The Great Cities of 2025

For the American mayor who looks upon his or her city and sees the next great economic dynamo, a recent report from McKinsey and Company should give some pause: the economic titans of the future lie well beyond the horizon.

The report, Urban World: Mapping the Economic Power of Cities, analyzes data from the 600 most prosperous metropolitan areas. These areas not only contain one fourth of the world’s population but also generate more than half of the world’s GDP. Using economic projections the report contends that by 2025 this “City 600” will hold an even larger share of global production and its composition will have a distinctively eastern flair.

Currently, a remarkable 216 Chinese cities make the City 600. McKinsey projects that those cities will account for 30 percent of global growth between now and 2025.  However, with its growing economic strength, China is merely the standard-bearer for a larger shift towards the developing world. The report projects that 230 cities from the developing world will replace shrinking cities from North America and Western Europe on the list by 2025.

What we will witness, the report contends, is not so much a paradigm shift from New York and London to Beijing and Mumbai, but rapid growth among a variety of “welterweights” who are growing faster than even the world’s largest cities.

The authors contend that these welterweights – metropolitan areas with between 150,000 and 10 million people – will grow faster than our existing megacities because the infrastructure of many existing megacities has failed to keep pace with growth. Of the 13 welterweight cities that will cross the 10 million-person threshold to megacity status, Chicago is the only one in the developed world. The others include cities like Dongguan, China; Lagos, Nigeria; and Lahore, Pakistan. Without better infrastructure, the largest cities are losing the cost-saving advantages associated with larger populations.

The demographic and economic growth of cities in the developing world will bring benefits for the residents of those cities. McKinsey projects that in these growing cities median incomes will rise significantly, the middle class will expand, and with those changes millions more consumers will begin to buy for taste rather than necessity.

Yet, if the future looks bright for the Global South, what are the hopeful urban policymakers of the developed world to do?

The report contends that the developed world must build relationships with cities like Ahmedebad, Fushun, and Vina del Mar. These cities will provide important opportunities to boost local exports as the cities’ rapid growth will require massive infrastructure investments and its residents will desire more of the trappings of the middle class.

The message of the Urban World report is clear: the cities of the developing world are taking off and the cities and companies of the Global North ought to get on board, or risk being left behind.