The Ten Most Dynamic Cities

Capital Magnet

London's gain is Manchester's loss, but Brits worry more about Shanghai.

The gritty inner London suburb of Stratford has one unlikely allure: 170 acres of leveled mud in an abandoned rail yard. This is the last large undeveloped tract close to the heart of Europe's fastest-growing capital, but not for long. Planners envision this wasteland as the site of the 2012 Olympic Games and the last in a string of planned settlements along the Thames, to house some 140,000 new residents.

London is one of the few global capitals that continue to grow faster than its nation's second cities. Standing at the center of a hot sector (finance) of the booming global service economy, London is Europe's top destination for foreign investors, well ahead of Paris and Moscow. Its imperial past has given it a relaxed attitude to immigration, and a pool of cheap labor. The nation's air and rail links to the world now run mainly through London. And the authorities take an indulgent line on market forces: as Paris still forbids the skyscraper, London is preparing for a new clump at the heart of the city. "The only real rival we now have is New York," says Lauren Preteceille of London First, the agency that promotes business in the capital. Trouble is, Britain's second cities can't keep up. Compared with more decentralized countries like Germany, Britain has always revolved around London. Over the years, the central government has reduced the autonomy of second cities like Birmingham, which complains that London gets an unfair share of everything--public money for infrastructure, top grads, corporate HQs. But national leaders worry less about Birmingham's ability to keep with London than London's ability to compete with new rivals like Shanghai. So don't expect the capital to cool down.

William Underhill

'It's Airbusville'