strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Spring 2006 / Issue 42(originally published by Booz & Company)


City Planet

Get ready for cosmopolitan slums with thriving markets, aging residents, and the most creative economies in history.

“In the village, all there is for a woman is to obeyher husband and family elders, pound grain, and sing. If she moves to town, she can get a job, start a business, and get education for her children.” I heard this remark, made by a global community activist, in 2000 at a Fortune magazine conference in Aspen, Colo. It was enough to explode my Gandhi-esque romantic notions about the superiority of village life.

Data courtesy Marc Imhoff of NASA GSFC and Christopher Elvidge of NOAA NGDC.
Image by Craig Mayhew and Robert Simmon, NASA GSFC.

Ever since, I’ve been asking travelers back from remote places what they noticed out in the countryside. Their universal report: The world’s villages are emptying out, everywhere. People are moving to cities far more rapidly than most of us realize.

Increasing urbanization is accelerating the economic development of the world with remarkable speed. The consequences are going to be profound, particularly for the institutions that serve people — government agencies, corporations, and the creators of infrastructure. Although a growing number of people have noticed the change, few civic and corporate leaders are prepared to deal with it.

The growth of cities has led to demographic trends exactly the opposite of what many experts have predicted. Only 15 years ago, it was widely assumed that the human population would continue to increase exponentially, as it had since the Industrial Revolution. Few experts foresaw the dominant effect that urbanization would have.

But it was obvious by the beginning of the 21st century. “Some 59 countries, comprising roughly 44 percent of the world’s total population, are currently not producing enough children to avoid population decline,” wrote journalist Phillip Longman in Foreign Affairs in 2004. “The phenomenon continues to spread. By 2045, according to the latest U.N. projections, the world’s fertility rate as a whole will have fallen below replacement levels.” In the article (titled “The Global Baby Bust”) and in his subsequent book, The Empty Cradle, Mr. Longman went on to explain the cause: “As more and more of the world’s population moves to urban areas in which children offer little or no economic reward to their parents, and as women acquire economic opportunities and reproductive control, the social and financial costs of childbearing continue to rise.” After I absorbed these ideas, my lifelong worries about population growth, instead of disappearing, reversed. Now I worry about the disruptions of depopulation.

Demographically, the next 50 years may be the most wrenching in human history. Massive numbers of people are making massive changes. Having just experienced the first doubling of world population in a single lifetime (from 3.3 billion in 1962 to 6.5 billion now), we now are discovering it is the last doubling. Birthrates worldwide are dropping not only much faster than expected, but much further. It used to be assumed that birthrates would get down to the replacement rate of 2.1 children per woman and level off, but in most places the birthrates continue to decelerate with no bottom in sight. Meanwhile the “population momentum” of the already born and their children will carry world population to a peak of 7.5 to 9 billion around 2050 and then head downward.

Even those who note the trend correctly tend to think of it as a developed-world phenomenon: “aging Japan” and “senescent Europe.” Indeed, the long-urbanized developed nations have an average birthrate of 1.56 children per woman, and in some places the rate is as low as 1.3. Those are radical depopulation numbers. It is already in the cards that Russia, Japan, Italy, Spain, and Germany will have fewer people in 2050 than they do now. And by then the majority will be old, past childbearing. Just as the population exploded upward exponentially when the birthrate was above 2.1, it accelerates downward exponentially when it’s below 2.1. Compound interest cuts both ways. Fewer children make fewer children.

Page 1 2 3 4 5 6 7 8 9  | All | Next Last>
Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store



  1. Mike Davis, Planet of Slums (forthcoming, Verso, 2006: Views massive urbanization as a crisis caused by capitalism, “rushing backwards to the age of Dickens.” Click here.
  2. Arie de Geus, The Living Company (Harvard Business School Press, 1997): Source on the oldest surviving corporations and why “economic purpose,” as Mr. de Geus puts it, makes many companies short-lived.
  3. “Green Cities” issue, Our Planet (magazine of the United Nations Environment Programme), vol. 16, no. 1, 2005: Emerging movement of ecologically conscious urbanism, highlighted with examples from Bangkok to London to Sevastopol to Bogotá. Click here.
  4. Art Kleiner, “The Philosopher of Progress and Prosperity,” s+b, Summer 2004: Hernando de Soto’s concept: fostering wealth creation by building ownership legitimacy in squatter cities everywhere. Click here.
  5. Phillip Longman, The Empty Cradle: How Falling Birthrates Threaten World Prosperity [and What to Do about It] (Basic Books, 2004): “Not since the fall of the Roman Empire has the world ever experienced anything on the scale of today’s loss of fertility.”
  6. Suketu Mehta, Maximum City: Bombay Lost and Found (Knopf, 2004): “Bombay is the future of urban civilization on the planet. God help us.” Portrait of Mumbai with the perspective of decades.
  7. Robert Neuwirth, Shadow Cities: A Billion Squatters, A New Urban World (Routledge, 2004): The thriving and vibrant dimension of the squatter neighborhoods, by a journalist who lived there and spoke the languages.
  8. C.K. Prahalad and Stuart L. Hart, “The Fortune at the Bottom of the Pyramid,” s+b, First Quarter 2002: Impoverished urbanites as an emerging global market... Click here.
  9. C.K. Prahalad, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing, 2005): …plus cases and practices for companies seeking to reach them.
  10. Robert Skeldon, Migration and Development: A Global Perspective (Addison-Wesley Longman Higher Education, 1997): How rural-to-urban migration can unexpectedly lead to economic growth.
  11. United Nations Human Settlements Programme, The Challenge of Slums: Global Report on Human Settlements (Earthscan Publications, 2003): Statistics and figures to make visible the trends. As Mike Davis says, it’s “the first truly global audit of urban poverty.” Click here.
Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.