Cities Shifting Global Economic Power– New Growth Engines of 21st Century: Changing World Order to Create Wealth…

Cities (urban centers) are main creators of economic wealth, generating over 70% of world’s Gross Domestic Product (GDP) according to United Nations Report. Most industries and businesses are located in or within immediate vicinity of urban areas… Urban regions are the engines of national economies; in U.S., eight out of ten people live in one of 330 urban areas and more than half live in 39 areas with populations of one million or more…

Urban economies account for 83% of national income and virtually all employment in the advanced technical and service sectors… Cities are great democratizers of society, where people of different cultures, languages, religions… meet, mix, work together. Urban areas provide the energy where creativity and intellectual ferment develops, they are the foundation– where science and technology, art and fashion, banks and finance, music and entertainment, research and higher education… can flourish.

However, in order to harness the economic benefits of urbanization, policy-makers and private sector must do more effective planning and attract sustained investment in infrastructures, e.g.; railroads, highways, bridges, airports, ports, water, power, communications, energy… Urban centers face critical challenges, and it’s essential that government and business form partnerships to make urban areas more competitive, sustainable, resilient…

In the article Competitive Cities by John S. Ratcliffe writes: There is general recognition that 21st century is the century of cities. Cities are moving center stage, and both commercial and cultural worlds increasingly are characterized by cities rather than by countries… Cities are fast coming to function as the basic motors of the global economy… Indeed, it’s argued that there is a new form of global ‘city-centric’ capitalism where cities operate as territorial platforms for much of contemporary economic activity, and as important staging posts for the operations of multi-national corporations.

Urban centers (cities) thrive on creativity, productivity, innovation, and as multifaceted urban milieu that are simultaneously embedded in worldwide business networks… And a common challenge for cities across the world is competitiveness and the key to competitiveness is entrepreneurship. Successful cities engender an environment in which creative and innovative individuals and organizations can gather, grow, thrive… According to Jane Jacobs; the basic idea is to use whatever commercial, political strengths, resources that a locality (urban center) already has, but which it may have neglected, wasted, overlooked…

In the article Hyper-Connected Cities Are Taking Over the World by Tanvi Misra writes: We are moving toward a new era where insular, political boundaries are no longer as relevant. More people are identifying as ‘global citizens’, and that’s because more people are more connected than ever before… According to Parag Khanna; change is taking place in the world today in which cities– not nations– are the key global players… where the new maxim is ‘connectivity is destiny’… 

Urban areas are building physical and institutional connectivity among each other, and growing demographic and economic power; they are the drivers of new world order. They are power centers of global commerce,  social, environmental… engagements. Urban areas are key element in the evolution of world change for many reasons:

First, the world is urban; if you want to understand where people are, people are in urban areas… Second, most of the world’s economic power is concentrated in urban areas, and therefore they become the pivotal entities you need to analyze to understand the new world economy. Third, urban areas are increasingly connecting to each other; they are forging their own diplomatic networks….

According to McKinsey Global Institute: The urban world is shifting. Today only 600 urban centers generate about 60% of global GDP. While 600 urban centers  will continue to account for the same share of global GDP in 2025, this group of 600 will evolve into a very different membership. Over the next 15 years, the center of gravity of the urban world will move South and, even more decisively, East… Today major urban areas in developed-regions are without doubt economic giants:

Half of global GDP in 2007 came from 380 urban areas in developed-regions, with more than 20% of global GDP coming from 190 North American cities alone. The 220 largest urban areas in developing-regions contributed another 10%… But by 2025, one-third of these developed-market urban areas will no longer make the top 600; and one out of every 20 cities in emerging-markets is likely to see its rank drop out of the top 600. By 2025, 136 new urban areas are expected to enter the top 600, all of them overwhelmingly from developing world, e.g.; 100 new urban areas from China

Urbanization is essential part of a nation’s economic development towards a stronger and more stable future…  Most of the world’s largest cities are in the world’s largest economies, which is further evidence of this link between economic wealth and cities. Cities and towns have important roles in social transformation. They are the centers of artistic, scientific and technology innovations, of culture and education…

The history of cities and towns is inexorably linked to that of civilization in general… They attract talents and skilled labor that allow specialization in knowledge, skills, and management capabilities possible, and they can achieve economies of scale, agglomeration and urbanization… Cities are the driving force for economic development, and economic growth also stimulates urbanization… These positive and evolving relationships are a reality in most countries…

Throughout the world, the integration of the global marketplace is causing a fundamental shift in the way nations think about urban economies. The global economies are increasingly system of urban-centered regional economies that transcend municipal boundaries. We used to think of countries as homogeneous with all of its regions rising or falling together with the national economic tide…

But no longer;  today it makes more sense to think of ‘common markets’ of urban area economies… These urban area regions, although strongly interdependent, compete with one another and other urban centers throughout the world. Hence the ability of nations to prosper in today’s highly competitive global economy is highly dependent upon economic performance of its urban regions, and upon the health and vitality of the cities at their core…