Among the highlights of this month's edition of McKinsey Quarterly is the firm's "Global cities of the future" map, an interactive web application that combines some urbane McKinsey gloss with good, old fashioned data to excellent effect.
As ever, this McKinsey offering is all about growth. In this case, they're referring primarily to the growth of the human population between 2007 and 2025, and the impact that growth will have on urban centers and the economies they support. McKinsey asks the big questions here: which cities are going to have the biggest impacts in 2025? Which will grow the fastest? Where are the dying cities? For anyone interested in the future of the human race, McKinsey's conclusions will lead to even more compelling questions.
To best illustrate the dynamic nature of the modern world, McKinsey identifies 600 cities that will drive economic growth over the next few decades; by 2025, the firm says, these 600 "will account for more than 60 percent of global GDP growth." From there, these cities serve as fodder for some vintage McKinsey analytics. The report's authors identify four key trends that will shape the future of global economics in the years to come:
•Megacities' per capita GDP is slowing down, allowing the middleweight cities to catch up. The megacities are just what you'd think they'd be: New York and Los Angeles in the US, Mumbai and Calcutta in India, London and Paris in Europe. While these cities will continue to drive GDP upward worldwide, the pace at which they do so will slow over the next 15 years. But fear not; middleweight cities will pick up the slack and provide big growth in the near-future. Examples of these include Atlanta and Houston in the US, Madrid and Milan in Europe, and Seoul and Bangkok in Southeast Asia.
•Emerging market cities are expected to contribute to around half of global growth from 2007 to 2025. Here's a fun fact: by 2025, emerging markets will have more households with incomes of $20,000 or above than will developed economies. It's a familiar refrain, a reality that is already upon us: cities in emerging markets will grow at a much faster pace than their counterparts in North America and Europe. The engine room of that growth is familiar, too; by 2025, the authors say, Chinese cities will account for 29 percent of the world's urban population growth. Shanghai, currently with around 17 million residents, will hit 27 million in 15 years. If McKinsey is right, Mumbai could be the world's biggest city in 2025 with a population of more than 28 million people (note: this excludes the Tokyo metropolitan area, which the map suggests would grow relatively slowly to by 1 million to almost 37 million).
•Hot spots: Population in the city 600 will grow 1.6 times faster than in the world as a whole. McKinsey gives us 25 hot spots that will be the epicenters of population growth around the world. It's the usual suspects here, with some wildcards thrown in: war-torn cities like Baghdad, Kabul and Kinshasa all make appearances in the top 25.
•Regions: The economic role of large cities varies widely between regions today—so will their future growth patterns. The world may well be flat, but regional dynamics are still more influential than those of individual cities. Each region's population trends will be as unique as they are now. For example, cities in the US and Western Europe will account for 76 and 61 percent of population growth from 2007 to 2025 respectively, while in China they'll account for 93 percent. Regional population trends will require regional solutions; housing requirements in Bogota, Colombia, for example, are distinctly different from those of its (relative) neighbors, Sao Paulo and Mexico City despite similar growth trends.
So what have we learned, us humble citizens of the modern world? From a distance, McKinsey's seems like a worn-out refrain; we all know that China is the next big thing in world economics. But the firm succeeds where it does so often: the illumination of compelling details that really make an argument (or in this case, a model) work. Good stuff.
See: McKinsey's interactive 'Global cities of the future' map
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McKinsey: Global cities of the future
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