Urbanization – Mega trend for the future?

Every day about 180,000 people move into cities. Add to that that half the world’s population already live in cities and it’s obvious that urbanization is one of the mega trend for the decade.

How is urbanization affecting the kind of products and services you develop for the future? Are you adapting what your have to cater to the very specific, often more refined needs of urbanites world- wide?

Needless to say this has an enormous impact on what we consume because urban consumers are more daring, liberal, tolerant, experienced and prone to trying out new products and services.

From one century to another

In emerging markets the difference between the country side and the cities can be tremendous. Like moving from the way we lived in the West in the 1800s into a modern 21st century life style. A move away from traditional social and family structures to being exposed to a wide range of alternatives.

Hundred cities – a third of the world economy

Just one hundred urban islands account for about a third of the world economy and almost all innovation. New York’s economy is for instance larger than that of 46 Sub Saharan African countries put together and, according to Foreign Policy, Hong Kong receives more tourists annually than all of India. Obviously other metropolises are keen to join. Not least Shanghai, Sao Paulo and Istanbul.

Will we all become city dwellers?

Considering that quite a few poor people from rural areas end up going from the ashes into the fire in cities, will this trend continue? Or will less people decide to seek their fortune in urban areas because of the problems associated with it? Will we consequently see the trend gradually slowing down? Or will it continue and even accelerate? Are more and more of us becoming city dwellers, for better of for worse? If so, world-wide consumption will change drastically on a continuous basis.

Catering to city-citizens

To appeal to the population of these vast urban areas you need an urban dedicated approach to products, services and campaigns that not only mirror but slightly alter the usual country specific approach.

Considering that 3 billion people already live in cities and 60 million are, according to Intuit, being added on a yearly basis, what are you doing to cater to their needs and requirements? Urban pride is something that shouldn’t be forgotten. Look at BMW’s Megacity Vehicle and Smirnoff’s Absolut Cities. And it’s not only luxury goods that is affected by urbanization. Even consumption patterns for things like shampoo and detergents are changing. How is urbanization affecting the kind of products and services you develop for the future? Are you adapting what you have to offer to the very specific, often more refined needs of urbanites world wide? Or maybe combining the country specifics with the urban approach to develop slightly different products tailor made for different cities?

(Photo: hamron – Flickr)

58 thoughts on “Urbanization – Mega trend for the future?

  1. Thought-provoking, Catarina!

    There's little doubt that the world's population will become increasingly urbanised for the foreseeable future. Of course, there will need to be a rural core to produce the food and other raw materials needed by the city-dwellers, but this will be a decreasing percentage of the global total.

    The biggest challenge is going to be effective design of the urban centres to ensure an agreeable quality of life, even as they continue to grow. Of course, products and services play a key role in this, too and will simply add a further dimension to the era of "mass customisation" we are entering.

  2. Very interesting, Catarina. I live in a suburb right outside Los Angeles and I can tell you that more and more I see people from out of state moving to the Los Angeles area, but Angelinos are moving out of the city and going Oregon or as far away as North Carolina (mostly families). Those that stay behind are single, liberal and live an urban lifestyle, so I see what you're talking about. When I go to mixers in the city, I rub elbows with people who are looking for different ways to do business. The old ways work, but is there a better (often more cool) way?, they ask. it'll be interesting to see how things change, because more and more people are noticing that business is a symbiotic relationship between many countries and cultures.

