Rapid urbanisation by Ian Powell

Rapid urbanisation by Ian Powell,
PwC UK senior partner

The global rise of cities has been unprecedented. In 1800, 2% of the world’s population lived in cities. Now it’s 50%. Every week, some 1.5 million people join the urban population, through a combination of migration and childbirth.

Inevitably, this rapid expansion is putting cities’ infrastructure, environment and social fabric under pressure. Over the next decade, New York, Beijing, Shanghai and London alone will need US$8 trillion in infrastructure investments. The numbers living in urban slums have risen by a third since 1990. Cities occupy 0.5% of the world’s surface, but consume 75% of its resources.

Rapid urbanisation brings major implications for businesses as they refocus their offerings, marketing and distribution towards an increasingly urban customer base with distinct needs and consumption habits. And they must be alert to new opportunities arising from lifestyles shaped by rising population density and readier access to resources.

For city leaders, the implications are also significant as they work to ensure that cities grow in a sustainable way. Leaders face tough choices trying to keep their cities liveable. Options being examined include floating cities – especially relevant for low-lying regions threatened by rising sea levels – and revitalising ‘ghost’ cities or failing economies through crowdfunding. A further approach is to build a new city around the latest technologies: the ‘smart city’. From Masdar City in Abu Dhabi to Migaa near Nairobi, spending on smart cities will hit US$1 trillion within two years.

However, for these manufactured cities, the financial, environmental and social costs can outweigh the benefits from technology. So another approach has emerged: harnessing citizens’ own ‘smartness’ by deploying the technology directly to them in order to keep cities growing and liveable. Examples range from developing an energy self-sufficient street in Austin, Texas, to pioneering groups of small production units in Barcelona. PwC has been working on many projects including, in India, the Mumbai Smart & Safe City.

Rapid urbanisation brings challenges and wider opportunities. One key opportunity is that it can provide part of the solution to another of the megatrends – demographic shifts – as the challenge of the ‘greying planet’ grows. In the future, the majority of the world’s ageing population will probably live in cities. And as people remain healthier for longer, their continuing contribution to social and economic value – for example, by working beyond traditional retirement ages, helped by advancing technology – may produce a ‘longevity dividend’ rather than a burden.

As all these initiatives and opportunities demonstrate, technology is changing the reason why cities exist. Their main attraction used to be jobs. Now people come seeking a better quality of life – at any age.