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
Mapped: The Top 10 Billionaire Cities
Where do the most billionaires live? For years, NYC has topped the list of billionaire cities, but 2020 marked a monumental shift.
Mapped: The Top 10 Billionaire Cities in 2020
In 2020, the world gained 493 new billionaires—that’s one every 17 hours.
For the last seven years, New York City has been home to more billionaires than any other city in the world. However, last year marked a monumental shift in the status quo.
Beijing has unseated the Big Apple, and is now home to 100 billionaires. That’s one more billionaire than the 99 living in New York City.
Today’s map uses data from Forbes to display the top 10 cities that house the most billionaires.
Where do the Most Billionaires Live?
The richest of the rich are quite concentrated in cities, but some cities seem to best suit the billionaire lifestyle. Here’s a breakdown of the top 10 billionaire capitals and the collective net worth of all the ultra wealthy that live there.
|Rank||City||Region||Number of Billionaires||Net Worth of the City's Billionaires|
|#2||New York City||🇺🇸 North America||99||$560.5B|
|#3||Hong Kong||🇨🇳 Asia||80||$448.4B|
|#9||San Fransisco||🇺🇸 North America||48||$190.0B|
Some cities have some obvious billionaires that come to mind. New York’s richest person and former mayor, Michael Bloomberg, is worth $59 billion. Beijing’s richest billionaire is the founder of TikTok (among other things), Zhang Yiming with a net worth of $35.6 billion.
In terms of the locations themselves, London, New York, and San Francisco are the only Western cities to make the list. Though New York was ousted from the top position last year, altogether the city’s billionaires are still worth more than Beijing’s.
One new city to make the top 10 list of billionaire cities was Hangzhou, the home of Jack Ma. It booted out Singapore from the 10th spot.
East Meets West
More than half of the top 10 cities are located in Asia, providing evidence of the shift eastwards when it comes to seats of wealth. Five of the six Asian cities listed are all in China.
What’s helped lead to this?
The country has seen an e-commerce boom, not in the least thanks to the pandemic. Additionally, the efficient handling of COVID-19 has allowed the economy to get back on track much more quickly than other countries. According to the BBC, 50% of China’s new billionaires have made their wealth either through tech or manufacturing.
Four of the Chinese cities on the list also had the biggest billionaire growth in 2020. Each of them gained more than 10 net new billionaires:
- 🇨🇳 Hangzhou: 21
- 🇨🇳 Shanghai: 18
- 🇨🇳 Shenzhen: 24
- 🇨🇳 Beijing: 33
The only other city to gain more than 10 new billionaires in 2020 was San Francisco with 11.
Now sitting at 698 billionaires, China is coming up on the 724 held by the United States. Beijing overtaking NYC could be the beginning of a larger tipping point.
Asia-Pacific’s collective 1,149 billionaires are worth $4.7 trillion, while U.S. billionaires are worth $4.4 trillion in total wealth.
Overall, it looks like the wealth tides may be turning as China continues to progress economically and more billionaires become based in the East over the West.
Which Asian Economies Have the Most Sustainable Trade Policies?
The Sustainable Trade Index ranks 19 Asian economies and the U.S. across three categories of trade sustainability.
Which Asian Economies Have the Most Sustainable Trade Policies?
To say that Asia has benefited from international trade is an understatement. By opening its economies to the rest of the world, the region has become a leading exporter in many of today’s most important industries.
Trade has also improved Asia’s quality of life, lifting over one billion people out of poverty since 1990. Without the proper controls, however, such rapid growth could have harmful effects on Asia’s environment and society.
In this infographic from The Hinrich Foundation, we break down the results of their 2020 Sustainable Trade Index (STI). Since 2016, this index has ranked 19 Asian economies and the U.S. across three categories of trade sustainability: economic, social, and environmental.
What Exactly is Sustainable Trade?
International trade is an important source of economic growth, enabling domestic businesses to expand, reach new customers, and gain exposure to foreign markets.
At the same time, countries that focus too heavily on exports put themselves at greater long-term risk. For example, an aggressive expansion into manufacturing is likely to impair the quality of a country’s air, while overdependence on a single product or sector can create an economy that is susceptible to demand shocks.
“The primary principle which underpins sustainable trade is balance. Trade cannot be pursued solely for economic gains, without considering environmental and social outcomes.”
– Merle A. Hinrich
Thus, sustainable trade supports not only economic growth, but also environmental protection and strengthened social capital. It involves finding a balance between short-term incentives and long-term resilience.
