CEO of Smartlink Communications. Global analyst, consultant and trainer, passionate about leadership, global communications and competition.
While only about 3% of the world’s land area is covered by urban areas, cities account for around 70% of worldwide CO2 emissions, about two-thirds of global energy demand, and about 80% of global GDP.
On top of these economic powerhouses stand a few urban agglomerations that have earned the title megacity by having over 10 million inhabitants. The economy of a large city or megacity significantly overlaps with that of the national economy: London represents almost a quarter of the United Kingdom’s GDP, while Paris represents about a third of the French GDP. Meanwhile, some urban areas produce such wealth as to compete with whole nation states: San Francisco’s GDP of $501 billion stands at least twice the size of the size of Portugal or Ukraine, while New York State’s $1.7 trillion is converging with Italy’s $2 trillion.
Moreover, these hubs of business and innovation are proliferating as, by 2050, an estimated 6.68 billion people will come to live in urban areas—and a lot of those people will come live in megacities, some existing and some emerging.
The Emerging Megacities
By 2030, the number of megacities is expected to rise to 43. While cities such as Singapore, Tokyo, Shanghai or Seoul are well known, much of the entrepreneurial energy of the world today is focused on places where the Global South will fulfill its promise or not:
• Lagos: With a population varying between 14 to 21 million, Lagos is one of Sub-Saharan Africa’s places where the future of the continent is being written. Problems abound: It can cost as much to move a container from Lagos’ port to the city as it would to transport it from China. But it is also one of Sub-Saharan Africa’s commercial capitals and the hub of where the industry, ideas and financial capital that might, one day, lift millions out of poverty meet. Furthermore, in the context of the African Continental Free Trade Area, it might become both the central hub of and the gateway to the African economy.
• Ciudad De Mexico: The place where the Mexican middle class is forming, Mexico City is a former megacity returning to some of its former status, albeit with numerous challenges to overcome. Succeeding might mean the return of one of history’s wonders on the global stage.
• Mumbai: India’s bustling economic powerhouse has over 21 million busy residents. Notably, it is a testament to the city that even if almost half live in shanty towns, such as Dharavi, one of the largest slum areas in Asia, Mumbai still has a GDP that exceeds $300 billion a year.
Cautionary Tales For Emerging Megacities
To an extent, it may be said that these are the places where the economic destiny of millions will be written. With that in mind, it might merit looking at where, in history, other successful megacities have overcome obstacles or sunk under the weight of innumerable challenges.
• Nineveh was perhaps one of the first cities to qualify as a megacity and simple environmental damage contributed to its downfall. In the context in which many of the world’s megacities are at risk of either rising sea levels, heatwaves or both, it bears remembering what led to the downfall of the first megacities.
• Venice’s descent from economic powerhouse to museum is a second cautionary tale. As trade enriched some, part of that wealth was increasingly used to gain political favor and monopoly concessions for families. Today’s emerging megacities might need to remember that capitalism and free markets are partners only in the first stages of development—and in conflict after.
• New York was once synonymous with social decay, and it took significant work for it to regain its status. The lesson megacities today may take is that a successful business city is rarely only about business.
How Business Leaders Can Find Success In Emerging Megacities
Business leaders in the emerging megacities are at the center of the fastest-growing urban economies in the world. Part of that implies simple opportunity, with fortunes built, being built and to be built. That, in turn, is an experience similar to Lagos to Mumbai, requiring agility, fluid intelligence and flexibility. Some businesses, at least, will almost certainly achieve a tremendous amount of success.
Whether the megacity’s growth will translate into the country’s growth will partially depend on whether those who do succeed accept the responsibility to build the basis of a market economy where luck and speed money play a lesser role.
In my experience, it is not necessarily the hungriest entrepreneurs who actually succeed in such complex market environments but those who can put forward a cohesive vision and communicate effectively with counterparties, from government officials to informal workers. Sometimes that might require requesting a state employee push things forward; sometimes, it might mean inspiring a team of highly skilled employees, but in either case, the successful is the one who can advance a vision of a better future coming into being.
The future of millions, if not billions, is being decided in the boardrooms, streets and innovation hubs of a few emerging megacities such as Lagos, Mumbai and Mexico City. They may one day play the same role on the global stage as London or Tokyo today, if not greater. The manner in which the story of these megacities is being written is, in no small part writing the economic story of their respective countries and the destiny of millions of people.
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