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Urban economic clout moves east

Look to the Eastern Hemisphere for tomorrow’s top urban players in the global economy.

More than 20 of the world’s top 50 cities ranked by GDP will be located in Asia by the year 2025, up from 8 in 2007. During that same time period, our research suggests, more than half of Europe’s top 50 cities will drop off the list, as will 3 in North America. In this new landscape of urban economic power, Shanghai and Beijing will outrank Los Angeles and London, while Mumbai and Doha will surpass Munich and Denver. The implications—for companies’ growth priorities, countries’ economic relationships, and the world’s sustainability strategy—are profound.

About the Authors

Richard Dobbs is a director of the McKinsey Global Institute (MGI) and a director in McKinsey’s Seoul office; Jaana Remes, based in the San Francisco office, is a senior fellow at MGI; Sven Smit is a director in the Amsterdam office.

Recommend (45)
  • 16 MAY 2011
    Sourav Kundu
    Webcon Ltd.
    Kolkata, India

    ...Only proper planning, management, and development of the urban and rural capabilities will result in effective and sustainable urban development, no matter if it is in the East or West....

    .
    Sourav Kundu
    Webcon Ltd.
    Kolkata, India

    With India’s growing socioeconomic, geopolitical and technocommercial capabilities, coupled with the “Look-East” policy of the government, it is imperative to include the ever-growing urban agglomerations in the East such as Kolkata, Siliguri, Gangtok, and Guwahati as integrated and connected sustainable agglomerations. Moreover, recent sociopolitical changes in the eastern Indian states of West Bengal and Assam are also encouraging as growth initiatives are pursued. The ecological sensitivity of these areas and those that are adjoining will call for proper planning in terms of carrying capacity, transport requirement, energy conservation and use of renewable energy, optimized resource deployment and usage, and sustainable employment and capacity building in these societies, in tandem with the citizens’ aspirations of holistic development and access to better living standards.

    Efforts should be made to ensure that basic amenities such as health, education, civil services, transportation infrastructure, connectivity, and telecommunication services are made available to far-away towns and villages as well as rural agglomerations, to arrest the exodus of manpower to urban hubs that have an ever-increasing load and an ever-reducing capacity. Only proper planning, management, and development of the urban and rural capabilities will result in effective and sustainable urban development, no matter if it is in the East or West. A synergistic approach must be adopted by the global community to ensure a balanced development and growth.

    .
  • 11 APRIL 2011
    Milo Jones
    Visiting Professor
    IE Business School
    Madrid, Spain

    Statistics about urbanization in China have to be treated with caution....

    .
    Milo Jones
    Visiting Professor
    IE Business School
    Madrid, Spain

    Statistics about urbanization in China have to be treated with caution. Often, people begin by citing figures from an “authoritative” source, the UN Statistics Division, that says China is only 47 percent urban. Usually, they go on to discuss a wonderful convergence story for productivity and wealth in China compared to the US’s 82 percent urban figure, or Germany’s 74 percent.

    But the UN uses each country’s individual definition of urban. Dig into the details of the UN statistics and it turns out that the Chinese definition of a city is 1,500 people per square kilometer (though the overall definition is complex), and the US and German definition of a city is 400 people per square kilometer!

    In short, China is already a lot more urban than you’d think looking at the “authoritative” UN Statistics Division headline figure (which people assume are comparable because they all come from the “same” UN source).

    .
  • 7 APRIL 2011
    Yogendra Kumar
    Manager
    Renault India
    Chennai Tamil Nadu India

    The above list should include Chennai, also, as it is going to surpass Mumbai very soon....

    .
    Yogendra Kumar
    Manager
    Renault India
    Chennai Tamil Nadu India

    The above list should include Chennai, also, as it is going to surpass Mumbai very soon.

    In the future, Mumbai will have head offices only, and Chennai will have the manufacturing and service industry due to low labour and land cost compared to other metros. In addition, Chennai provides easy access to east Asia.

    .
  • 7 APRIL 2011
    Maxon Tuya
    Operations Manager
    Tiger Brands
    Polokwane, South Africa

    There is no doubt it is crystal clear that emerging markets will dominate or take a lead in the upcoming years. My concern, though, is that this research did not include African cities...

    .
    Maxon Tuya
    Operations Manager
    Tiger Brands
    Polokwane, South Africa

    There is no doubt it is crystal clear that emerging markets will dominate or take a lead in the upcoming years. My concern, though, is that this research did not include African cities, such as Johannesburg, Cape Town, and Durban and Lagos in Nigeria; or if it included them, then there is a concern that African cities will not be growing at the same pace compared to the BRIC and Asian cities.

    .
  • 6 APRIL 2011
    Tim Harrap
    Bridport Dorset England

    Robert Jacobson’s comment above is welcome in trying to give some perspective on the changing economic climate. However, the blunt instrument of this article’s diagnosis...suggests that the balance of power has clearly shifted...

    .
    Tim Harrap
    Bridport Dorset England

    Robert Jacobson’s comment above is welcome in trying to give some perspective on the changing economic climate. However, the blunt instrument of this article’s diagnosis and a similar portrayal of the car industry in a recent FT article suggests that the balance of economic power has clearly shifted eastwards. However much the historical and social analysts would wish for maintenance of the status quo, it will not stop mercantilists using this limited information to justify their decision to head east.

    .
  • 24 MARCH 2011
    Shyamadas Banerji
    Independent Consultant
    Arlington, VA USA

    It is notable that most of the top cities in 2025 will be in China and two in India. But I do hope that these cities are going to be livable. Already Mumbai and Delhi are choking on traffic...

    .
    Shyamadas Banerji
    Independent Consultant
    Arlington, VA USA

    It is notable that most of the top cities in 2025 will be in China and two in India. But I do hope that these cities are going to be livable. Already Mumbai and Delhi are choking on traffic with terrible infrastructure. They are practically unlivable. Governments need to develop different spatial urban plans that would improve the lives of residents.

    .
  • 24 MARCH 2011
    Robert Jacobson
    Principal
    Bluefire Consulting
    Tucson, AZ USA

    Fascinating theses, but they treat cities as so many machines populated by so many cogs. You count up the cogs and then determine which machines clatter the loudest. Victorian thinking....

    .
    Robert Jacobson
    Principal
    Bluefire Consulting
    Tucson, AZ USA

    Fascinating theses, but they treat cities as so many machines populated by so many cogs. You count up the cogs and then determine which machines clatter the loudest. Victorian thinking.

    What about sectoral differences? What about cities that, as they did in the mercantile days (to which we seem to be returning), specialize in doing one or a few things very right, rather than becoming significant merely by becoming crowded?

    We mustn’t have too much regard for economics divorced from Earthly reality. The reality is that devolution is happening, cities are increasingly on their own or at least allied in leagues rather than subordinate to central governments, and the order of the day is innovation.

    When you additionally factor in the penalties for growth in a declining-energy-resource world, you get a very different picture of what is important to cities’ well being and what can be done about it.

    For me, the jury’s still out on where the global “center” will be in this century. Or perhaps there will be many centers, so that East/West and North/South coordinates, like economic statistics, become too gross for accurate, precise forecasting.

    .
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