Cities are what keep the global economic machine humming.
Over 80% of the world’s economic output is received from activities in cities – and more specifically, it’s expected that 60% of GDP growth occurs in just the top 600 urban centers.
Given the above, it’s fair to say that the destiny of humankind is directly linked to what happens in major cities. Further, how urbanization plays out over time could end up having a significant ripple effect on the economy, and we should pay close attention to such trends. Today’s infographic comes to us from Raconteur, and it showcases eight different ways that urban demographics are growing.
Between 1950 and 2018, we went from 30% to 55% of the world’s population living in cities. This has been driven largely by today’s middle and high-income economies in places like North America, South America, Europe, and Japan.
The next stage of urbanization will see us move to 68% – more than two-thirds of the world’s population – living in these urban conglomerations. It will be driven by countries in developing markets, creating a potent investing megatrend along the way. In total, there will be 2.5 billion more urban dwellers in 2050 than there are today. Many of these people will experience rising incomes in cities, increasing the global middle class to an unusual size. On the other side, it appears the world’s rural population has nearly flatlined, with expectation that it will peak in absolute terms in the next couple of years. Rural populations have been slowly growing since 1950 until this point.
There will be 43 megacities by the year 2050, which is more than quadruple the amount that existed back in 1950.
The changing geography of the world’s megacities will be one of the major forces that shape the future of the global economy and accompanying investment trends.