  3. Intuit? Seriously? We should take what an accounting software manufacturer predicts about population growth???

    I don’t think urbanization will be quite the world-changer you think. The 60 million people *Intuit*–for some reason–is claiming will move to urban areas are more than offset by the global death rate:

    “According to Jean Ziegler (the United Nations Special Rapporteur on the Right to Food for 2000 to March 2008)…”In the world, approximately 62 millions people, all causes of death combined, die each year.” [Wikipedia: Death Rates]

    The UN estimates that the global population growth rate has been declining since its 1963 peak, and will continue to decline (despite increases in total population). Many countries, especially in Central and Eastern Europe, actually are experiencing negative population growth due to low fertility rates. Birth rates in many developed countries, such as Germany and Italy, are often at or below replacement levels. “Within the next decade, Japan and some countries in Western Europe are also expected to encounter negative population growth due to sub-replacement fertility rates.” [Wikipedia: World Population]

    The UN World Population Prospects Report projects that, “Almost all growth will take place in the less developed regions, where today’s 5.3 billion population of underdeveloped countries is expected to increase to 7.8 billion in 2050. By contrast, the population of the more developed regions [excepting the USA] will remain mostly unchanged, at 1.2 billion.” [Wikipedia: Overpopulation]

    This means that if we assume most of the world’s urban areas are in the developed nations, then any increased urbanization would happen primarily in the areas where the UN predicts the least population growth.

    A global mortality study published in the April 30, 2010 issue of Lancet found that “Increased incomes in some countries appear to be increasing the prevalence of risk factors for disease, such as high blood pressure and obesity.” If we link increased incomes to urbanization, then the global gene pool is going to benefit by the loss of people too stupid to stop overeating.

    1. Steven, with respect, already about 2,000 years Cicero stated that "when a civilization cease to have enough children to replace themselves people from less civilized places fill the gap". He said this during the Roman Republic, i.e. before it became the Roman Empire. The less civilized places he was referring to were what is today Germany, France, Spain, Switzerland, Britain and so forth.

      Migration has been going on since the beginning of time and it is and always will continue. Today people from rural areas in the developing world migrate to mainly cities in the developed world. Both legally and illegally.

      The trend of migration to cities have already started. Have observed this phenonmena first hand in cities in the Gulf. Most of them carry out low paid jobs and send part of their salary home to support their extended family. But to my amazement they spend a lot of money mainly on flashy gadgets such as digital cameras and computers. One day for instance I was sitting in my office in Riyadh and an Asian assistant knocked on the door. He had seen that I had a digital camera and wanted to know how much it cost. So I told him and he said he was going to buy one. Considering how little he earned I thought it was madness. So I asked if that really was a priority for him. Turns out that when they go home and visit their village having flashy gadgets is a status symbol for them that shows how "successful" they are. Talked to many of my friends about this phenomena and they all confirmed that they frequently basically live on air in order to be able to buy flashy gadgets.

      In Western Europe immigrants come from all over the world, but mainly Asia, the Middle East, former Eastern Europe and the Balkans. And, again, you notice that despite not even speaking the language they somehow manage to have an I-phone and other such gadgets.

      So this trend is not new, just continuing, and the people that have moved to the cities, contrary to what you would believe, are big spenders. Their consuming pattern of flashy electronic gadgets contibute a lot to sales of such products which signify that consumption patterns are changing as a result of their movement to cities. The same happens to the consumption patterns of people moving from rural areas in say, China, to Chinese cities. In other words this has an impact on how and to whom you promote products in order to be successful since they represent a big group of consumers globally

  4. Urbanization will continue to increase for another important reason: infrastructure. The denser the population, the less infrastructure is need to support it. Australia a good example of this: about 80% of the entire continent's population live in seven cities… In most 1st world countries, megalopolises are becoming the norm. This is true in lesser developed countries, where infrastructure issues are even more accute. Moreover, the number of agricultural workers continues to shrink vs. factory workers in just about every nation. The diet issue is interesting: Obesity has been linked to many things — poverty, a sedentary lifestyle, a lack of dietary education. This the first time I've heard it being linked to urbanization? Any New Yawker knows it'sa walking city. No matter where you live, you still have to walk to the subway, the bus, your office, the local store. In many urban environments congestion makes even mass transit cumbersome. Whether we are growing as a global population or not, living more in urban areas or not, we are still depleting natural resources faster than we can replenish them – a greater problem for future urban masses.

