BAKU, Azerbaijan, August 3. During the 13th
session of the World Urban Forum (WUF13), held in Baku in May 2026,
global consulting firm Boston Consulting Group (BCG) presented the
fourth edition of its flagship study Built to Change: Cities of Choice 4.0, which examines how
modern cities compete for human capital and investment.
The study is one of the most comprehensive comparative
assessments of urban environments, covering 80 cities worldwide.
The analysis is based on more than 5 million observations and over
200 indicators. Of the overall assessment, 80% is based on
objective statistical data, while the remaining 20% comes from a
survey of 24,000 residents.
The 80 cities included in the ranking were divided into five
global socio-economic groups based on GDP per capita and population
size: Established Powerhouses, Emerging Megacities, Established
Global Hubs, Prosperous Middleweights, and Emerging
Middleweights.
Baku entered the Cities of Choice ranking for the first
time. Alongside Tashkent, Almaty, and Astana, the Azerbaijani
capital was included in the Emerging Middleweights category,
demonstrating particularly strong results in terms of the pace of
transformation. At the same time, Baku’s leading position within
its group was driven by a high quality of life and a comfortable
urban environment.
The city achieved strong rankings primarily due to high
assessments in healthcare, education, housing, mobility, public
spaces, and cleanliness.
To discuss the key findings of the study, Baku’s position in the
global ranking, and the trends that will shape the development of
urban environments in the coming years, Trend spoke with Vladislav
Butenko, BCG Senior Partner and Managing Director, Global
Leader of the Cities and Regions practice; Grigory
Rubin, BCG Senior Partner and Managing Director; and
Ekaterina Shapochka, BCG Partner and Director.
Baku’s debut in the BCG ranking
According to Vladislav Butenko, simply being included among the
80 cities in the ranking is already a significant achievement.
"This is essentially the global top 80. We evaluate cities around
the world - from cities with populations of around half a million
people to the largest megacities - analyzing the full range of
factors that determine quality of life. Therefore, Baku’s inclusion
in this list means recognition of the city as one of the best
places to live based on a combination of key criteria," he
said.
According to Butenko, the Cities of Choice concept is
fundamentally different from other international rankings. "The
study includes cities that, based on a combination of criteria
important to people, are the best places to live. Unlike most
international rankings that assess individual aspects - such as the
quality of the urban environment, labor market, or level of
digitalization of public services - we take a comprehensive
approach to evaluating a city. The methodology is based on BCG’s
large-scale 2019 study, which identified the key parameters that
are most important for urban residents," Butenko noted.
According to Ekaterina Shapochka, the ranking is updated every
three years to reflect the current state of urban development. The
2023 edition of the study included three cities from Central Asia
and the Caspian region. At that time, a preliminary assessment of
Baku was also conducted as part of a pilot analysis, which later
made it possible to identify a clear positive trajectory.
"This time, we included Baku because the city is actively
developing. At the same time, we consider not only the scale and
importance of a city, but also the pace of change, as well as its
openness to the world and new trends," she emphasized.
Baku as a fast-changing city
Before discussing Baku’s results, it is important to understand
the logic behind the pace-of-change indicator, Butenko said. "Since
2019, we have seen that how quickly a city changes directly affects
its vitality - whether people will come, stay, or, on the contrary,
leave," he said.
According to him, the methodology used to assess this indicator
is based on a scientific approach and big data analysis. "We took
the full range of people’s assessments - both objective and
subjective, reflecting what really matters to them - and analyzed
to what extent these preferences could be explained by the city’s
indicators. We found that not all assessments are linked to the
current state of a city. Only when we added the pace of change,
meaning we began studying not just a static picture but the
dynamics of development, were we able to explain almost the entire
variation in evaluations," Butenko explained.
"Why is the pace of change so important? First, the world is
changing extremely quickly: technology, geopolitics, migration
flows, and residents’ expectations are all evolving. Today, it is
not enough for a city to simply be good - it must constantly
adapt," he continued.
"Second, people want to believe that the future of their city
will be better than its present. If they do not see positive
momentum, even residents of a good city begin to have doubts. This
can be seen in some cities in the U.S. and Europe: they are
objectively strong, but people look at the dynamics of the past
five years and begin to question their prospects," Butenko
emphasized.
