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The Megacity Economy: How Seven Types of Global Cities Stack Up

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The Megacity Economy: How Seven Types of Global Cities Stack Up

Megacity Economy: How Seven Types of Global Cities Stack Up

Back in 1950, close to 30% of the global population lived in cities.

That since has shifted dramatically. By 2050, a whopping 70% of people will live in urban areas – some of which will be megacities housing tens of millions of people.

This trend of urbanization has been a boon to global growth and the economy. In fact, it is estimated today by McKinsey that the 600 top urban centers contribute a whopping 60% to the world’s total GDP.

Seven Types of Global Cities

With so many people moving to urban metropolitan areas, the complexion of cities and their economies change each day.

The Brookings Institute has a new way of classifying these megacities, using various economic indicators.

According to their analysis, here’s what differentiates the seven types of global cities:

Important note: This isn’t intended to be a “ranking” of cities. However, on the infographic, cities are sorted by GDP per capita within each typology, and given a number based on where they stand in terms of this metric. This is just intended to show how wealthy the average citizen is per city, and is not a broader indicator relating to the success or overall ranking of a city.

1. Global Giants
These six cities are the world’s leading economic and financial centers. They are hubs for financial markets and are characterized by large populations and a high concentration of wealth and talent.

Examples: New York City, Tokyo, London

2. Asian Anchors
The six Asian Anchor cities are not as wealthy as the Global Giants, however they leverage attributes such as infrastructure connectivity and talented workforces to attract the most Foreign Direct Investment (FDI) out of any other metro grouping.

Examples: Hong Kong, Seoul, Singapore

3. Emerging Gateways
These 28 cities are large business and transportation hubs for major national and regional markets in Africa, Asia, Latin America, and the Middle East. While they have grown to reach middle-income status, they fall behind other global cities on many key competitiveness factors such as GDP and FDI.

Examples: Mumbai, Cape Town, Mexico City, Hangzhou

4. Factory China
There are 22 second and third-tier Chinese cities reliant on export manufacturing to power economic growth and international engagement. Although Factory China displays a GDP growth rate that is well above average, it fails to reach average levels of innovation, talent, and connectivity.

Examples: Shenyang, Changchun, Chengdu

5. Knowledge Capitals
These are 19 mid-sized cities in the U.S. and Europe that are considered centers of innovation, with elite research universities producing talented workforces.

Examples: San Francisco, Boston, Zurich

6. American Middleweights
These 16 mid-sized U.S. metro areas are relatively wealthy and house strong universities, as well as other anchor institutions.

Examples: Orlando, Sacramento, Phoenix

7. International Middleweights
These 26 cities span across several continents, internationally connected by human and investment capital flow. Like their American middleweight counterparts, growth has slowed for these cities since the 2008 recession.

Examples: Vancouver, Melbourne, Brussels, Tel Aviv

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Will Tesla Lose Its Spot in the Magnificent Seven?

We visualize the recent performance of the Magnificent Seven stocks, uncovering a clear divergence between the group’s top and bottom names.

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Will Tesla Lose Its Spot in the Magnificent Seven?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In this graphic, we visualize the year-to-date (YTD) performance of the “Magnificent Seven”, a leading group of U.S. tech stocks that gained prominence in 2023 as the replacement of FAANG stocks.

All figures are as of March 12, 2024, and are listed in the table below.

RankCompanyYTD Change (%)
1Nvidia90.8
2Meta44.3
3Amazon16.9
4Microsoft12
5Google0.2
6Apple-6.7
7Tesla-28.5

From these numbers, we can see a clear divergence in performance across the group.

Nvidia and Meta Lead

Nvidia is the main hero of this show, setting new all-time highs seemingly every week. The chipmaker is currently the world’s third most valuable company, with a valuation of around $2.2 trillion. This puts it very close to Apple, which is currently valued at $2.7 trillion.

The second best performer of the Magnificent Seven has been Meta, which recently re-entered the trillion dollar club after falling out of favor in 2022. The company saw a massive one-day gain of $197 billion on Feb 2, 2024.

Apple and Tesla in the Red

Tesla has lost over a quarter of its value YTD as EV hype continues to fizzle out. Other pure play EV stocks like Rivian and Lucid are also down significantly in 2024.

Meanwhile, Apple shares have struggled due to weakening demand for its products in China, as well as the company’s lack of progress in the artificial intelligence (AI) space.

Investors may have also been disappointed to hear that Apple’s electric car project, which started a decade ago, has been scrapped.

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