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New in Town: Megacities May Be the Norm by Mid-Century

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Millions of people around the world are heading toward cities at an unprecedented rate –- and it’s going to be a crunch.

Many of those new arrivals will find a better life. Others won’t. For governments, businesses and policymakers trying to manage that explosive growth, the pace of this mass urbanization presents an epic challenge.

"The urbanization that happened after the industrial revolution in the highly-industrialized countries was much, much more gradual than urbanization is now," said Janice Perlman, an author and founder of the Mega-Cities Project. "Still, there was a lot of chaos and difficulty and a lot of environmental problems. But now it's just accelerated exponentially."

Today some three dozen cities around the world make the megacities list of more than 10 million population, including Tokyo, Beijing, São Paulo, New York, Mexico City, Mumbai and Dhaka, according to data compiled by Oxford Economics. By 2030 more than a dozen more cities will be added to the list.

Any look 25 years into the future is no more than a rough guess. But it seems clear that lots of people are going to be living a lot closer together.

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"It's as much to do with the lack of opportunity in rural areas as opposed to this great magnet of cities," said Graeme Harrison, an economist who tracks the growth of megacities. "Because everything else—such as unemployment and high cost—would normally act against people migrating to cities."

A hundred years ago just 2 out of 10 people on Earth lived in cities. Today more than half the world's population lives in cities, generating some 80 percent of global economic output. That could climb to 7 in 10 by the middle of this century according to Hot Spots 2025, a report prepared by the Economist Intelligence Unit for Citibank.

"These cities will have the creativity to meet each new level of challenge with new technology in a way we can't even imagine."

A major challenge these cities will pose for society will be the strain on resources. Globally, cities today represent 2 percent of the Earth's surface but use 75 percent of its resources, according to Euramet. As the urbanization trend accelerates, so, too, will issues of sustainability and infrastructure to support city dwellers.

"Over time, there can be supply constraints, they can run out of labor, their costs can become too high, or there can be other, competitive problems, like congestion or pollution," said Harrison. "But getting data on that across different cities or a uniform global data set on that—it doesn't exist."

Then there’s the government problem: Who runs these sprawling urban zones?

Urban "agglomerations"—the sprawling population concentrations that spill over beyond political boundaries—are more difficult to manage when multiple regional governments are involved with no clear overall authority.

"It's as much to do with the lack of opportunity in rural areas as opposed to this great magnet of cities."

That's one reason the most competitive cities will be those with strong institutions—from government to businesses to cultural groups—that can help foster growth and address problems that arise, according to the authors of the Citibank report.

Nowhere is that more evident in the developing world than in China, where a historic migration set in motion three decades ago is expected to add dozens of new megacities over the next 30 years.

"China is in a unique position in that it has a strong enough government that it can just do what needs to be done," said Harrison. "It's good at planning. If it sees a problem, it will solve it."

The most competitive cities are also those blessed with well-developed infrastructure, or the capital and political capacity to build it. That's created a major challenge for some already congested cities in the developing world.

Officials in Jakarta, Indonesia, for example, have been planning to roll out a local mass-transit system for years, said Harrison.

"But to actually construct that metro would cause so much disruption in the short run, and the traffic congestion is so bad already, it's almost beyond the point where you can install it," he said.

Rapid industrialization may help lift incomes and standards of living, but it also strains city services, like housing, education and health care. Despite ambitious construction of intercity rail and highways, Beijing's local roadways are routinely snarled with epic traffic.

Globalization also means megacities will increasingly compete with each other, fostering specialization in key industries or services—from finance to technology.

While the forces fueling the growth of megacities are fairly well established, the solutions to the challenges they face are far less clear. Much as the development of New York City was driven by unforeseen developments, like the construction of the Erie Canal, or waves of migration from Europe, the challenges emerging cites face and the solutions they deploy are impossible to forecast.

"These cities will have the creativity to meet each new level of challenge with new technology in a way we can't even imagine," she said. "Technology—if it's put in the service of the marginalized and the vulnerable populations—they will be able to use it to solve these problems."