[EQ] Urban world: Mapping the economic power of cities

Urban world: Mapping the economic power of cities

The McKinsey Global Institute (MGI), March 2011

Available online PDF [62p.] at: http://bit.ly/gS8sBB

Global cities of the future: An interactive map http://bit.ly/eUfupm

 

“…………We live in an urban world. Half of the world’s population already lives in cities, generating more than 80 percent of global GDP today. But the urban economic story is even more concentrated than this suggests. Only 600 urban centers, with a fifth of the world’s population, generate 60 percent of global GDP. In 2025, we still expect 600 cities to account for about 60 percent of worldwide GDP—but the cities won’t be the same.

 

The earth’s urban landscape appears to be stable, but its center of gravity is shifting decisively, and at speed. Companies trying to identify the most promising growth opportunities need to be able to map this movement and spot the individual cities where their businesses are most likely to thrive.

Today, major urban areas in developed regions are, without doubt, economic giants. The 380 developed region cities in the top 600 by GDP accounted for 50 percent of global GDP in 2007, with more than 20 percent of global GDP coming from 190 North American cities alone.

 

Over the next 15 years, the makeup of the group of top 600 cities will change as the center of gravity of the urban world moves south and, even more decisively, east. One of every three developed market cities will no longer make the top 600, and one out of every 20 cities in emerging markets is likely to see its rank drop out of the top 600. By 2025, we expect 136 new cities to enter the top 600, all of them from the developing world and overwhelmingly (100 new cities) from China.

 

These include cities such as Haerbin, Shantou, and Guiyang. But China is not the only economy to contribute to the shifting urban landscape. India will contribute 13 newcomers including Hyderabad and Surat. Latin America will be the source of eight cities that include Cancún and Barranquilla…..”

“…..The database today allows us to offer insights into the evolution of the global economy and its demographics, household structure, and incomes. Projecting the economic and demographic evolution of cities over the next 15 years is inherently subject to multiple sources of uncertainty. We present in this report one scenario of how the urban world is evolving that provides a sense of direction to companies and policy makers……….”

Report Content:

Executive summary

Urban world: Mapping the economic power of cities

The City 600 will drive global growth to 2025

Middleweights will gain ground on megacities

Almost three-quarters of the City 600 are in emerging economies

The City 600 population will expand 1.6 times as fast as the global population

Declining household size expands demand for housing and other household durables

By 2025, emerging market cities will have more higher-end middle-income households than developed ones

Regions vary in the economic role of the largest cities

Companies should look at clusters of cities for market opportunities

Appendix: Technical notes

Bibliography

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