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Investing Megatrend: How Rapid Urbanisation is Shaping the Future

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An Investing Megatrend: How Rapid Urbanisation is Shaping the Future

How Rapid Urbanisation 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 Urbanisation

Today’s infographic comes to us from iShares by BlackRock, and it highlights the case for rapid urbanisation 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.

RegionUrban share of population (1900)Urban share of population (2016)
United States40%82%
Japan12%91%
Western Europe41%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 urbanisation 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.

RankCountryUrban population growth (2018-2050)
#1India416 million people
#2China255 million people
#3Nigeria189 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 MegacitiesPopulation% of Urban Population
199010153 million7%
201023370 million12%
203041730 million14%

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 revolutionised.

The Urban Opportunity

Rapid urbanisation 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 urbanisation will have a wide-ranging impact on global economics, demographics, and society as a whole.

As rapid urbanisation and other megatrends collide and feed off each other, there’s no doubt that even more thematic investment opportunities will be created.

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Automotive

The Hydrogen City: How Hydrogen Can Help to Achieve Zero Emissions

Cities are drivers of growth and prosperity, but also the main contributors of pollution. Can hydrogen fuel the growth of cities with clean power?

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In the modern context, cities create somewhat of a paradox.

While cities are the main drivers for improving the lives of people and entire nations, they also tend to be the main contributors of pollution and CO2 emissions.

How can we encourage this growth, while also making city energy use sustainable?

Resolving the Paradox

Today’s infographic comes to us from the Canadian Hydrogen and Fuel Cell Association and it outlines hydrogen technology as a sustainable fuel for keeping urban economic engines running effectively for the future.

The Hydrogen City: How Hydrogen Can Help to Achieve Zero Emissions

The Urban Economic Engine

Today, more than half of the world’s population lives in cities, and according to U.N. estimates, that number will grow to 6.7 billion by 2050 – or about 68% of the global population.

Simultaneously, it is projected that developing economies such as India, Nigeria, Indonesia, Brazil, China, Malaysia, Kenya, Egypt, Turkey, and South Africa will drive global growth.

Development leads to urbanization which leads to increased economic activity:

The difficulty in this will be achieving a balance between growth and sustainability.

Currently, cities consume over two-thirds of the world’s energy and account for more than 70% of global CO2 emissions to produce 80% of global GDP.

Further, it’s projected by the McKinsey Global Institute that the economic output of the 600 largest cities and urban regions globally could grow $30 trillion by the year 2050, comprising for two-thirds of all economic growth.

With this growth will come increased demand for energy and C02 emissions.

The Hydrogen Fueled City

Hydrogen, along with fuel cell technology, may provide a flexible energy solution that could replace the many ways fossils fuels are used today for heat, power, and transportation.

When used, it creates water vapor and oxygen, instead of harmful smog in congested urban areas.

According to the Hydrogen Council, by 2050, hydrogen could each year generate:

  • 1,500 TWh of electricity
  • 10% of the heat and power required by households
  • Power for a fleet of 400 million cars

The infrastructure requirements for hydrogen make it easy to distribute at scale. Meanwhile, for heat and power, low concentrations of hydrogen can be blended into natural gas networks with ease.

Hydrogen can play a role in improving the resilience of renewable energy sources such as wind and solar, by being an energy carrier. By taking surplus electricity to generate hydrogen through electrolysis, energy can be stored for later use.

In short, hydrogen has the potential to provide the clean energy needed to keep cities running and growing while working towards zero emissions.

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Cities

The 100 Tallest Buildings in New York City

This visualization plots out the tallest buildings in New York City, as well as a few in the pipeline that will change the Big Apple’s skyline forever.

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The 100 Tallest Buildings in New York City

If you go to the Big Apple, the city’s signature skyline can make quite an impression.

The fact is, New York City has over 6,000 high-rise buildings in total, 274 of which are skyscrapers standing over 492 ft (150 m) tall. It’s an impressive portfolio of real estate, putting NYC as the number two destination globally for such towers, only behind Hong Kong.

But while some of the buildings have dominated the skyline seemingly forever, it’s also a landscape that is changing fast. New projects coming online will be among the city’s tallest, and they will dramatically alter any view of Midtown of Lower Manhattan for future onlookers.

A List of NYC’s Tallest Buildings

Today’s infographic comes to us from Liberty Cruise, and it shows the tallest buildings in New York City.

Here are the individual profiles of the current top ten:

RankBuilding NameHeightCompletion Date
#1One World Trade Center1,776 feet (541 m)2014
#2432 Park Avenue1,396 feet (426 m)2015
#330 Hudson Yards1,268 feet (387 m)2019
#4Empire State Building1,250 feet (381 m)1931
#5Bank of America Tower1,200 feet (366 m)2009
#63 World Trade Center1,079 feet (329 m)2018
#753W531,050 feet (320 m)2018
#8Chrysler Building1,046 feet (319 m)1930
#9The New York Times Building1,046 feet (319 m)2007
#1035 Hudson Yards1,009 feet (308 m)2018

Two of the biggest skyscrapers, the Chrysler Building and the Empire State Building, were erected during the Great Depression and still crack the top ten list today.

The Chrysler Building was actually the first skyscraper ever to be built at a height exceeding 1,000 feet. Meanwhile, the Empire State building, which was finished one year later, was the “world’s tallest building” for nearly 40 years.

However, as you can see, the rest of the buildings on the top ten list are more recent builds. It’s a testament to how fast the skyline of New York City has changed even in the last decade.

Towers in the Pipeline

But that’s not all, because the skyscraper boom in NYC hasn’t ended yet. The following megatowers are closing in on completion, and will displace many at the top of the current list:

111 West 57th Street
This building is set to be operational in mid-2019, and it’s already very noticeable on the NYC skyline. With a height of 1,428 feet (435 m), it will be the “skinniest” skyscraper in the world when completed, with a width-to-height ratio of 1:23.

Central Park Tower
This building, which was designed by the same people who did the Burj Khalifa in Dubai, will be the tallest building in the country by roof-height when done in 2020. It will clock in at 1,550 feet (472 m), making it the most sky-high residential building in the world.

45 Broad Street
With a height of 1,200 feet (366 m), this new building in Lower Manhattan is expected to be completed by 2021. If it were finished today, it would tie the Bank of America Tower for the fifth spot on a list of tallest buildings in the city.

One Vanderbilt
This massive building will be the fourth tallest in the city when completed in 2021. Standing at 1,401 feet (427 m), it will have a highly anticipated observation deck set 1,000 feet above the ground.

Want to visualize more data about the Big Apple?

Check out this animation, which shows the population pulse of a Manhattan workday.

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