    1. Interesting point about Australia, Josh. Didn't know that. Also don't understand why obesity was drawn into this discussion. People in rural areas in Africa and China i.e. the ones that really need to move to the city to get a decent life, don't have to worry about obesity. Death on the other hand they get more than their fair share of.

  5. Catarina. Interesting debate you have here.

    I find the topic of migration as influenced by globalization or vice versa very facinating.

    My sense is that Rural-urban migration especially in developing countries is more pronounced than in Western countries. One area that I think is not being addressed enough is the demand for energy. What do you all think about how inadequate energy supply in the future is likely to influence patterns of migration?

    For example, there's a very big deal being made in various regions in Africa about the emergence of high speed broadband using under-sea fibre optics; but the truth is that without adequate energy supply to support growth in industry, the benefits of high speed internet won't be realised to its full potential. People will still migrate in search of new pastures and hope that the internet will bear gifts.

  6. I'll throw in my simple two sence.

    People have always lived in large groups or cities. It's about jobs, trade and social interaction. Then there are the hardy souls that live in the rural areas and make a living. In my mind it is all about survival and the location where that can be accomplished. Combine that with the desire (or lack of it) to associate with like minded people and communities grow.

  7. Cities formed naturally at a time when there was no electricity, no public transportation and even no sanitary facilities. People clustered together for their mutual benefit. The move to suburbia, in the U.S. at least, began after World War II with the growth of the middle class and the urgent need for housing for returning veterans. What has kept New York City strong is the constant influx of new immigrants who are willing to start on the lowest rungs of the economic ladder and move upward as have millions of immigrants before them. They are vital to our economy and the economy of many developed countries. The negative sentiment around illegal immigrants diminishes the economic and social value of immigration into cities. In addition, retirees are finding cities an exciting place to be with all kinds of activities — cultural, educational and social. Also, as retirees age they no longer can drive so having easy access to stores and hospitals is essential.

  8. Where I live, not metropolitan, we have people arriving FROM the cities. They want to get away from the traffic, the speed, and high taxes. So my area is not a microcosm of what you are describing. Maybe right now, people are doing what they HAVE to do. Jobs have been lost, savings and retirements have been slashed and homes are been foreclosed. It's possible that all those things are affecting the current trends as you describe.

  9. Catarina – I wish I could find it for you – not too long ago I watched an interesting video by a famous architect who shared his urban space retrofitting design ideas which were both beautiful and practical. I was born and raised in Amish country in PA (no, I'm not Amish) and personally have been drawn to the beauty of the countryside. Every day I enjoy stone mills, streams, gatehouses, farmland, horses, green hills and forest areas. Every spring and summer relish expanding my gardens to attract wildlife and produce my favorite foods like strawberries, herbs, and raspberries. Yes, urbanization is a hot trend and who knows, maybe I'll join in someday – just not today.

    1. There is frequently no need for us in the West to move to cities. But maybe more Americans do so now due to unemployment? But if we had been born and raised in Asia or Africa it would have been different. Those areas account for 5 billion out of the world's total population of 6.8 billion, and the poverty in rural areas is terrible. They hence don't have much of a choice but to move to cities to get a job. Or, as they hope, make a fortune.

  10. Very thought provoking post. I live in a large city not so much for the business benefits, but for the arts, sports, culture, and phenomenal food choices! The personal benefit is wonderful. I'm trying to appreciate the concept of better business benefit by being in a city, but all that comes to mind is that the "world is becoming smaller" due to the internet and ability for anyone… even the most remote corners of the world to do business of any kind. In fact, I just learned about Cisco Telepresence… real time videoconferencing. I've heard it is so "real" as if you are truly in a room togehter, that men find themselves wanting to wear makeup to hide their facial blemishes. Okay.. I'm being funny but you get the idea.

    I don't think we'll all become city dwellers. As long as companies continue to utilize the internet to anyone who will pay, they'll find those people even under a rock.

