Sydney has been the named the 12th most attractive city in the world for creative individuals and businesses, according to the 2015 Global Power City Index compiled by Japanese research institute, Mori Memorial Foundation Institute for Urban Strategies.

First place went to London, followed by New York, Paris, Tokyo and Singapore, respectively.

Cities were ranked by their “magnetism”, or their power to attract workers and companies for economic, social and environmental development. Each city was measured on its economy, research and development, cultural interaction, livability, environment, and accessibility.

Sydney’s ranking has risen three places since 2012, and was the only Australian city to be included in the index of 40 cities.

Sydney performed best in cultural activities, achieving 8th place in this category due to its numerous attractions for visitors, cultural diversity, and creative entertainment. However, it performed worst in the accessibility category which factored convenience of public transport and ease of international travel, achieving only 26th place.

The fast growth of the world’s cities has made it more important for policymakers and developers to understand their strengths and weaknesses to improve urban development, said Dr Hiroo Ichikawa, Executive Director of The Mori Memorial Foundation.

“Today, over 50 percent of the world’s population lives in cities. Due to the influx of people, goods, money and information, cities have become hubs for global innovation and trendsetting, creating new energy that hastens further influx.”

Despite falling short in the livability and environment categories, London’s focus on redevelopment after hosting the 2012 Olympic Games has helped the city maintain its first place spot the last three years, said Mayor of London Boris Johnson.

“With a thriving economy, an unrivalled cultural scene, numerous top sporting venues, some of the best universities in the world, a low crime rate and much else besides, it is no wonder that London continues to outstrip other cities across the world.”

“As London grows to record levels we are working hard to build the new homes and deliver the infrastructure that will ensure we remain a global powerhouse for decades to come.”

Vishaan Chakrabarti principal of New York-based SHoP Architects also pointed out the challenges of urbanisation.

“By contrast, we are seeing the impacts of poorly planned urbanisation and consequent downgrades in quality of life in Beijing and Shanghai,” he said.

“The message is quite clear: in order for global cities to compete for increasingly mobile human capital, they must improve the quality of life they offer residents and businesses in terms of great design, efficient infrastructure, a cleaner environment and diverse cultural exuberance.”