In the third installment of the long-term mega trends blog series from globalEDGE we will examine urbanization and its implications for economic growth. Urbanization is taking place across the globe from the developed nations of North America & Western Europe, to some of the poorest places on Earth, including Sub-Saharan Africa and Southern Asia. Each region of the world is urbanizing at different paces and are creating different degrees of economic growth as a result of urbanization. In this blog we will examine how the world is urbanizing and the differences in urban population growth rate/population percentage throughout the world.
It is not secret that life in countries like the USA, Japan, and Germany is quite different from life in Bangladesh, South Sudan, and Guatemala. How this translates to the topic of urban population growth and the percentage of people living in urban areas also displays stark contrasts across the developed and developing worlds. In terms of the actual percentage of a country's population, it becomes clear that countries with greater degrees of development correlate to countries with higher urban populations as a percentage of the overall population of the country. The one thing that does hold true across the world, however, is almost every country on Earth is more urbanized than it was in 1960. In fact, the percentage of people living in urban areas in 2015 was 54%, as opposed to 34% back in 1960. However, if we look at clusters of wealthy countries, such as OECD members (80% urbanized) or overall high income (81%), we see that more developed countries typically are urbanized to a higher degree. If we look at measures of the least wealthy nations, such as Low Income (31% urbanized) or Heavily Indebted Poor Countries (35% urbanized), we see that the opposite holds true for poorer countries. As a whole, the less wealthy the country is, the less urbanized the country is likely to be. If we look particularly at two countries, say Canada (82% urbanized) and Uganda (16% urbanized), we see that the same logic holds true. Although overall the world is becoming increasingly urbanized, rich countries are still more urbanized than developing countries.
Another intriguing contrast between developed and developing nations in terms of urbanization is to look at the urban population growth. Here we see that although overall, the developed world is currently more urbanized, the developing world is seeing higher population growth within urban areas compared to developed countries. If we compare Low Income countries (4.2% urban population growth) to High Income (0.8% urban population growth), we see that poorer countries tend to have faster urban population growth. Middle Income nations (2.3% growth) fall in between and show that at a high level, as a countries development level decreases it has a higher urban population growth.
Overall these trends are simple correlation and it would take a much longer article to explain the causation between the urbanization variables and a countries level of development. However, it is important and interesting to note the current urbanization trends in the world, and particularly to compare across economic development levels.