The century of cities

1980 may seem an odd year to describe the beginning of a century, but it is just about the year when two things happened simultaneously.

First, decades-long processes of de-industrialisation, urban decline and population losses in cities in wealthy countries started to reverse as service industries grew, ushering in a long cycle of urban revival, repopulation, and regeneration. Second, inspired by the experience of the ‘Asian Tiger’ economies, many more developing nations actively pursued the twin paths of industrialisation and urbanisation, rapidly shifting towards manufacturing and connecting to globalising value chains. Thus, in 1980, much of the world joined a pro-urbanisation cycle for the first time in history. We are now in the 5th decade of this century, and each decade has its own story.

In principle, urbanisation is good for us. The USA, Latin America, Europe, and Oceania are already 80%+ urbanised. These mature settlement patterns can use current trends in digitisation and decarbonisation to improve choice and quality of life for millions of people. The Middle East and China are now already 65% urbanised, in Africa and Southeast Asia (ASEAN) 47%, and in India 37%. These are the countries with the fastest growing populations which will see rapid rises in urbanisation. We will need to build many more cities and urban quarters, the infrastructures that connect them, and the amenities that support them.

Rapid urbanisation should be not feared, rather it should be embraced, shaped, and managed. Successful urbanisation is the key ingredient in building modern societies that can serve people’s needs and inspire human endeavour. It creates opportunities for people and families to improve their quality of life through employment, education, and healthcare. Cities make our workers more productive, our companies more innovative, and our capital more efficient. They can increase our connections, accelerate our inventiveness, and raise our ambitions.

The core systems of cities such as energy, utilities, transport, land use and property, logistics, and a wide range of citizen services make our daily lives work. We also know that cities that are open to trade and cross-border investment also become open to people, ideas, and difference. These are huge advantages
when it comes to productivity, creativity, and quality of life.

Good urbanisation vs. bad urbanisation

But we shouldn’t think of 80% urbanisation as a kind of natural peak. Many countries have much higher rates: Singapore and Hong Kong, as well as Japan, Korea, Israel, and the Netherlands are all successful nations with more than 85% of their population in cities. Most of these ‘high-urbanisation’ countries have learned that success requires investment in high-capacity transport to support medium-to-high density living and working, fostering the critical mass to underpin cherished amenities.

So, the choice we face is not whether to have urbanisation, but how to ensure we get good urbanisation, not bad. This means investing effectively in the carrying capacity of cities and accelerating urban innovation. This good urbanisation requires that infrastructure, utilities and amenities are expanded and enhanced as populations grow. We must avoid bad urbanisation where population growth exceeds that capacity. That’s when we experience congestion, pollution, high carbon emissions, poor air quality, extreme heat, loss of biodiversity, and systemic inequality.

A planet of cities

Our planet is finite whilst our cities are elastic.

Cities are dynamic concentrations of people, jobs, infrastructures and consumption, all of which emit carbon. At the same time, cities are the most obvious victims of rising temperatures and sea levels. Five hundred of the world’s major cities are at risk of a half-metre rise in sea level that would occur if we exceeded the 1.5°C maximum target of global warming originally agreed at COP21 in Paris. Cities are prone to flooding, extreme heat, freak weather events and natural disasters that threaten their fixed assets, as well as the ecosystems of air, food, water, land, and biodiversity that sustain them. But crucially, it’s at the city level where we can innovate and experiment with policies that shape choices, nudge behaviour changes, and foster new models of investment and consumption. It’s also in cities where we can experiment with our natural infrastructure to create nature-based solutions in which trees for example, can become an ‘adaptive technology’ to reduce flooding, create shade, improve air quality and absorb CO₂.

On the road to net zero, cities can be the pioneers not only of climate reform but also of new decarbonisation pathways which have resilience and nature at their heart.

So, cities need to embrace good urbanisation while also providing all of the benefits of urban life without existential cost to the planet. The prize here is great. Not only is it possible for us to reduce carbon emissions but, in doing so, we can also improve health, create new jobs, make savings by reducing waste, and spawn new discoveries.

Net-Zero Path = Energy Switch + Urban Transition

The good news is that reversing bad urbanisation can also be a major stimulus for innovation and investment, because we also know that cities are the places where such innovations, driven by network effects, really count. The Coalition for Urban Transitions observed that net-zero cities can combine clean systems, with low carbon and digital connectivity and compact and mixed land uses development that are underpinned by electrification, land use reforms, and materials efficiency with citizen choices.

In our cities, there is a parallel shift happening to complement the energy switch that is now in train with renewables, electrification, and hydrogen. This urban transition involves the rapid emergence of electric and fuel cell powered vehicles for passenger transport and logistics/distribution, the creation and retrofitting of green buildings and homes, building circularity into food, waste, consumption, and utilities, and encouraging new sustainable materials and much more frugal, and better mixed, land uses. Much of this urban transition is supported by new digital technologies that accelerate systems efficiency, and also integrate different platforms so that they work together intelligently.

