Since modern times, humanity has been on a steady and continuous path of migrating from rural villages to urban jungles. This process of “urbanization” originated more than two centuries ago, but the next urbanization wave will be of unprecedented scale and pace. As such, it will require radical methods and innovations to cope with ever growing megacities.

Our observations

  • According to the United Nations’ World Urbanization Prospects 2018, India, China and Nigeria will account for 35% of the projected growth of the world’s urban population between 2018 and 2050. By 2050, India will have added 416 million urban dwellers, China 255 million and Nigeria 189 million. Furthermore, New Delhi will overtake Tokyo as the world’s most populous city by 2028. Delhi and Tokyo are examples of megacities, with populations over 10 million. In 1990, there were only ten megacities, in 2018 there are 33 and that number will grow to 43 by 2030.
  • A 2016 study estimates that seven of the ten most populous cities will be in South Asia and Sub-Saharan Africa by 2050, and all of the ten largest cities in 2100 will be in these regions. Lagos, Nigeria’s capital, is estimated to have a population of almost 90 million by 2100.
  • The world’s 49 “alpha cities” include only one African (Johannesburg) and two South Asian cities (Mumbai and Delhi), while these two regions make up almost 40% of the global population. The top 15 list of the world’s most influential cities is similarly skewed, as it is fully made up of Western European, North American and Eastern Asian cities.
  • New research, using a new dataset on urban concentration levels, shows that developed countries have much less concentrated urban structures compared to developing countries (although the latter’s concentration levels are decreasing). Most importantly, the paper shows that urban concentration levels are positively correlated with economic growth in developed countries, but negatively in developing countries.

Connecting the dots

The modern urbanization process began with the industrial revolution in the late 18th century, when an increasing share of the population migrated to cities for work and living. This first modern wave of urbanization originated in Britain, where the urbanization rate jumped from 17% in 1801 to 54% in 1891, and then spread to other modern states in (Western) Europe in the course of the 19th century. The second wave of urbanization came after the 1960s and 1970s, when urbanization picked up and accelerated in emerging markets, whose annual urbanization growth (5.0%) showed a significantly faster pace than that of middle-income (3.5%) and high-income economies (1.6%) during that period. This was largely driven by the urbanization process in the East Asia and Pacific region, and in particular by China’s massive urbanization process, as more than 675 million Chinese migrated from villages into Chinese cities between 1960 and 2016. The current, third wave will largely be driven by countries with fast growing populations in combination with a low urbanization base. Most of these countries will be in South Asia and Sub-Saharan Africa, who have the world’s lowest urbanization levels (33.5% and 38.2% respectively). Both regions will have added 850 and 620 million urban dwellers respectively by 2050: a combined rural-urban migration population migration roughly the current size of Spain.
This third urbanization wave will be much more disruptive compared to previous waves. Although the first wave of urbanization was a novelty, it was gradual, as it occurred throughout several centuries, while the second wave was driven by a more government-led urban development and therefore more organized (e.g. China’s governmental “Hukou” system). The third wave will be of much bigger scale, while happening largely in poor countries with less effective governments and unstable societies, such as Congo, Niger, Pakistan and India. Megacities arising in these countries will have insufficient infrastructure, resources and institutional capacity to handle this unprecedented flow of rural migrants,

which is already visible. For example, women in Dhaka often don’t drink enough water because there is a severe shortage of toilets in the city, while Lagos faces severe health problems because two-thirds live in its dirty and environmentally dangerous slums. Furthermore, the traditional link between economic growth and urbanization seems broken for these cities. As we have noted before, Africa’s urbanization process doesn’t generate the growth and productivity experienced during the European and Asian waves of urbanization, because many poor Africans end up in the enclosed and informal economies of urban slums (instead of higher value-added and productivity sectors like manufacturing or services) and do not benefit from urban public services (i.e. education) or network effects because of severe segregation. Equivalent poverty traps are observed in South Asian slums.
With already a third of all urban South Asians and over half of all Sub-Saharan Africans living in slums, new radical measures are needed to manage this urbanization wave. A first positive remark is that both regions have a unique opportunity to get their cities right from the start, by using digital technology to overcome structural problems without establishing the necessary infrastructural investments, a process called “leapfrogging”. Examples are establishing low-carbon smart grids, digital payment systems for the unbanked or sharing capital goods with other citizens. Furthermore, with the accelerating rise of smartphone penetration in emerging markets, data can be used by governments for better and more efficient smart urban development, helping those currently excluded in urban slums to benefit from urban network economies (e.g. India’s Smart Cities Mission). And while many are still unconnected in South Asia and Sub-Saharan Africa, more natural interfaces (i.e. voice) and public-private projects (i.e. Facebook’s Free Basics initiative) also provide economic incentives to boost digitization in these regions.

Implications

  • The modern process of urbanization originated in the West in the 18th century and will likely culminate in South Asia and Sub-Saharan Africa in the course of this century. However, new technologies might also reverse the flow of people migrating to cities. For example, self-driving cars allow people to live further away from their work, while VR headsets and a “tactile” internet render physical presence at locations less important.
  • European cities (long history of urbanization), Chinese urban planners (experience with managing large-scale urban migration) and smart city companies can export their expertise to places that will see a very rapid urbanization pace. For example, China’s social credit system might see even more radical adoption in these countries given the magnitude of their challenges. Leveraging South Asia’s and Sub-Saharan Africa’s “urban dividend” is also likely to lead to a massive acceleration of economic growth and productivity.
  • With emerging megacities of unprecedented scale (cities more populous than most current G7 countries), there will be increasing scarcity of space to build these sprawling urban jungles. As a result, expertise on developing currently uninhabitable land in South Asia and Sub-Saharan Africa, such as deserts and highlands, and on artificial island building, will become more valuable.