Demographics
Investing Megatrend: How Rapid Urbanization is Shaping the Future

How Rapid Urbanization is Shaping the Future
The world is constantly changing, and many of these shifts have the potential to alter the investment landscape.
While some of these changes can be temporary and fleeting, others can be powerful, transformative “megatrends” that shape how society is organized at a fundamental level.
One such megatrend that has been in place for decades is the rapid rate of population growth in urban areas — and while it’s been highly influential thus far, we’ve likely only seen the beginning of its formative impact on the global economy.
An Intro to Rapid Urbanization
Today’s infographic comes to us from iShares by BlackRock, and it highlights the case for rapid urbanization as being one of the most important overarching trends to watch in markets over the long term.
It’s a trend that originated in developed economies in the 21st century, as people transitioned from agricultural work to factory and service jobs.
Region | Urban share of population (1900) | Urban share of population (2016) |
---|---|---|
United States | 40% | 82% |
Japan | 12% | 91% |
Western Europe | 41% | 80% |
In these developed economies today, cities are major sources of innovation and wealth creation, and the World Bank estimates that over 80% of global GDP is now generated in cities.
A Global Shift
Over the coming decades, the large-scale role of cities will become even more amplified as rapid urbanization spills over to the rest of the world.
Billions of people — especially in Asia and Africa — will be seeking opportunities in cities over the coming decades. Between 2018 and 2050, the global urban population will increase from 55% to 68%, adding another 2.5 billion people to cities around the world.
Rank | Country | Urban population growth (2018-2050) |
---|---|---|
#1 | India | 416 million people |
#2 | China | 255 million people |
#3 | Nigeria | 189 million people |
Nearly 90% of this growth will be in Africa and Asia, with India alone adding 416 million new people to its cities — more than any other country in the world over this timeframe.
The Dawn of the Megacity
People are not only flocking to cities, they are flocking to megacities — urban conglomerations with more than 10 million people.
In just 40 years, the total amount of megacities will quadruple, gaining nearly 600 million residents in the process:
Year | # of Megacities | Population | % of Urban Population |
---|---|---|---|
1990 | 10 | 153 million | 7% |
2010 | 23 | 370 million | 12% |
2030 | 41 | 730 million | 14% |
With billions of new people living in urban areas — and many of them living in megacities — we will have to rethink how our cities are designed and engineered.
And as this happens, the city as we know it will be revolutionized.
The Urban Opportunity
Rapid urbanization will create both opportunities and challenges for society, and a plethora of investment possibilities in the process.
As global cities become more integrated with technology, new business models will emerge as cities become smarter, denser, and more connected.
These potential opportunities include:
- Smarter cities
Cities will embrace technology to improve services and infrastructure, adding tech-driven features like smart lighting or real-time traffic updates. - New infrastructure
Cities and companies will invest heavily to build next generation infrastructure, such as data centers, green energy, and citywide WiFi. - A focus on personal security
With higher crime rates in cities than rural areas, governments will employ elevated levels of surveillance on citizens in cities. Increasing connectivity means that every activity is logged and monitored. - New services
As cities become more connected, non-traditional players — such as cybersecurity experts or cleantech engineers — will be needed as a part of city planning processes. - No car ownership
A lack of space and the rise of autonomous cars will mean fewer people will own a car, preferring to use ‘summon-able’ services instead. - New healthcare systems
As population density grows to unprecedented levels, existing healthcare systems will need to be radically overhauled to deal with this influx.
Rapid urbanization will have a wide-ranging impact on global economics, demographics, and society as a whole.
As rapid urbanization and other megatrends collide and feed off each other, there’s no doubt that even more thematic investment opportunities will be created.
Demographics
Comparing Population Pyramids Around the World
Population pyramids can show a country’s demographic advantages and challenges at a glance. See how different parts of the world stack up.

Understanding and Comparing Population Pyramids
Demographic data can reveal all kinds of insights about a population, from the country’s fertility and mortality rates to how certain events and policies have shaped the makeup of a population.
Population pyramids are one of the best ways to visualize population data, and comparing the pyramids of various countries and regions side-by-side can reveal unexpected insights and differences between groups.
This graphic uses population data from the United Nations to compare the demographics of some select nations and regions of the world, showcasing how much age distributions can vary.
Three Types of Population Pyramids
Although population pyramids can come in all shapes and sizes, most generally fall into three distinct categories:
- Expansive Pyramids: Recognized by their traditional “pyramid-like” shape with a broad base and narrow top, expansive pyramids reflect a population with a high birth rate along with a high mortality rate which is most common in developing countries.
- Constrictive Pyramids: With a narrow base and thicker middle and top sections of the pyramid, constrictive pyramids often occur in developed economies whose populations have low birth rates and long life expectancies.
- Stationary Pyramids: These pyramids showcase an evenly distributed population across age groups, often found in newly-developed countries which have stable birth and mortality rates.
Each population pyramid is essentially a visual snapshot of a nation’s current demographic breakdown, shaped by fluctuating birth and mortality rates as well as changes to immigration and social policies.
Understanding the inherent risks associated with different pyramid types can help give insight into the challenges these populations face.
The Risks of Different Population Pyramid Types
Each type of population pyramid structure has unique challenges and advantages often characterized by the country or region’s current stage of economic development.
Populations with expansive pyramids, such as the one representing the continent of Africa, have the advantage of a larger youth and working-aged population, however this advantage can be rendered null if job growth, education, and health care aren’t prioritized.
Countries with constrictive pyramids like Japan face the challenge of supporting their outsized aging population with a diminishing working-aged population. While immigration and increasing birth rates can help in both the short and long term, due to the working population being outnumbered, countries with constrictive pyramids must find ways to increase their productivity to avoid potential declines in economic growth.
China and India’s Demographics Compared
After the world’s population reached eight billion people last year, 2023 brought a new population milestone as India overtook China as the world’s most populous country.
When you compare the two nations’ population pyramids, you can see how India’s population has a strong base of young and working-aged people compared to China’s more constrictive population pyramid that also features a higher median age.
This demographic difference is largely shaped by China’s one-child policy which since 2021 was loosened to be a three-child policy. As a result, China’s total fertility rate is around 1.2 today, in contrast to India’s total fertility rate of 2.0.
While India is set to ride the productivity boom of its large working-age population, the country will have to ensure it can keep its population pyramid stable as the majority of the population ages and total fertility rates continue to decline.
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Interested in learning more about the various factors that affect demographics?
VC+ Members get an exclusive look comparing the G7 and BRICS nations, how war shapes population pyramids, and immigration’s role in demographics. Unlock this in-depth briefing and hundreds of other visual insights with our newly available VC+ Archive. |
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