PwC: Cities must adapt to the increasing urbanisation

16 December 2014 3 min. read
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Mega cities must adapt to the rapid urbanisation to stay liveable, says PwC. The firm predicts that by 2050, 70% of the world’s population will live in cities, a percentage cities are not built for. As a result, the number of people living in slums will sharply increase as well. According to PwC, cities should embrace new technologies and transform into liveable places for the future by adapting to their inhabitants needs.

As part of its ‘Megatrends’, professional services firm PwC analyses global urbanisation; it highlights the consequences of this rapid process and gives insights in possible responses to this phenomena. According to the firm, currently 51% of the global population is living in cities, a number that was as low as 2% in 1800, and will be as high as 70% by 2050 if the world carries on its current pathway.

Rapid urbanisation
Every day, 200,000 people migrate from the countryside to the city, which are 1.5 million people a week. PwC predicts that as a result of this, by 2025, the number of cities with a population of more than 10 million could be as high as 40. With the number of people moving to cities increasing, the number of people living in slums is also growing rapidly, as cities are not built for the excess of inhabitants. Leo Johnson, Partner PwC, explains: “By 2030 there are going to be 4.9 billion people living in African and Asian slums alone. So, you’ve got one of the defining challenges of the 21st century, which is what are we going to do with these people? Where are the jobs going to be? How is it going to work? How are we going to avoid the outcome of these crime-ridden slums and the megacities getting swamped?”

PwC urbanisation

As the percentage of slum inhabitants, which grew with 33% since 1900, is expected to grow even more, cities will have to face several challenges in the future, as strong population growth will put big pressures on infrastructure, the environment and the social fabric of the city. The firm predicts that metropolis cities New York, Beijing, Shanghai and London will need $8 trillion in infrastructure investments in the coming 10 years to combat the pressure put on infrastructure by urbanisation.*

Cities of the future       
The consulting firm states that cities will have to change to remain sustainable and liveable, and provides two possible scenarios:

  • Develop a new city built around the latest technologies: the “Smart City”. This city uses digital technologies to improve performance and wellbeing, and to reduce costs and resource consumption.
  • Deploy technology horizontally to smart citizens and cities: the “Bottom-up” city.

In both scenarios, PwC emphasises the importance of new technology as it is used to transform mega cities into liveable cities and is “changing the reason that cities exist in the first place.” Where cities used to attract people because of employment opportunities, more and more people move are attracted to the city by the quality of life this city has to offer. According to the firm, the way a city will evolve, will be determined by the collective preferences of city governments, people and businesses.

Leo Johnson, PwC

“I believe we’re going to see a shift in what a city looks like and it’s not going to be a place that’s built for cars and built for machines. Cities must be adaptive to the needs of people. They must be local things where people have got the power to make that accumulation of small changes that keep the city alive and resilient and vibrant,” concludes Johnson.

* Consulting firm Arthur D. Little recently released a research focussed on Chinese urbanisation, and predicted big mobility challenges for the country’s cities.