More than half of the seven billion people in the world live in cities, and this number will continue to grow, so by 2045, more than six billion citizens will live in cities, according to a new United Nations report.
Leading megacities with more than 10 million people are: Tokyo, New Delhi, Shanghai, Mexico City, and Sao Paulo.
Urbanisation combined with a general increase in the number of people will increase the number of urban residents by two and a half billion in the next three decades, and most of this growth will occur in developing countries, particularly in Africa.
Of the foreseeable growth, India, China, and Nigeria will increase by 37 per cent. In India, the number of residents will increase by 404 million, in China by 292, and in Nigeria by 212 million.
The main challenge for these countries will be to meet the growing urban population’s needs in the area of basic services such as education, health- care, housing, transport infrastructure, energy and employment.
Urban populations have grown so fast that in 1990 there were only 10 megacities, and today they are 28, almost three times more. Sixteen are in Asia, four in Latin America, three in Africa, three in Europe, and two in North America.
Tokyo is the city with the largest population, 38 million citizens, followed by New Delhi 26 million, Shanghai 24 million, and Mexico City, Mumbai and Sao Paulo with about 21 million people each.
The New York City area, the third largest in the world in 1990, fell to ninth place and is expected to fall to 14th place by 2030, as cities in developing countries become more attractive.
For less than two decades, three-fifths of the world’s population, most often young and talented people will live in cities — but not in Barcelona, Paris or Los Angeles. Ahmedabad, Huambo, and Fushun will push out the western metropolis from the list of the 600 most developed cities of the future. Experts from the McKinsey Global Institute, who made a forecast of city growth in the next 15 years, believe that the “new city order” will put ahead of the company unexpected challenges.
McKinsey Global Institute (MGI) survey, released this year, shows that the 600 largest cities currently have 1.5 billion inhabitants and that by 2025 this number will exceed two billion.
Large cities will continue to be the hubs of economic development, as they will be concentrated in the largest number of companies, and consequently, they will be directed towards the migration of highly educated and talented people.
According to MGI statistics, the 600 largest cities now contribute to world GDP by 50 per cent, and in 2025 their contribution will rise to 60 per cent. Today, according to another analysis made by PwC, cities that offer the greatest opportunities for business are New York, Toronto, San Francisco, Stockholm, and Sydney.
However, what will change radically over the next 15 years is the power relation between the economically developed West and the previously poor East.
Namely, today 22 of the 28 most developed world cities (with the highest GDP) are located in developed countries, primarily in Europe and the US. Over the next 15 years, their cities will be taken over by Asian cities, mostly Chinese, hitting the list of three cities from North America and four from Western Europe. For example, Shanghai and Beijing will overtake Los Angeles and Paris, while Delhi and Bangkok will push out Detroit and Barcelona.
Long-term companies need to take into consideration these new markets. As for the famous and big cities of today, they have not been an interesting market for some time, because for 15 years they have not recorded significant economic growth. Apart from the economic and population, growth is on the side of urbanisation. The population in the most powerful cities of the world will grow 1.6 times faster than the world average.
Despite the fact that most developed countries have major problems with population ageing, MGI research shows that on this list most developed in the near future, 423 cities from developing countries will contribute to the growth of the number of aged from around 80 per cent. Only in 216 of the most developed cities of China in 2025 will the new 80 million inhabitants retire.
Major cities are an engine of economic development because they attract talented and educated people: in Shanghai, for example, 100,000 fresh graduates are looking for jobs every year, and 28 per cent of Shanghai employees are college educated.
The new big cities are growing and developing in a different way than the one we used to. In the Indian city of Ahmedabad, which Forbes proclaimed last year as the third-fastest growing city in the world, almost half of the properties are owned by social cooperatives.
Only from the list of 600 most developed cities 140 million households will be found in this status category, of which 120 million from developing countries, and as many as 75 million ‘competent’ will be from China.
The number of wealthy households with revenues over $70,000 annually and will increase to 30 million in Canada, South Asia, and Latin America, which is about the number of rich people expected in Western Europe and Northeast Asia.
Stefano Virgilli
stefano@virgilli.com
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