    1. Agree with you Keyuri. However, we mustn't foget that North America only account for 5% of the world's population (6.8 billion). Five billion of the world's inhabitants live in Asia and Africa. And for them rural life means poverty that's almost un-imaginable. They hence move to urban areas to get a job and seek their fortune. Fifty percent of the world's poor i.e. surviving on less than a dollar a day are on the Indian subcontinent. The internet is not an option for them and they hence flock to cities like Mumbai and Delhi, for better or for worse.

      1. Your point is well taken Catarina. Regarding India, the middle class population there has grown immensely. Let's hope that they in turn provide opportunities to the more rural areas. My last visit there was nearly four years ago. I was thrilled to see… at the very least, internet cafes popping up in some small villages. It's a start and one I most certainly will continue. It takes time and of course good people with a visionary approach, not to mention padded pockets to help.

        1. Keyuri, I really hope so too. Migration patterns change on a continous basis throughout history. In the 1800s for instance Sweden was so poor a third of the population emigrated to the United States. Read yesterday that it's estimated that migration from India will slow down approximately by the year 2030 since incomes in India will then be on par with developed countries.

  11. Hi Catarina,

    I think one reason is for the basic reason of employment. In Australia, our rural communities have been hard hit over the years by drought and now some are currently being affected by droughts. If their farms cannot survive then the only opportunity is to move closer to cities.

    I am not sure all want to move to the cities, however the lack of infrastructure makes it very difficult to live in outer areas and be able to commute easily to the cities where the work is.

    1. Susan, you are absolutely right. It's all about employment, and for the people in the developing world, the hope of striking it rich. They have no other choice. However, it has a big impact on consumption patterns world-wide since the market for "sophisticated" products that appeal to people in cities is growing rapidly.

    2. I believ we can do a lot and most important is to combine a modern life with an environmental friendly living. I am currently discussing with youth in the suburbs in Sweden who are burning cars and throwing stones. They want to live in the nature and are tired of the beton ghettos so my plan is to start up with youth exchange. I want them to come out and get the initiation rites and spend a couple of months to become men and women who takes responsibility for their lives. My daughter left Sweden a year ago and travelled alone to Australia and have grown a lot since she had to manage everything on her own. I am sure the youth need to go through some struggles in life to really grow. The work can be done on farms and going back to the natural way of farming ecological vegetables and create handicrafts. We don't need so much of the plastic scrap and so on…

      1. That's a good example for what can be done in the West, Christer. Bit more complicated to do it in the developing world. It can be done but will only have an impact on a small percentage of the poor. Imagine, in India alone you have half a billion poor people.

  12. People tend to migrate in cities or highly urbanized places to seek job for their survival it has a big impact on consumption patterns because of rapid population growth.But some prefer to stay in an urban area because of the environment and simple way of living.

    1. The majority of people moving to urban areas are in the developing world and they have no choice. It's live or die. And James, the way their consumption pattern changes is mind boggling. I don't understand how they can give priority to flashy things, but they do. So companies should take the growing urban poplulation and their needs and likes into account. There's a lot of money to be made there.

  13. It seems that people are always moving from town to town where they can find work. It has to do with being able to provide for their families. I feel that more urban homes are being bought and rented with cities near by. Great article.

    1. Thank you Robert. At least that's the way it will be in the future. In your country it's from what I understannd not yet the case since many unemployed are stuck with an over mortgaged house that is all they own. If they sell it for what they can get now they still owe the bank and have no prospect of making a profit on it in the future. At least they now have a nice house to live in.

  14. This is a good post keeping in view of the latest happenings around. Urbanization is not a new term and has been going on from centuries. People leave their towns and rural areas and reach the nearest city for a proper education, job or for other amenities. This has become a big task for the government to cater to the needs of the rising population and the rate at which urbanization is going on is alarming.

    Thanks!
    Manny

  15. Urbanization will always be an issue as the end of traditional rural industries coincidews with the creation of new urban work opportunities. This is a demographic fact of modern life.

