, shot in Bombay and widely credited for launching the Indian film industry, highlighted the rich and compelling landscape for telling local stories.

Today Mr Phalke is known as "The Father of Indian Cinema", the forerunner of the world's largest concentration of movie production in Mumbai (formerly known as Bombay) with some 900 films made each year. Bollywood–a moniker derived from the combination of Bombay and Hollywood–has travelled far from its roots as a local industry for domestic consumption. It has become a growing cultural export, tapping into the vast Indian diaspora (some 25m in more than 100 countries) and a burgeoning non-Indian fan base.

Bollywood not only influences related creative industries such as design, digital media, fashion, food and music–it has lent India's movie capital a "city of dreams" ethos, much like Hollywood. Mumbai, India's largest city with a population of nearly 17m, draws migrants from throughout the country seeking a better life and inspired by the city's multiculturalism and sense of opportunity. "People in Mumbai are exceedingly open–it's a great melting pot," says Dr Amit Kapoor, president and chief executive officer of the India Council on Competiveness. In particular, Bollywood has been at the forefront of promoting tolerance for different religions and sexual orientations, as well as other forms of diversity, "stretching the limits of acceptance... its psychological impact is humongous."

While Mumbai continues to generate 40% of India's foreign trade and about a third of the country's income tax revenue, the city suffered a wrenching transition beginning in the 1970s with the decline of the textile industry and broad cuts in manufacturing employment. Many of its mills in the central city were abandoned after a long strike in 1982-83, pushing some workers towards the emerging formal service industries (including IT, banking and finance, transportation and healthcare) and even more to the informal sector (such as unregistered business activities). Even though Mumbai today is the headquarters for 21 of India's 54 largest companies, Dr Kapoor notes "people understand that jobs are often not found by job seeking but by [their own] job creation."

A spirit of entrepreneurialism is often portrayed in Bollywood films, which have increasingly offered dreamy visions of wealth and glamorous living. The push for individual economic success and the finer things in life intensified in the 1990s, when Indian liberalisation policies reduced tariffs, opened markets and eased restrictions on licensing and permits. Spurring a massive infusion of foreign investment, these changes attracted global media firms eyeing opportunities to tap into a growing middle class, as well as expand the film and television industries. With more funding, the production values of Bollywood films improved, increasing their appeal to global audiences. This globalisation also expanded the impact of the film industry on fashion and music, as aspirational audiences hungered to acquire the clothing they saw and the music they heard.

The desire for better living is also playing out in another part of South Mumbai, as city agencies and citizen groups debate how to transform 1,800 acres of docklands. This is both an unusually large parcel and a rare opportunity for development. Under the evolving plan, the Mumbai Port Trust intends to close many polluting businesses and streamline port operations, then allocate portions of the property for open spaces such as parks and playgrounds, roads, transport facilities, and social amenities. Nearly half of the parcel will be reserved for mixed-use development.

While the plans are in flux and may take decades to complete, the Port Trust is positioned to transform not only the south-eastern waterfront but the entire city. With one of the densest urban areas on the planet, Mumbai faces continuous pressure to house its growing population, making improvements to mobility and liveability two keys to Mumbai's progress. For his part, Dr Kapoor sees the multibillion-dollar investment to expand the metro system as one answer to the challenge of commuting and the hope for affordable housing. If these projects succeed in improving everyday life in this "city of dreams", they will go a long way towards transforming the fantasy of a new and inclusive Mumbai into reality.

Before a boisterous crowd of 40,000 in Seoul's Sangam Stadium and millions more watching on television and online, five South Korean gamers, ages 17 to 21, dominated their opponents to collect a US$1m prize in the 2014 World Championship of the popular video game League of Legends.

These young professionals, sponsored by Samsung, are riding the wave of popularity that gaming and e-sports are experiencing globally–and particularly in Seoul, among the world's most wired cities. At one point during the final match, viewership peaked at 11.2m. No wonder organisers booked Sangam Stadium, home to football's 2002 World Cup, to make room for the expanding legions of fans that wanted to be there in person.

Seoul benefits from one of the world's fastest digital infrastructure systems, which will become even faster once 5G mobile services are rolled out to this market in 2020. Internet is available in nearly every household, and through some 10,000 public wireless hotspots around the city, even in subway stations and tunnels. This connectivity was envisaged in the city government's "Smart Seoul 2015" plan, which had anticipated in 2011 that smart-device users would surpass 80% by 2015. (In fact, it already reached 85.4% in 2013.)

It has been quite a journey for this 2,000-year old city along the Han River, which was largely destroyed during the Korean war (1950-53) and struggled subsequently to feed its residents. Since the 1990s, the Korean government has targeted the creative industries (particularly digital media) to drive growth and has supported public-private collaborations to expand the IT industry and its exports.

This shift took on added importance following the Asian financial crisis in 1997, when the national government called for a "Cyber Korea" and aggressively pushed broadband development. "Sometimes it takes an unfortunate event for enterprise to happen," says venture capitalist Han J Kim, a co-founder of Altos Ventures, founded in Silicon Valley and now expanding to Seoul. When many of the large conglomerates began cutting staff, he says, "It was the first time a lot of young people realised 'my job might not be secure for life... I might as well go out on my own.' "

The shiny modern DMC sits atop a former island that once was landfill for the city's trash. Similarly, the Cheonggyecheon waterway in downtown Seoul, once covered over with pavement and the site of a noisy overhead highway and slums, has been transformed into a bustling promenade of upscale shops, public art and cultural events. These are the kinds of visual improvements that underscore the positive changes in the city's quality of life.

Yet it may be the new crop of start-ups that determine the city's future prospects. One example is the state-run Creative Economy Town, an online community that connects budding entrepreneurs with potential mentors and informational resources for starting a business. Since the website's launch in 2013, more than 20,000 people have benefited from the initiative's assistance.

Venture capitalist Mr Kim, who left Seoul for the US at age 10 and is one of an expanding pool of Korean-born immigrants returning to live and work in the city, acknowledges that the blossoming start-up culture is still "very fragile". But he has seen a new attitude among digital entrepreneurs who are creating ideas that attract interest–and investment–in Seoul and can be replicated elsewhere. "They've developed a lot more confidence [in] themselves," he says. " 'We can dominate the world.' That's an attitude you didn't see five or six years ago."

This is a milestone moment in Seoul and the country overall, which is attracting a record number of tourists (12.2m in 2013 and spending nearly US$18bn, according to the Korean Tourist Organisation). It's clear that both public and private investments are poised to sustain this success for the long term.

Whenever global city rankings are conducted, one can expect to find London, New York and Paris near the top of the list—three economic powerhouses with a cultural reach that spans the world. Their storied histories—as well as their concentration of economic and creative activity over time—give them a competitive advantage that continues to attract investment, talent and tourism.

Likewise, the cities of Austin, Berlin, Mexico City, Mumbai and Seoul are growing in international stature by developing cultural strengths in specific creative fields. At a time of intense competition between cities for investment and growth, this focus—combined with a continuing eye on urban innovation—creates the opportunity to be more than a momentary hot spot.

Over the next decade, each of our five cities anticipates continued growth, fuelled in no small measure by government and business decisions to recognise and strategically support creative industries. This is good news for the artists in these cities, of course, and even better for those in other fields that will benefit from the increased pace of economic activity spurred by creative industries. In an increasingly urbanised and interconnected planet, the transfer of ideas from one city to another offers the promise of new models of creative growth, with the potential impact extending well beyond any one city's boundaries.

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