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Balance sheet
The number and size of cities continues
to increase, with 41 megacities expected by 2030.
But as well as increasing wealth and improving living
standards, the best cities have to be smart.
world’s economic balance of power is also
likely to put pressure on rapidly growing cities
to provide healthcare, education, housing and
other key services.
Most of the new generation of megacities
will be in emerging economies, creating a
shift in the world’s demographic balance.
Indeed, three countries alone are expected to
account for 37% of the projected growth in
the urban population by 2050 – India, China
and Nigeria.That means that roughly one
billion more people in emerging economies
will become signi cant consumers. Evidence
suggests that as cities expand, income
inequalities increase;
and that the bigger
the city, the greater
the income disparity.
Some two-thirds of
the world’s urban
population now lives
in cities where income
inequality has increased
since the 1980s.
In China, for instance, the exploding
urban population has had a marked impact
on income disparity. In 2001 the di erence
between the average income of the 10%
richest and 10% poorest households was 13
times. By 2011 the di erence was 35 times.
Large cities lure the unquali ed from remote
areas, or abroad, and at the same time magnify
the returns of the skilled and talented, leading
to income polarisation.
This is by no means just a problem for
developing economies. London is a relatively
wealthy city by world standards, but a study
in 2011 showed that while the most a uent
districts had no inhabitants on unemployment
bene t in the previous year, in the most
deprived areas, some 29% of inhabitants
received bene ts.The only place in the UK
with a greater income disparity was Rochdale.
Technology, however, could make a big
di erence.A number of cities, including
Chicago, Rio de Janeiro, Boston, Barcelona
and Stockholm, have demonstrated how
‘smart’ planning can help by using IT
management and
control to improve the
quality and e ciency
of city services.
Smart cities
generally need strong
political leadership,
and to be relatively
independent from
central government policy.They tend to have
a mayor’s o ce or similar body that is able to
work across the city with di erent organisations
– environmental, education, transport and
so on – and place a great emphasis on the
technological training of their citizens.
Chicago has invested heavily in broadband
infrastructure and projects to encourage
technological innovation since the election
of mayor Rahm Emanuel, a formerWhite
House chief of sta , in 2011. His e orts to
increase minimum wages, encourage tourism
and invest in transport and technology – with
initiatives to roll out broadband and o er
widespread digital education – appear to have
been his most successful civic initiatives.
There seems little doubt that, to compete
at the top of the table, tomorrow’s cities have
to be smart.
Smart cities generally
need strong political
leadership
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SHARING THE WEALTH
A successful major city is usually beneficial to its
country’s economy. But if one city is left to flourish
at the expense of others it can be detrimental.
Notably, the UK runs the risk of falling behind by
relying too much on London for economic growth,
according to the Cities outlook 2014 report. While
the upturn in the economy appears to have benefited
London, cities such as Blackpool, Glasgow and
Northampton have continued to feel the impact of
the downturn, say the authors.
Despite recent initiatives, the UK lags behind many of
its international competitors when it comes to devolving
power to its regional cities and general economic
investment in integrated infrastructure projects.
The City Growth Commission investigated last year
what was needed to enable cities outside London to
complement the capital economically. Its chairman,
Jim O’Neill, the former Goldman Sachs economist,
wants a northern supercity, which he has tagged
ManSheffLeedsPool. Recommendations include significant
transport investments, with a high-speed tube network.