Shapochka, in turn, noted that a significant share of Baku’s
positive changes is linked to the livability indicator. "Of course,
this is a subjective assessment, but it is precisely in the area of
livability that Baku has achieved the most noticeable progress. We
are seeing improvements in almost all areas - approximately 80% of
the indicators within this category," she said.
According to her, this covers a broad range of urban services
and living conditions that have changed significantly in recent
years. "This includes housing conditions, transport accessibility,
mobility, education development, entertainment, and leisure
opportunities - across all these parameters, Baku today looks
significantly better than in our pilot assessment in 2023,"
Shapochka noted. "Another thing that became especially clear this
year is that public spaces are extremely important for urban
residents - their accessibility, quality, the opportunity to spend
time there throughout the year, the presence of greenery, and a
comfortable urban environment," she added.
Grigory Rubin added that improvements in Baku are most visible
in those elements of the urban environment that directly shape
residents’ everyday experiences. "It is clear that a lot of work is
being done in the city - for example, in landscaping, public
transport development, and the expansion of pedestrian areas. All
of this is already significantly changing the urban environment,"
he said.
Competition between cities today
Butenko noted that today the perception of cities is gradually
shifting from a purely infrastructure-based approach toward a focus
on people and their everyday experiences. "When many people think
about cities, they still primarily imagine skyscrapers, bridges,
and monumental buildings. All of this is important, but above all,
a city is about its residents. Even if we look at it purely from an
economic perspective, without people - and especially without
satisfied people - an economy cannot function sustainably," he
said.
According to him, BCG’s approach focuses not on infrastructure
itself, but on the value it creates for people. "When we look at
infrastructure, we always ask: what does it give to a person? If it
is a bridge, it should not only be an impressive engineering
structure but also shorten the journey from point A to point B. And
if it is a pedestrian bridge, it should also make walking
enjoyable. Ultimately, this is what creates the feeling: ‘I like
living in this city,’" Butenko concluded.
Rubin, in turn, emphasized that modern competition between
cities is increasingly connected with attracting so-called mobile
professionals. "There are people for whom it does not really matter
where they work from - they can do it from anywhere in the world.
Take IT professionals, for example. These are exactly the people
that major cities are competing for today," he said.
He stressed that in addition to the quality of the urban
environment and transport accessibility, administrative, financial,
and reputational factors are becoming increasingly important. "When
a person chooses where to live and work, they consider a very broad
range of factors. This includes how easy it is to obtain migration
documents, issues related to capital movement, and how the city
positions itself. In other words, it is a much broader set of
parameters than just infrastructure. In some areas, Baku already
looks very strong, while in others there is room for growth. But
overall, the competition is precisely for this category of people -
so-called digital nomads, for whom the location of work truly does
not matter," he explained.
A city for residents
According to Vladislav Butenko, the Cities of Choice
study focuses not only on how tourists perceive a city, but
primarily on the quality of life of permanent and temporary
residents.
"Since 2019, we have seen that many cities are evaluated
primarily through the lens of tourism experience. Yes, tourists are
an important part of the economy. Paris, for example, is indeed a
beautiful city with rich culture and gastronomy. But our approach
focuses on a city not only for tourists, but primarily for
residents. In many cities, such as Dubai or Abu Dhabi, citizens may
account for around 10% of the population, while residents make up
100%. And there are also temporary residents," Butenko noted.
He emphasized that modern urban environments must take into
account the needs of different groups of residents, including
digital nomads. "Digital nomads are not necessarily people who move
to a new country every month. Some stay for several years, while
others follow the sun: spending winters in one place and summers in
another. For them, stable and fast internet is critically important
- in cafes, banks, anywhere - because they work remotely. They also
need convenient digital public services: the ability to obtain
permits and necessary documents online without standing in queues.
This is what they are used to. If a city can provide this
effectively, people come and stay. If not, they choose another
place," Butenko said.
Continuing the discussion, Ekaterina Shapochka noted that the
level of digitalization of everyday life has become an important
element of modern urban development.
"Globally, we wanted to measure how many so-called online adepts
there are in each city included in our ranking - people who
actively use digital services in their daily lives. Across all 80
cities in our study, around 19% of residents on average have
transferred most of their everyday activities online. To make them
comfortable living and working in a city, and to ensure they remain
loyal to it, cities need fast internet, convenient delivery
services and simple, user-friendly digital ecosystems," she
said.
