The future’s urban. Over half of the world’s population currently lives in cities. Ongoing urbanization could see that number rise to 70% by 2050. And by 2030, experts predict that there’ll be 41 cities with more than 20 million residents. (There were two in 1950.)
As a result, cities are now the engines of economic growth in many countries: the OECD estimates that metropolitan areas with more than 500,000 residents drive 55% of the GDP of its member countries, and more than 60% of the growth.
Of course, urbanisation isn’t a new phenomenon. Cities have been steadily taking over from rural areas as the main drivers of growth and jobs since the first industrial revolution. And where the work goes, the people follow.
The differences are the speed at which it’s now happening (400,000 people move into East Asian cities each week), and the fact that we’re moving ever closer to one global market for goods and services. This means that cities in the developing world now have to compete directly with those in developed markets for everything from investment to tourism.
Build the right infrastructure and become a better place to live
In this highly competitive world, there’s only one way to stand out: by becoming a better place to live.
At EY, we’ve long believed that affordable and sustainable transport systems, housing and public services are the key to achieving this. But many infrastructure projects neglect to build in the most important thing – resilience.
Resilience is a city’s ability to respond to shocks, such as floods and terrorist attacks, and stresses, such as unaffordable housing.
Failing to consider it can be very expensive: the 2011 Bangkok flood caused estimated damages of $45 billion to the global supply chain, of which only $10 billion was insured. Yet very few really ask: “What’s the cost of not building resiliency into a project?”
At the other end of the scale, integrating resilience into infrastructure projects that solve multiple urban challenges can bring physical, social and economic benefits in the long term. In New York City, for example, development sparked by the High Line project is predicted to bring $4 billion in private investment and $900 million in revenues over the next 30 years.