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Markets & Geopolitics

The century of cities

Only 25% of the world’s population lived in cities in 1980. By 2080 that figure is expected to be 85%. This is the century of cities.

Professor Greg Clark CBE, Chairman, The Business of Cities
13 September 2018

Only 25% of the world’s population lived in cities in 1980. By 2080 that figure is expected to be 85%. This is the century of cities.

In the developing world this means the expansion of established cities, the fast growth of new cities and the rediscovery of ancient trade routes as catalysts for development. In the developed world it means a process of metropolitanisation: where larger cities grow and neighbouring cities form inter-linked agglomerations.

Urbanising century

This urbanising century is synchronised with four other major trends: global population will stabilise at just under 10 billion (we think); the climate emergency drives new energy and transport systems; new technologies spur science, medicine and trade; and the global centre of economic gravity shifts decisively to south and east.

Other things being equal, cities are good for us. A new science of cities is evolving. The World Bank’s 2009 World Development Report showed that the rise in living standards in lower income countries is correlated with urbanisation: cities reduce poverty, they don’t cause it. Recent OECD studies have shown the economic advantages of urban proximity and exchange: cities help make businesses more productive.

The IPCC observes that cities are the key sites for climate change action: smarter cities can be very environmentally efficient. Reports from the UN highlight the importance of well-run cities to secure development goals. In almost all fields of daily life, the city is an important context, or shaper, of life chances and human outcomes. The promise of global urbanisation is a better life and a better planet.

Major reform

A complex jigsaw emerges as we assess how to use new technologies, new sources of wealth and capital, and the surge of interest in cities to shape better futures. This involves major reforms in how cities are planned and managed, and much more ambitious agendas about urban restructuring and infrastructure investment.

Growth in cities is now a certainty; but whether that is bad growth or good growth depends on other crucial variables.  These include the quality of urban leadership, infrastructure investment and metropolitan planning, and how far they are combined. It also includes how the five new urban economies will drive land and systems reform: the knowledge and innovation economies, sharing economy, circular economy and experience economy can all act as catalysts for better urbanisation. They also drive new real estate business models.

The built environment of cities is undergoing profound change. Real estate must take on three new pressures and adjust to the changes they bring: the integration of public and private space presents a stewardship conundrum; the specialist requirements of new industries and enterprises involves new amenities and infrastructures, changed business models and increased flexibility; and the more intensive use of all space means a new life cycle approach and distinct asset management tactics. New zones, districts, quarters and precincts are emerging as new populations and economic activities find their spatial logic.

We are only one third of the way into this century of cities, but we can already see real estate is in reform. And that change will be more radical than any of us imagined.

The World Built Environment Forum facilitates industry leading discussions harnessing the enormous potential of the 21st century's people and places.