  16. I've been piloting uses of GIS mapping for nearly 20 years, intending to show poverty concentrations in Chicago, with the goal of mobilizing public and private support for a better distribution of youth serving organizations in all of the high poverty areas. This blog shows examples of uses of maps for this purpose. http://mappingforjustice.blogspot.com and this section of links in my library points to many applications of mapping. http://tinyurl.com/TMI-mapping

    I think every big city and metropolitan area has pockets of high poverty where people are more isolated from social services and others in the area. While philanthropic and government programs may provide services in some parts of these areas without mapping of indicators and service providers it's likely that most areas will have too few services. Since these needs are common to all urban areas it seems that organizers from different cities might connect and share ideas and tools and resources that support mapping and mobilization activities in each city. I hope that by meeting in on-line forums like this we come closer to building that type of cross city connections.
    My recent post YOU can make a difference

    1. Good comment that applies to the United States and developing countries. In Western Europe social needs of all citizens and newly arrived migrants are taken care of in all areas of cities, no matter how low the median income is in the suburb.

  17. I don't like crowds or constant noise so I could only visit not live in a compact urban environment like NYC or Tokyo. I'd never move to a completely rural area either because of the isolation. As the big cities continue to grow and absorb their suburbs there won't be much choice in the matter.
    My recent post Tai Cheng Week 11 Completed

    1. I agree and know many well educated international people who wants to move to rural areas and actually doing. So there is a movement in opposite of the urbanisation too!

      1. Yep Christer, but the worls's poor are not moving to rural areas:-) Instead they flock to cities. Or even worse, pay people smugglers to get to Europe or the United States believing the smugglers when they say they will have a life in luxury for the low cost of $10,000. Often all they get is a debt of $10,000 dollars to people you don't mess with.

  18. While there's no question that current patterns – particularly in the developing world – are towards greater urbanisation, I do think that we will also see increasing de-urbanisation in more developed markets in years ahead as technology enables true location independence and facilitates the move to less crowded, less expensive areas.

    For example, housing in London is currently 7x the national UK average, and increasingly unaffordable. As people find themselves able to work from home – a growing trend in many developed countries with good communications infrastructure – so they will move out to have more affordable living and more space.

    I blogged about this trend myself in a recent series entitled The Changing Way We Work And Live, if you'd like to see greater detail on my thoughts in this area.

    1. True, Guy. But mainly people who can work with their computer from home will move out from the cities. People with manual skills will largely remain in cities. If they move they will move to smaller towns. Remember you blogs.

    2. GuyW what you have said about location independence facilities may be reversing the future trend in advanced economies is equally applicable in developing economies (DE). By the way, pace of DEs catch up with the advance economies in future will also be phenomenal and may be two decades from now will be talking about in terms of global future trends only. In the end the quality of life will matter and all future lifestyles may be quite different then the article by Catarina Alexon is projecting.

      1. Thanks for your opinion, Azam. Interesting. It's possible that two decades from now people seeking quality of life in the developing world will be more or less on par with the West.

  19. I enjoyed the article and the subsequent responses. My question is what will global warmings impact be on urbanization rates. It is said within our decade, the ice in the poles will melt fully each year, rising sea levels and maximizing the impacts of global warming. Will cities become so crowded and resource poor that many people will relocate to the rural areas looking for a better way to support themselves?

    1. Mary, you are asking the wrong person. Am not a scientist and hence have no idea what will happen with global warming in the future. If you want an answer from someone who understands the possible impact it can have, I suggest you contact a university near you.

  20. Historically, urbanization has been closely connected with industrialization. What comes after industrialization is the surplus increase in agriculture and industry, so a larger portion of the population are able to live in cities. Because of the economic forces the cities became great places to locate factories and their workers. There are pluses and negatives of urbanization. The plus is the transport cost, the negative is that the cities are coming over populated with increase of crime in the cities.

    I am also seeing in the US that what were the suburbs are now becoming part of the cities.