One key benefit of these urban shifts is to improve the quality of air in our cities, making them more breathable for the increasing number of people who live in them, and in the longer term reducing the risks of respiratory diseases, and associated health and human development problems. We are now more aware of the link between healthy cities and healthy people since the pandemic, and it is abundantly clear that a healthy planet requires us to prioritise the urban transition alongside the energy switch.

Cities post-pandemic

In our current decade (the 2020s) the COVID-19 pandemic is a major shock. It shut down normal urban life to avoid excess contagion, resulting in dramatic population shifts, economic stress, and a rapid uptick in digital platforms to replace many activities that were previously done face to face, or face to place. This led some to question whether we were now already beyond ‘peak city’ and whether our cities would ever revive.

For many cities, the recovery path is very tough. Some of our cities will never return to the level of activities previously known. But the pandemic will prove to have been a great driver of urban and place innovation. For example:

Reinventing City Centres:

New demand patterns in retail and work mean that city centres are starting to be reinvented to focus less on consumers, corporates, and commuters and more on playing to their strengths as magnets of unique experience, drivers of innovation, and rich habitats.

Agile space:

We now think of space in our cities (roads, squares, buildings, amenities and facilities) as things can be used in multiple and different ways.

Sequencing and stretching the city:

We can use the time and space in our cities differently to avoid ‘crowding’ and optimise utilisation over the course of a day, week,
month or season.

New Urban Logistics:

The massive growth of urban logistics in delivery of goods, food, and services is emerging that will be managed to contain the carbon and congestions effects.

New Urban Geographies:

The acceleration in digitisation has given some people the opportunity to change their work and residence patterns, to work more at or near home, or to live in one place and work in another.

Localisation and proximity:

One important opportunity is to enable more activities and amenities to be located close to where people live, providing a new economy of proximity in town centres, suburbs, and districts.

Larger urban regions:

A key trend that emerges is that the next phase of global urbanisation will be more about larger urban regions of multiple cities and towns that are inter-connected and interdependent.

Healthy cities:

There is deep renewed interest in how we can make cities that are healthy, in terms of physical, mental, and emotional health.

New tools for city leadership

But the pandemic hasn’t been the only paradigm-shifting event. In our 5th decade of this extraordinary century of cities, the tool-box of city management, public governance, and progressive policy is now joined by three new resources in the quest for good urbanisation:

Taken together, these three new tools can augment our urban leadership, and drive connected places that increase both the investment rate and the level of trust in our cities

5 drivers for future investments

01. The urban surge in population will continue worldwide

Any talk of the death of cities is misguided, although most cities face new challenges and must adopt new shapes and refreshed mandates. Digitisation is not an alternative to urbanisation, it’s a tool that provides cities with new options.

02. Investment in new cities and fresh urban formats will be accelerated

We are already seeing the growth of whole new cities in China, India, the Middle East and ASEAN. Nations will seek to avoid the path of a single primate city or region capturing the opportunities to the perceived expense of the rest, and will pursue means to build a wider system of distributed cities.

03. Clusters of interdependent cities and vast urbanised regions are the new units of competition

In China, the super-city clusters are transforming the Greater Bay Area, The Yangtze River Delta, and the JingJinJi region into competitive super-regions underpinned by high-speed rail and complementary economic specialisms. A similar pattern is emerging in the Middle East and ASEAN. This trend is creating a compelling case for investment in the connectivity infrastructure of city networks.

04. Urban resilience will become a major driver of new investment

As our climate changes, asset and infrastructure owners will undertake major overhauls to improve adaptation. For insurers, pension funds, sovereign wealth funds, and private equity groups, this provides a new theatre for financial innovation.

05. Investment in our cities will take new forms

The scale of the resilience challenge is so great that it goes well beyond what is normally possible within the limits of public finance cycles or incremental investments. A much larger deployment of capital will be required, accompanied by new financing models that blend public and private, and debt and equity, combining diverse urban investments into portfolios of tradable assets.

The scale of the resilience challenge is so great that it goes well beyond what is normally possible within the limits of public finance cycles or incremental investments. A much larger deployment of capital will be required, accompanied by new financing models that blend public and private, debt and equity, combining diverse urban investments into portfolios of tradable assets.

The challenge that faces us now is to innovate rapidly and invest fully in good urbanisation. In doing so, we must be inventive and embrace our discovery gene. Our attention should turn to harnessing the magic of cities that make them civilising and inclusive, productive and liveable, sustainable and resilient.

That is the calling of our time.

The century of cities in 10 decades

This article features in issue two of Connected Places magazine.