Measuring Sustainable Trade
The Sustainable Trade Index (STI) is based on three underlying pillars of trade sustainability. Every economy in the STI receives a score between 0 and 100 for each pillar.
|Pillar||Number of Indicators||Examples of Indicators|
The economic pillar measures a country’s ability to to grow its economy through trade, while the social pillar measures a population’s tolerance for trade expansion, given the costs and benefits of economic growth.
Last but not least, the environmental pillar measures a country’s proficiency at managing climate-related risks. Individual pillar scores are then aggregated to arrive at an overall ranking, which also has a maximum possible score of 100.
The Sustainable Trade Index 2020: Overall Rankings
For the first time in the STI’s history, Japan and South Korea have tied for first place. Both countries have placed in the top five previously, but 2020 marks the first time for either to take the top spot.
|1 (tied)||🇯🇵 Japan||75.1|
|1 (tied)||🇰🇷 South Korea||75.1|
|4||🇭🇰 Hong Kong||68.3|
|10||🇱🇰 Sri Lanka||50.4|
|15 (tied)||🇮🇳 India||46.9|
|15 (tied)||🇻🇳 Vietnam||46.9|
Advanced economies like Singapore, Hong Kong, and Taiwan were also strong performers, each scoring in the high 60s. At the other end of the spectrum, developing countries such as India and Vietnam were tightly packed within the 40 to 50 range.
To learn more, here’s how each country performed in the three underlying pillars.
1. Economic Pillar Rankings
Hong Kong topped the economic pillar for the first time thanks to its low trade costs and well-developed financial sector. Financial services have increased their contribution to Hong Kong’s GDP from 13% in 2004 to 20% in 2018.
The region’s recently initiated national security law—which has resulted in greater political instability—may have a negative effect on future rankings.
|1||🇭🇰 Hong Kong||69.6|
|4||🇰🇷 South Korea||63.3|
|5 (tied)||🇲🇾 Malaysia||61.2|
|5 (tied)||🇺🇸 U.S.||61.2|
|9 (tied)||🇯🇵 Japan||58.6|
|9 (tied)||🇵🇭 Philippines||58.6|
|13||🇱🇰 Sri Lanka||54.7|
China was also a strong performer, climbing to third for the first time. Asia’s largest economy benefits from a well-diversified group of trading partners, meaning it doesn’t rely too heavily on a single market.
The bottom five countries—India (16th), Myanmar (17th), Thailand (18th), Pakistan (19th) and Laos (20th)—suffered from issues such as payment risk, which is measured as the difficulty of getting money in and out of a country. This risk is especially damaging to trade because it discourages foreign direct investment.
2. Social Pillar Rankings
The social pillar features the highest average score, but also the largest gap from top to bottom. This gap has expanded over recent years, growing from 43.9 points in 2018 to 52.3 in 2020.
|3||🇰🇷 South Korea||86.9|
|8||🇭🇰 Hong Kong||57.8|
|18||🇱🇰 Sri Lanka||46.1|
Taiwan claimed the top spot for the second time, solidifying its reputation as Asia’s leader in human capital development. It performed well in the educational attainment indicator, with 93.6% of its population receiving a tertiary education.
China, despite its success in other pillars, only managed 16th. This was partly due to the effects of its now defunct one-child policy, which has been responsible for creating gender imbalances and a shrinking population.
3. Environmental Pillar Rankings
The environmental pillar has the lowest average score of the three. Japan, Singapore, Hong Kong, and South Korea were the only countries to score above 75.
|3||🇭🇰 Hong Kong||77.4|
|4||🇰🇷 South Korea||75.2|
|8||🇱🇰 Sri Lanka||50.4|
The top four performed well in areas such as air quality and water pollution, and with the exception of Hong Kong, have all introduced carbon pricing schemes in the past decade. This doesn’t mean these countries are without their flaws, however.
Land-constrained Singapore, for instance, ranked 16th in the deforestation indicator. The city-state is one of the densest population centers in the world, and has cut down forests to clear space for further settlement and urbanization.
Building Back Better From COVID-19
Despite the damage that COVID-19 has caused, there are some silver linings. This includes the environmental benefits experienced by China, where lockdowns reduced carbon emissions by 200 million tonnes in a single month. It’s been estimated that after two months, China’s reduced pollution levels saved the lives of 77,000 people.
These temporary improvements are an explicit reminder of the environmental and social costs associated with economic growth. In response, governments in Asia are taking steps to ensure the long-term sustainability of their nations. Japan and South Korea both announced their commitments to achieving carbon neutrality by 2050, while China set a similar goal for 2060.
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