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Rapid urbanization

Mass migration to cities will require new business models and infrastructure.

Cities have always been hubs for talent, capital and innovation. In the last decade, hundreds of large cities have been built in emerging and developed economies, attracting significant infrastructure investments. Understanding the advantages and challenges of future cities underpin this megatrend, helping us identify the next potential sources of growth.

The rise of the megacity

43   In 1990 there were only 10 cities in the world with a population exceeding 10 million—the so-called "megacities". By 2030, the number of worldwide megacities is projected to be 43.1

Supercities: Large and still growing

With more people in the world living in cities than ever before, their share of global growth is rising. In fact, the top 50 cities account for 8% of global population, 21% of world GDP, and are home to 45% of firms with more than $1 billion in annual revenues.2

What are the implications?

As cities grow large, they require significant investment in several types of infrastructure:
Communication networks
Transit and transportation
Social infrastructure
Housing

Large cities that offer good infrastructure, greater convenience and attractive job opportunities attract global talent. This leads to higher population densities and younger consumers with higher disposable incomes—offering more breeding ground for innovation-fueled growth.

Rapid urbanization can also potentially lead to growth opportunities beyond infrastructure. In young and growing emerging markets cities, opportunities should emerge in middle class consumption exposure, such as housing, appliances and cars. Inevitably, demand for leisure and media should also grow, as services such as waste management and logistics.