Rapid Urbanization: Our sprawling urban landscape
This article was updated May 21, 2020.
By 2030 there will be an impressive 8.5 billion people walking the earth. While over half the global population currently lives in cities, more people will continue to choose city life in the years ahead. By 2050, we will have seen an increase in city-dwellers, constituting in 68% of the world’s population living in cities.
As more people move to urban areas, cities will get larger and we’ll have more of them, including megacities in places many of us have never even heard of today. In 1990, there were only 10 cities with more than 10 million people, but by 2030 we will have 43 such megacities, mostly in developing countries. Eight of these megacities will be in China, and seven will be in India.
As millions of people move to cities every week, they will also place a huge strain on space, city resources, energy requirements, and infrastructure costs, forcing homes, offices, and cities to become smarter and more efficient.
With over half of the world’s population already living in urban areas, cities are draining a large portion of the world’s energy supply and are responsible for around 70% of global energy-related greenhouse gas emissions. One area of focus is transportation, as cities need to be planned around people, not cars, with increased investment in zero-carbon public transport, footpaths, and protected bike lanes. C40 cities reported that a concerted effort to reduce consumption-based emissions from private transport in cities could result in a 28% reduction in emissions by 2030.
Cities are draining a large portion of the world’s energy supply and are responsible for around 70% of global energy-related greenhouse gas emissions.
As city populations increase, a greater premium will also be put on space, requiring spaces to become smaller, multi-use and more intelligent. For the growing contingent of millennials who are faced with a slowly recovering economy, affordability and availability of housing is a challenge, especially in large cities like New York, San Francisco, London, and Hong Kong. To deal with this supply-demand imbalance, micro-housing and co-living have become key trends in U.S. cities. Co-working spaces are also on the rise. In 2008, there were 160 coworking spaces worldwide; a decade later, there were 18,700.
Denser cities has also led to a surge in the number of smart city and micro-living initiatives — smart grids, networked LED streetlights, public Wi-Fi, water management etc. Smart city projects have nearly doubled over the past few years, and it’s predicted that by 2025, smart city spending could increase to $2.5 trillion.
As larger cities like New York, San Francisco, Portland, and Houston all continue to see overall increases in population in the coming years, they will also likely experience an exodus of younger generations as they move to secondary cities and surrounding areas. In 2017 and 2018 combined, 81,000 residents in the 25 to 39 year-old age range left large US cities. With the intention of finding a better quality of life for a lower cost of living, these younger generations are moving to places like Raleigh, North Carolina; Madison, Wisconsin; New Haven, Connecticut; Richmond, Virginia; and Boise, Idaho. The biggest incentive for this transition appears to be housing affordability. Based on average income, millennials are able to afford 30% of homes on the market in Oklahoma City. In contrast, they can afford barely 2% in San Diego.
It’s not just individual cities that contribute to the world economy. The real driving force is an increase in megaregions, or larger combinations of cities and metropolitan areas that will compete for market position. There are 40 megaregions throughout the world that are home to 18% of the global population and produce about 66% of the world’s economic activity. The connectivity throughout megaregions enhances the flow of information, goods, and talent, supporting an economy full of innovation.
There are 40 megaregions throughout the world that are home to 18% of the global population and produce about 66% of the world’s economic activity.
Of today’s megaregions, Boston to Washington DC is the largest with nearly $4 trillion GDP, making it the 7th largest global economy. China has also been developing multiple city clusters, such as the Guangdong-Hong Kong-Macau Greater Bay Area in southern China. Each region within this megaregion is connected by powerful infrastructure and high-speed rail, enabling people and businesses to operate efficiently across cities, producing a GDP of $1.5 trillion (USD), making it larger than Spain or Australia as an economy and accounting for a third of China’s economic output. Europe’s largest megaregion spans Ruhr and Cologne in Germany, Amsterdam and Rotterdam in the Netherlands, Brussels and Antwerp in Belgium, and Lille in France. Combined, these regions have a population of nearly 60 million people, and produce a light-based regional product (LRP) of $1.5 trillion (USD), an output larger than Canada’s.
As megaregions become more established, they are also creating industry hubs, or areas of focus in which they excel. For example, the Northwest Europe megaregion is the top hub for Tech, Finance, Creative, and Tourism industries, as well as a strong presence in Disruptive Technology Firms. Megaregions in China tend to perform well in Engineering, Design, Mobility, and Logistics, and US megaregions are proficient in terms of Software, Medicine, Finance, Business Services, and Leisure.
Large corporations, like HP, along with governments and city officials need to address the opportunities and challenges posed by this rapid urbanization. Looking for ways to enable cities, homes and offices to be more sustainable and efficient. Creating new services customized to urban users in cities all over the world. Developing products and services with new classes of consumers in mind.
Rapid Urbanization presents an amazing opportunity to think smarter about products, services, and our surroundings.
The opportunity is ours.
