Traffic goes past the railway station in Mumbai, India

Mumbai in India is expected to be home to nearly 28 million people by 2030

Urbanisation in emerging markets will be the dominant force of global growth in coming decades. By 2050, some 5.2 billion people – most of the world population – will live in emerging-country cities, with just 440 of these urban centres accounting for half of global GDP growth.

Economic growth rates and urbanisation are clearly linked: just over half of the world’s population live in cities but they generate four-fifths of global GDP. Currently, 80 per cent of people in developed countries live in cities compared with 50 per cent in emerging economies; however, a catching-up means that by 2030 places such as Dhaka, Karachi and Lagos will be among the world’s 10 biggest cities.

The world’s 10 biggest cities today
(millions of inhabitants)

Tokyo 38.0
Delhi 25.7
Shanghai 23.7
Säo Paulo 21.1
Mumbai 21.0
Mexico City 21.0
Beijing 20.4
Osaka 20.0
Cairo 18.8
New York 18.6

Indeed, by then, 81 of the world’s 100 most populous cities will be in emerging markets – and 42 of the top 50.

Governments can push workers towards urban areas through policies on building consents, employment law or public transport. Increasingly, technology will be a tool too, as ‘smart cities’ develop.  But many, especially the young, eagerly move to towns to seek better jobs and higher wages. And sometimes they need not even move; development can make rural areas become urban.

Urbanisation typically means economies of scale, higher productivity and shorter distances to market. It can facilitate better economic infrastructure, such as education, healthcare and transport, producing clusters of specialist workers that foster innovation.

However, there is a risk that emerging-market cities grow too quickly, unable to generate jobs for the rapidly growing population, either forcing people to leave – possibly migrating abroad – or causing social unrest as the rural poor become urban poor.

The world’s 10 biggest cities in 2030
(millions of inhabitants)

Tokyo 37.2
Delhi 36.1
Shanghai 30.8
Mumbai 27.8
Beijing 27.7
Dhaka 27.4
Karachi 24.8
Cairo 24.5
Lagos 24.2
Mexico City 23.9

Many emerging-market cities lack the metro networks of western cities, for instance. The Asian Development Bank estimates that to sustain growth, Asia needs to invest USD1.5 trillion a year in infrastructure - 5.1 per cent of GDP. But some cities are already so big that it is too late to undertake major improvements to water, sanitation, energy, transportation or communications.

Urbanisation has negatives too, though – congestion, crime, pollution, inequality and high property prices. So while young rural dwellers move to the cities for better jobs, developed economies with ageing populations may see workers start to turn their backs on the cities.

Technology is making the world smaller, linking societies and labour in ways that previously required proximity.  With remote working, people may prefer to live and work from a country house rather than a small city flat, despite attractions such as amenities and entertainment.

Urbanisation rates have already peaked in some countries, including New Zealand, Switzerland and Poland. Given the high share of the population living in urban areas already, and demographic shifts and technology, urbanisation rates may even have peaked already.

This research was first published on 26 April 2017.
Source for box statistics: UN population forecasts.

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