For the second year in a row, Singapore sits atop Mercer’s rankings for cities with the best infrastructure. The rankings are a result of a survey conducted in 221 cities around the world. In this survey, quality of infrastructure is measured by electricity supply, traffic congestion, availability of flights from local airports, quality of public transportation, telephone and mail service, and availability of water. As businesses continue to expand beyond domestic borders, it is vital for cities that wish to be relevant in international business to have a solid infrastructure.
According to Mercer, infrastructure and quality of life surveys are conducted to help multinational companies compensate employees justly when they are sent abroad for work assignments. Slagin Parakatil, Senior Researcher at Mercer argues that “infrastructure has a significant effect on the quality of living that expatriates experience…and a city’s infrastructure can generate severe hardship when it is deficient.” Ultimately, infrastructure aids in the flow of the production of goods and services and is thus vital to economic stability and growth. Infrastructure is also a key indicator of ease of doing business and so it is no surprise that Singapore as a country ranks first in the world in this category.
The relationship between a city’s infrastructure and its appeal to international businesses is highly correlated. Companies are much more likely to expand into a market if there is a solid infrastructure because then they can focus on accomplishing business goals and objectives, instead of worrying about transportation or finding clean water. As Mercer points out, companies use quality of infrastructure as a measure for determining compensation. Therefore, companies can minimize costs by investing in cities with sound infrastructures.
I encourage you to check out Mercer’s top 50 cities for both infrastructure and quality of living. Also, feel free to comment below on how you think infrastructure impacts international business.