Asian Cities become Engines of Global Economic Growth

Area of Scanning: Economic System

Author: Jean Kunz

What is Changing?

The McKinsey Global Institute projects that over 60 percent of global growth will be generated by 600 cities. By 2025, these 600 cities will increasingly be found in emerging economies, especially in China and India. Many of today's middle-weight cities will join the rank of mega cities by 2025. Some of these cities are brand new urban centers. Cities draw migrants from rural areas, and migration from rural to urban areas is becoming increasingly one-way when younger generations of migrants decide to settle in cities. Established urban centers are overwhelmed with demand for housing, schools, and other social services, exerting pressures on local governments and generating social tension between long-term residents and newcomers. While established cities are teeming with life and economic activities, newly constructed urban centers are often 'empty towns' at the beginning. It takes time for these places to build up cultural and economic vibrancy.


Hubs of innovation can thrive in mega cities, such as the hi-tech parks, free-trade zones, leading to broader adaptation. Decentralization of decision-making can empower municipal governments to explore different models of growth. Newly built cities, with the right policies and economic activities, can leapfrog older, more established centers with new technologies, infrastructure. Smart cities will increase productivity by efficient use of infrastructure, reverting urban sprawl, reclaiming arable land.


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