Urban World: Mapping the Economic Power of Cities (McKinsey Global Institute)
Urban World: Mapping the Economic Power of Cities, a new report by the McKinsey Global Institute (MGI), projects the course of economic growth and demographic changes in 2,000 cities from 2007 to 2025.
The centre of gravity in the urban world will move decisively south and east. In 2007, 380 developed region cities in the top 600 cities by GDP accounted for 50 per cent of global GDP and 220 largest cities in developing regions contributed 10 per cent. Over the next 15 years, the makeup of the top 600 will change; 136 new cities will enter the list, all of them from the developing world and overwhelmingly (100 new cities) from China.
Contrary to common perception, megacities have not been driving global growth for the past 15 years, a trend that is expected to continue. MGI estimates that today’s 23 megacities will contribute just over 10 percent of global growth to 2025, below their 14 percent share of global GDP today.
Middleweight cities (those with populations between 150,000 and 10 million) in emerging markets are poised to deliver nearly 40 percent of global growth by 2025, more than the entire developed world and emerging market megacities combined.
By 2025, developing region cities of the City 600 will be home to an estimated 235 million households earning more than $20,000 a year at purchasing power parity (PPP). This compares with more than 210 million such households expected in the cities of developed regions.
Population in the City 600 will grow an estimated 1.6 times as fast as the population of the world as a whole. By 2025, the 600 will be home to more than 25 percent of the world’s working-age population, 15 percent of its children (aged below 15), and 35 percent of its older population (aged 65 and above).
For the report, MGI drew on data from Cityscope, its database of 2,000 metropolitan areas around the world that includes information on demographics, income, and household trends.