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Emerging Cities of the Global South

By Jonathan Denis-Jacob
June 6, 2013

Over the past decades, emerging nations have experienced astonishing economic growth and social progress. Not only did they outpace growth of developed nations, they have now become an essential pillar of the world economy. China and India combined now account for 20% of the global economy, while they were responsible for only 5% in 1980.

Investors and corporations are eyeing emerging countries for potential growth opportunities, including the BRICS countries (Brazil, Russia, India, China and South Africa) and many newcomers (Mexico, Colombia, Vietnam, Indonesia, and more) as Europe and North America are still living the aftermath of the financial downtown. By 2020, the BRICS and other key emerging countries are expected to generate over 50% of the global economic growth, while the G7 (the US, UK, Germany, France, Italy, Japan and Canada) is expected to account for less than 15% of it. Emerging countries will become more than ever the backbone of the world`s economy.

Behind the significance of the economic role of emerging nations lies yet another striking phenomenon: the rapid rise of new world cities. If current trends remain constant, cities such as Shanghai, Beijing, Mexico City, Mumbai and Sao Paulo will rival London, New York, Tokyo and Hong Kong as the world`s leading financial centres and business hubs as early as 2025. The economy of major cities in the emerging world are growing at a pace of 6% to 7% annually, compared to less than 1% to 2% in London, New York and Tokyo.

But other signs other than growth indicate a shift in the global urban economic hierarchy, including:

1.    The growing number of international corporations, including many from emerging markets, with a significant share of their international high-order decision-making operations based in cities such as Shanghai or Sao Paulo. Two decades ago, such activities would have been almost entirely found in places like London, New York or Hong Kong, and emerging cities would at best been the location of a satellite or regional office.

2.    The demand for commercial floorspace in Shanghai, Beijing and Sao Paulo is now similar to the one found in New York, Chicago and London. What`s more, the prime office and retail locations in these cities are now almost as expensive as those in developed nations, which is a reflection of a similar productivity level per square foot.

3.    Many world cities are becoming major academic hubs. Places like Shanghai, Sao Paulo, Beijing and New Delhi have become attractive locations for world-class universities, particularly for business schools, but also for international and exchange students which not that long ago would have had a greater inclination towards London or Paris.  

4.    The same places also host major international cultural events and sustain some of the fastest growing cultural sectors in the world. Some emerging cities are also at the forefront of the global media landscape. Doha, Mexico City and Singapore are becoming major production centres and hubs for the world`s biggest news network.

5.    The emergence of new global air transportation hubs is occurring mainly in emerging nations. Sao Paulo, Mexico City and Shanghai now have some of the busiest airports in the world and are connected with non-stop flights to all five continents. Smaller places like Doha, Dubai and Panama City have become major (and unavoidable) air transportation hubs in less than ten years.

The rise of the cities of the global south points to the fact that the world is now more about cities than nations. With the transition of emerging nations from low-productivity to knowledge-based economies, cities may matter more than nations. It is already the case for some places: Mexico City and Sao Paulo`s GDP is almost the size Austria`s.
Looking ahead, the challenge for emerging cities of the global south is to balance future economic growth with social development, including the reduction of inequalities and marginalization. The way they decide to address these issues will not only transform their economic and social fabric, but also how the world will look like in the decades to come.


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