Cities and Growth: A Measure for a National Economy in Your Neighbourhood

Emerging economies are often described as being in the process of increased urbanisation. In industrialised countries the process of growth in manufacturing is often met with an influx of population from rural areas into the centres of production within metropolitan areas. This process which took place in the late 19th century in Europe and North America and is currently producing the need for additional labour into cities within BRICS nations is not solely representative of a country’s economy, but is a reflection of how its economic units, its major cities, produce and perform in a global economy. This second wave of industrialisation comes with growth in urban centres and can be seen as a added form of urbanisations to complete that which had occurred in past generations.

Regional economic progress is often ignored in analyses of global economic performance, but polices that produce effective cities also are the heart of growth for national economies. Often in larger nations some regions and cities could be seen as economic engines, producing IP, administering natural resources or being financial hubs for those exports produced by the entire country’s output. In many cases, certain regions of a country could be in recessionary trends while others are growing, leading to a net loss for a country but still maintaining an innovative strategy for specific regions or cities.

Brookings and LSE took to producing the first ever comprehensive study on cities and growth post 2008 recession in their report called Global MetroMonitor comparing cities in the US and Europe to those in emerging economies. Their findings were striking, showing that in the study of 150 cities worldwide, of the top 30 cities with healthy growing economies post recession, 29 were outside of the US and Europe. Emerging economies seemed to be driven by emerging cities, which is no surprise for most as urbanisation in countries like China is fuelled by employees that come from rural areas to support production in larger Chinese cities. The study showed that the top performing cities in the study were mostly located in Asia and Latin America, regions that traditionally are mired with a lack of growth and poverty and are marked by areas of cities that contain what is known in Brazil as favelas, namely poor ignored pockets of major cities that exist all over Latin America and Asia.

The bottom 30 of the 150 cities were representative of what most would have thought would have been the top 30 only four years ago. Most of the bottom 30 were in the US and Europe where most people in those regions live. It seems that the trend of emerging market growth is not a simple reflection of a country’s progress, but shows how each city and neighbourhood within it contributes to the global recovery or weighs in on a global slowdown. An economy is simply an assembly of communities in major cities, all which form a collective response to national issues. The full Brookings/LSE report can be seen here.