Some of the world's fastest-growing cities are places you've probably never heard of – but if you're looking at the world's economic and business expansion over the next decade or so, you will.
McKinsey Quarterly, a publication of global research and consulting firm McKinsey & Co., recently produced an interactive map on its website showing where the biggest cities of the world are – and which will have the fastest growth, both in population and gross domestic product, between now and 2025. The map illustrates the GDP boom set to happen in fast-growing emerging-market cities – many of the names of which are unfamiliar to even well-travelled Westerners. (Chengdu, anyone? The Chinese city will generate more GDP than each of Montreal, Munich and Madrid by 2025.)
(There is also an app of the interactive map that you can download here.)
"A massive wave of urbanization … is shifting the world's economic balance toward the east and south at unprecedented speed and scale," wrote Richard Dobbs, Jaana Remes and Fabian Schaer in a related report published by McKinsey last fall. "It will create an over-four-billion-strong global 'consumer class' by 2025, up from around one billion in 1990. And nearly two billion will be in emerging-market cities.
"These cities will inject nearly $25-trillion [U.S.] into the global economy through a combination of consumption and investment in physical capital," they forecast.
Emerging markets account for nearly three-quarters of the world's 600 biggest cities by population; in 2010, those emerging-market centres accounted for just 18 per cent of global GDP. But from 2010 to 2025, those cities are expected to account for nearly half of the world's GDP growth, the researchers said – while other large emerging-market urban centres outside the 600 will account for another one-quarter of global growth.
Yet, they said, few business leaders are focusing their attention on these growth hot spots.
"In a recent survey, we found that fewer than one in five executives makes location decisions at the city (rather than country) level. Few executives expected this approach to change over the next five years, and more than 60 per cent regarded cities as 'an irrelevant unit of strategic planning'," they wrote.
"Crafting and implementing strategies that emphasize such [high-growth emerging-market] cities will require new attention from senior leaders, new organizational structures that take account of urban rather than just regional or national markets, and potentially difficult choices about which activities to scale back elsewhere to free up resources for new thrusts," they concluded.