In 1970, there were two megacities (defined as populations > 10 million) — Tokyo and New York. Today, there are 23 megacities, with the total expected to rise to 41 by 2030. This expectation rises a question: In a fast-changing world, can cities be built with long-term perspective?
In 2008, the world reached a milestone. For the first time in history, the majority of the world's population lived in cities. By 2050, at current rates of urbanization, the world will be two-thirds urban, a reversal of the global distribution pattern of 1950.
While centrally planned urbanization has its challenges, unplanned urbanization has its costs as well. Roughly 32% of city dwellers in 2050 will live in slums. Subsisting on informal economies to a large extent, some slums have become ungoverned and unserved cities within cities, making them fertile recruiting grounds for criminal and terrorist networks. The idea of inclusive urbanization is gaining traction but will require real political commitment and innovative mechanism.
Successful urban solutions will entail public and private cooperation. Meeting the challenge will require the creativity and investment of the private sector alongside the long-term vision and funding of the public sector, as well as a dedication to inclusive growth.
By trying to do so, many established cities in mature markets face the challenge of retrofitting and upgrading their existing infrastructure. In a time of fiscal stress, policymakers and the public have tended to favor new projects, but maintaining and upgrading existing infrastructure is also essential. Extracting additional value from existing assets, whether through optimization or creating new revenue streams, can be an alternative to building new infrastructure.
On the other hand, future cities built on driverless transit systems, smart buildings and green
spaces are already beginning to emerge. Innovation to reduce the cost curve of infrastructure is helping cities to become sustainable and more habitable.
Net zero energy — where the renewable energy generated by a building in a given year equals the total energy the building uses — has become a goal for many buildings around the world and greenfield urban experiments serve as test beds for addressing environmental and sustainability challenges.
Within decades, cities are likely to become as powerful, if not more so, than nations themselves. Local city governments are better positioned to understand the specific needs of citizens and tend to be pragmatic (and less driven by raw politics) in their approaches to urban challenges. The potential for megacities to emerge as the world's most important economic entities will have profound effects on future geopolitics, governance, and corporate plans.
Nobiletec is a multi-national consultancy firm specializes in B2B, B2C and P2P FinTech solutions.