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 / Spring 2006 / Issue 42(originally published by Booz & Company)


City Planet

But the main event of the demographic circus is in the cities of the developing world — and most of it in squatter cities, the teeming slums of the uninvited. A billion people live in squatter cities now. Two billion more are expected by 2050. Squatters are nearly one-sixth of all humans now, one-fourth to one-third pretty soon.

Already, as a result of the headlong urbanization, birthrates have plummeted in the developing world from 6 children per woman in the 1970s to 2.9 now. Twenty “less developed” countries, including China, Chile, Thailand, and Iran, have already dropped below the replacement rate of 2.1 children per woman.

And what about the young and fertile couples in developing countries? If current demographic trends continue, 2 billion of them will live in the cities, choosing to have fewer children. It’s not because they’re poor. They were poor in the countryside. In town they see opportunity to come up in the world. Having fewer children, who are better educated, is part of that equation.

The long-anticipated “demographic transition” is happening now, sooner and more rapidly than expected, and it’s a world-changer. First, the cities of the developing world will see dramatic population increases over the next 30 years. An equally dramatic maturing of their population will quickly follow as migration levels off and the urban birthrate drops. No one knows what, if anything, will forestall the depopulation trend in this century, but then no one predicted that the population explosion would be leveled off mainly by people moving to cities.

Meanwhile, this overwhelming demographic shift is only one of the changes in store from the new cities of this century. As cities always do, they will foster new forms of culture and technology, and they will lead to often surprising shifts in business and trade patterns. The proposed solutions to most of the problems of the world — and the problems of individual enterprises — will either take hold or wither depending on their success or failure in cities.

View from a balcony in Rocinha, Brazil, a dense and relatively prosperous squatter community of 150,000 people, built on steep hills above Rio de Janeiro

Urban Legions
Every week 1.3 million new people arrive in the world’s cities (about 70 million a year). It is the largest movement of humanity in history, one that started at least 100 years ago and is still accelerating. Signs are that the flood will continue for decades.

Three percent of humanity was urban in 1800, 14 percent in 1900. Sometime in 2006 or 2007 the proportion of urban dwellers will pass 50 percent worldwide, which may represent an economic tipping point. United Nations projections put the world’s city dwellers at 61 percent in 2030, continuing upward to an expected equilibrium in which, at any given moment, only about 20 percent of the population will live in rural areas, balanced against an 80 percent urban majority. The transition point from a “developing” to a “developed” country seems to occur when the country becomes 50 percent urban. (Most developed nations arrived at that point and their present state of about 75 percent urbanization much more gradually than the developing nations currently undergoing breakneck growth in cities.) In that light, Earth as a whole is just now becoming a developed world — a city planet.

Cities are remarkable organisms. They are the most long-lived of all human organizations. The oldest surviving corporations (Stora Enso in Sweden and the Sumitomo Group in Japan) are about 700 and 400 years old, respectively. The oldest universities (in Bologna and Paris) have lasted a thousand years. The oldest living religions (Hinduism and Judaism) date back about 3,500 years. But the town of Jericho has been continuously occupied for 10,500 years. Its neighbor Jerusalem has been an important city for 5,000 years, though it was conquered or destroyed 36 times and it suffered 11 conversions from one religion to another. Many cities die or decline to irrelevance, but some thrive for millennia.

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  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.
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