Urbanisation: The city of dreams or an urban nightmare?

14 April 2014

Over the last few months, PwC have been working with clients to understand the big changes that are disrupting their organisations - and the economy as a whole. We've distilled what we've learned down into five global shifts - the megatrends which are already driving change, and will continue to do so over the coming decades. Leo Johnson, partner, PwC sustainability and climate change, and co-author of Turnaround Challenge discusses the megatrends in Urbanisation.

What is a city? A city is a collection of preferences. It’s the place where people have voted with their feet and the places that thrive, the places that people want to live in, want to work in will be the places that satisfy those two primordial human instincts to make stuff and to be with each other.

I believe we’re at a turning point when it comes to urbanisation.

Globally, we've got 200,000 people per day, that’s 1.5 million a week, coming from the countryside to the city in a pattern of distressed migration that is swamping the megacity. That's the equivalent of three cities the size of the UK's third largest city Manchester, packing up and moving every week. What are we going to do with that?

By 2030 there is going to be 4.9 billion people living in African and Asian slums alone. Less than three decades ago, 4.9 billion was the population of the whole world. If we carry on our current pathway from people that were 2% urban in 1800 to a group that is already 51%, but is going to be 70% by 2050, it’s like we as a species collectively woke up one morning and said, “Wow, let’s change habitat. Let’s try something different” and we haven’t got a clue how to make that habitat work for ourselves.

So, one of the defining challenges of the 21st century which is what are we going to do with these people? Where are the jobs going to be? How is it going to work? How are we going to avoid the megacities getting swamped?

People want place. They want a place that they’re emotionally attached to, a place that they live in and, at the same time they want the job opportunities.

I believe we’re going to see a shift in what a city looks like and it’s not going to be a place that’s built for cars and built for machines. It’s going to be a place that’s built for people and in that place we’re going to be doing what we as human beings know that we love to do which is we love to make things.

We are about to move from the model that competitive advantage is secured by having really good, really expensive machines and really cheap people pushing the buttons on them to a model where it’s really valuable, really creative people, and ubiquitously cheap machines that are capturing and harnessing the potential of those people. The companies that do that will thrive. The cities that do that will thrive.

For me urbanisation is the outcome. It’s the outcome of a whole set of megatrends interacting and it’s the dominant challenge of the 21st century.

View Leo's interview on urbanisation and megacities
Find out more about PwC's megatrend analysis here