She also pointed to the identified link between residents’
digital adaptability and their loyalty to their cities.
"Interestingly, online adepts tend to be more loyal to their cities
than those who use online services less frequently. Why does this
happen? Perhaps the city is so well adapted to this lifestyle that
people highly value its convenience and comfort. In this regard,
Baku is among the leaders by this indicator," Shapochka noted.
Butenko highlighted the importance of the advocacy indicator,
which reflects residents’ subjective perception of their city.
According to him, the index is based on answers to a range of
questions measuring a person’s long-term connection with the
city.
"These include questions such as: Do I see myself living in this
city in 20 years? Do I believe in its future? Do I see a future for
my children here? Do I feel that the city supports me? And so on.
We average these responses and obtain the final indicator for each
city. Baku’s score is very high - 86. Moreover, between 2022 and
2025, it increased from 58 to 86, which is a significant
achievement. This is a completely subjective assessment. Unlike the
main part of the ranking, where objective data is used, this
indicator reflects people’s sense of happiness and satisfaction
with life," Butenko emphasized.
Turning to the issue of housing, Shapochka noted that Baku
demonstrates strong performance in this area, although some aspects
still require further development. "Baku has a fairly good result
in terms of housing. However, if we talk about areas that could be
improved, this includes inclusiveness - particularly the employment
level of people with disabilities and the accessibility of public
transport equipped for people with limited mobility," she said.
According to her, rising housing costs have become a global
trend affecting most cities around the world. "Overall, housing is
becoming more expensive, while affordability is declining. This is
a global trend linked to higher mortgage costs and other
macroeconomic factors. Baku is also experiencing this trend. At the
same time, a relatively developed rental market allows the city to
remain in the upper part of the ranking in terms of housing
affordability," Shapochka concluded.
Baku’s development priorities
Butenko believes that Baku’s development priorities over the
next five to ten years should combine addressing existing gaps with
further strengthening the city’s advantages. "On the one hand,
existing gaps certainly need to be addressed. But on the other
hand, it is equally important to use and develop the city’s
strengths. The fact that people stay in Baku because they like this
city is already a very important indicator," he said.
"We have already mentioned that we see significant progress in
terms of urban quality of life. For example, Baku demonstrates very
strong results in healthcare - this indicator increased from 83 in
2022 to 93 in 2025. This is one of the best results in our global
sample, and the positive trend continues. If this trajectory is
maintained, Baku could become one of the regional centers of
medical tourism, similar to how people today choose Türkiye or
Egypt due to their successful combination of price and quality,"
Butenko noted.
He also highlighted Baku’s potential in education and human
capital development. "In education, we see significant progress. In
the future, Baku could become a city where people come to study not
only from different regions of Azerbaijan, but also from other
countries," he said.
Speaking about the urban environment, Butenko drew attention to
the growing role of public spaces. "More and more people are
working according to the ‘third place’ model - not from home and
not from an office, but from flexible urban spaces. Baku’s climate
is favorable for this, so such formats will continue to grow, and
the city will become even more integrated into the global
environment," he concluded.
Shapochka identified safety and economic opportunities as key
areas for Baku’s future development. "For both people and capital,
safety is extremely important today. In this regard, Baku is in a
relatively strong position both in terms of objective indicators
and residents’ subjective perception. Increasingly, safety is
becoming one of the key criteria when choosing a city for
relocation or business operations," she said.
"Baku’s potential in terms of economic opportunities has not yet
been fully realized. This includes the speed and cost of company
registration, access to financing, business support mechanisms, as
well as opportunities for people in terms of career growth and
self-realization. We analyze, among other things, the number of
vacancies and how well they match the professional profiles of city
residents. The city could engage more actively with companies -
both existing businesses and potential newcomers - to better align
the labor market with people’s opportunities for professional
development within the city," she said.
She also highlighted innovation potential as another promising
area. "Opportunities for innovation are equally important. We
closely assess the volume of venture capital, the number of
startups, and the level of development of acceleration and
incubation infrastructure. More and more people are focusing on
self-employment and creating their own products. In this regard,
Baku also has significant potential," she said.
Butenko emphasized that particular attention should be paid to a
people-oriented economy. "This is primarily about business
opportunities and reducing income inequality. Essentially, it is an
economy designed for people. This is where Baku can strengthen its
position and move into a higher category of our global ranking.