    1. Exactly, Arleen. What's happening makes perfect sense. But, as you say, it's not just rosy. The worst aspect of it is, in my opinion, how people smugglers take advantage of desperate poor people. They tell them that they will live in luxury in Europe for the low price of $10,000 (that's the price paid from the Middle East to Europe). Once here, however, they quickly realize they were conned. But that doesn't change the fact that they have to pay the smugglers what they owe them. Imagine having that kind of gansters tell you if you don't pay they will "take care of your mother in Baghdad". Can't blame them for chosing crime can we.

  21. That statistic about urban islands account is pretty amazing. I had no idea. You pose very good question. What we will (or can) we do to provide for the needs of the newly urbanized peoples. I am hard pressed to consider what that might be at the moment. One thing is for sure, if we don't consider this carefully we could find ourselves in situation that could be a determent to all. Just my thoughts. 🙂
    My recent post Artichoke Bread: Recipe

    1. Agree Susan. If we don't do anything to provide for the needs of the newsly urbanized people we will find ourselves in a situation that will be detrimental to all. Crime will go sky high because desperate people do desperate things.

  22. We are definitely becoming urban dwellers, whether we want to or not. When my husband and I moved into our home 12 years ago we had several fields close by. We were close to the city core, but far enough out that we could have a big backyard and large home. Almost all the fields are gone now, replaced by new residential neighbourhoods. The local malls have been redone and expanded. The commercial zoning is starting to change. We are now watching some of the older homes being torn down to be replaced by bigger modern houses. We didn't have to move to the city, the city moved to us.
    My recent post Have We Run Out Of Stories?

    1. Good points, Debra. It's even happening in the West. Imagine what it's like in cities in the developing world. About 7,000 people move to Istanbul in Turkey every day. Catch is there isn't enough work for all of them. And, well, you know what happens then:-)

  23. You make a very point Catarina. Though I personally prefer to fight urbanization as I love the acre of land I live on, it is in too many ways unavoidable. I've seen the city start to encroach the picturesque villages in the South of France and it brakes my heart. But where else will people go? We cannot expand in width so we must expand in height and place bigger and bigger buildings on smaller and smaller plots.. and learn to accept all that goes with it.. more traffic jams, food that is no longer fresh from the producers.. Yes I'd like to embrace this new lifestyle that for many will be inevitable, but I'm not quite ready yet to choose convenience over peace of mind, knowing that my children are safe..

    1. Yes, it's unavoidable isn't it Valerie. Imagine what it's like in developing countries where the slums get bigger and bigger. But what's the alternative for people desperately wanting to make a living?

  24. I think urbanization is the megatrend of the right now, more so than the future. No telling what the future will bring, but since people that collect in cities rarely fall back out of them there is no telling. In the US there was some talk a couple of years ago of this trend reversing because cities here are much, much more expensive and dangerous than small towns, and the virtual office fad was growing making living away from cities more attractive. The virtual office movement seems stalled though, so no telling what comes next. If I had to guess I'd say corporate enclaves are the next big thing. Big companies already build megacampuses for office space, and some have added food service, day care, medical clinics, and other things you'd associate with a small shopping center to serve their employees. I have seen one development that is part mall, part office park, and part condo built by a large medical corporation that is quite successful, I can see other companies following this trend.
    My recent post The Future Is Here, Now

  25. Catarina,
    For me, I’m not motivated to develop products or services based on urbanization. Rather, what I am responding to is the need for people to become independent when it comes to employment. Not a week goes by without my hearing from someone who has lost their job. (It’s usually someone who is more experienced and can be replaced by a part-timer with no medical benefits.) The Internet has leveled the playing field somewhat in that the products that I’m working on can meet the needs of anyone with Internet access. Granted that’s not everyone but it is a large market.
    My recent post Friday Finds: LinkedIn Profiles, Google Spam Updates and Google Commenting

    1. That makes perfect sense when for the United States, Sherryl. However, the mass migration to the cities are taking place in the developing world. So companies producing consumer products should pay attention to the trend.

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