At the same time, in terms of the urban environment, the city is
already at a very high level. There is potential to move from the
category of ‘very good’ to ‘the best’. I would not be surprised if
Baku eventually becomes a recognized leader in urban comfort among
cities in the Caspian region and Central Asia. This is entirely
achievable within a five-year horizon, because such projects can be
implemented relatively quickly," he said.
Grigory Rubin emphasized that a key factor in a city’s
development is its strategic ambition and understanding of its role
in the global urban system. "A lot depends on the city’s ambition.
What is its goal - to be a comfortable city primarily for local
residents, or to become one of the international hubs competing for
people from around the world? The requirements for the urban
environment directly depend on this," he said.
"For expatriates, it is important that they can quickly adapt
and build their lives in a new place. If a city wants to attract
expats, it needs to create conditions for seamless integration and
comfortable everyday functioning. Among other things, this includes
the availability of high-quality international schools with
English-language education. If a city is focused primarily on local
residents, these requirements may be less critical," Rubin
added.
Butenko stressed that urban development is not about choosing
between the interests of residents, tourists, or mobile
professionals - these objectives reinforce each other, although
they require clear priorities. "When a city is comfortable for its
residents, tourists and digital nomads who come to live and work
there also feel it. And when they see happy people in the city,
this positively influences their own experience," he said.
At the same time, he emphasized that urban development does not
happen automatically. "You cannot simply do everything well and
expect success to come by itself. In most cases, cities make
strategic choices: where to invest and which priority areas to
develop. For example, Dubai has chosen a strategy of attracting
specialists in the crypto industry, while Saudi Arabia is focusing
on artificial intelligence professionals. These are very specific
and targeted decisions. A city needs to make strategic choices and
focus on implementation. It is impossible to pursue all ideas
simultaneously - there are not enough resources or management
capacity," Butenko said.
Ekaterina Shapochka noted that Baku could achieve significant
progress in several areas in a relatively short period of time
through digital solutions and technologies that are already
available.
According to her, one of the key areas with growth potential
remains interaction between citizens and urban governance systems.
"Given the development of artificial intelligence and
digitalization, this is exactly the area that could be improved
relatively quickly and, as a result, significantly increase
residents’ satisfaction," she said.
She also highlighted the importance of adapting cities to
demographic shifts and increasing life expectancy. "We also assess
cities’ readiness for longevity. It is very important to
distinguish between life expectancy and healthy life expectancy. In
this regard, Baku is currently positioned at a medium-to-high
level, but this area will certainly continue to develop," Shapochka
said.
She also drew attention to the importance of urban connectivity
and the quality of planning. "This is not only about transport, but
also about convenient pedestrian routes and how easily residents
can access schools, shops and essential services. From an urban
planning perspective, this is also one of the areas where Baku
should continue to develop," Shapochka concluded.
Cities of the future
According to Vladislav Butenko, three key trends will shape the
future development of cities: rising global uncertainty, changing
patterns of mobility, and people’s desire to save their most
valuable resource - time. "First, uncertainty in the world will
only increase. Therefore, cities must be prepared to welcome people
who, for various reasons, decide to leave their current places of
residence," he said.
In his view, a new type of global mobility is already emerging,
driven by crises and the search for alternative cities for living
and working. "Take Dubai as an example. More and more people -
especially those who work remotely or can relocate frequently - are
starting to look for alternatives. Some choose Singapore, others
Tashkent, Vietnam, Hong Kong or smaller cities in Southern Europe.
The question is how Baku can become one of these cities. And this
is no longer a theoretical discussion - it is a question of today,"
Butenko said.
He also emphasized the importance of uninterrupted digital
connectivity as a new form of basic infrastructure. "The second
trend is universal connectivity. A person should be able to move
around the city seamlessly - from home to the office, to a park and
so on, without losing access to services. This is already being
implemented, for example, in Japan. Today people say: the
infrastructure is fine, but it needs to work for something. The
main demand is to save people’s life time. The task of a city is to
reduce the time people spend on transportation, everyday tasks and
administrative issues, and increase the amount of free time,"
Butenko said.
According to him, this "saved time" is becoming a new value of
the urban environment. "Cities want people to spend this time on
experiences, emotions and lifestyle - on things that shape quality
of life and emotional attachment to a city," Butenko concluded.
