Saturday, June 25, 2011

Global Cities: The Future Centers of Power

Beijing skyline

Mubai skyline


The past two week has seen an ongoing competition sponsored by Wikistrat and judged by their chief analysis Thomas PM Barnett. Barnett provided his readers with an update on the week two results in a post this week. He begins by explaining how it is run and his responsibility.

As head judge of Wikistrat’s International Grand Strategy Competition, I wanted to update everybody on what’s emerged across the second week of the contest. As you may already know, the competition brings together approximately 30 teams comprised of PhD and masters students from elite international schools and world-renowned think tanks. Those teams, evenly distributed over a dozen or so countries (so as to encourage intra-country as well as inter-country competition), were challenged in Week 2 to come up with national and regional trajectories in relation to their country-team assignments (Brazil, China, EU, India, Iran, Israel, Japan, North Korea, Pakistan, Russia, South Africa, Turkey & US).
As head judge, I assign points to teams based on their activity throughout the week. In this second week, each team generated those two trajectories to the tune of about 10,000 words each, or close to 300,000 words across all the teams. Naturally, a ton of interesting nuggets emerged, so here’s my hit list of provocative ideas.
Those nuggets number twelve theories or visions of the future and range from seeing the U.S. re-focus on the Western Hemisphere, and the EU encouraging immigration from fellow Roman Catholic states/regions, to India and China's growing influence. One topic heading caught my eye because I had just been reading another blog that had a great post that supported the contention that:

4) The future is all about who’s got the most global cities (EU2/Oxford)

Barnett has this to add about this opinion from the Oxford team.

I’m a big believer in this, because if you add up the coastal megacities of the world, you’ve got half the planet’s population and the vast majority of its connectivity and traffic. Get the coastal megacities wired up right, and globalization can’t fail. Team Oxford brought this out in their critique of Europe’s lack of global cities, saying that, besides London, none of the capitals really qualify on the scale of such behemoths as New York, Los Angeles, Shanghai, Hong Kong, Mumbai, Istanbul, etc. EU2’s point: make the investment if you want to stay relevant in the rule setting.
Read more:
Grand Strategic Competition Update (Week 2)

Shanghai skyline

The support for the comments about global cities is found in this post from The Enterprise Resilience Management Blog where Steve DeAngelis writes this about emerging market consumers and where they will live.
In several past posts, I've made the assertion that economic progress generally precedes political transformation. The logic for that is fairly straight forward. When a population moves out of poverty and into the middle class (i.e., its members find themselves with discretionary spending money), their attention naturally turns to politics. Why? The reasons are many. To name a few: they don't want their hard-earned cash taxed too heavily; they want freedom of movement and expression; and they expect the government to provide them with services that improve their quality of life. Because economic progress has such a dramatic impact on politics, both political and economic analysts are carefully watching the emergence of the new global upper and middle classes. Fareed Zakaria told Nora Dunne, "The growth in emerging markets is not just at the economic level. It's also happening in terms of psychology. Chinese, Indians, and Koreans are feeling a much greater sense of political confidence and assertiveness. You see this on the world stage everywhere."
Zakaria's claim that economic progress is leading to political transformation "everywhere" may sound like hyperbole, but it is not far from the mark. There are only a few dark corners of the world where globalization has yet to shine its light. Most new members joining the global upper and middle classes will come from urban settings. Analysts from McKinsey & Company claim, "Over the next 15 years, 600 cities will account for more than 60 percent of global GDP growth."
The next sentence in the article has a link to interactive map that allows the viewer to see the pattern of growth. DeAngelis quotes from an article published by McKinsely.
"More than 20 of the world's top 50 cities ranked by GDP will be located in Asia by the year 2025, up from 8 in 2007. During that same time period, our research suggests, more than half of Europe's top 50 cities will drop off the list, as will 3 in North America. In this new landscape of urban economic power, Shanghai and Beijing will outrank Los Angeles and London, while Mumbai and Doha will surpass Munich and Denver. The implications—for companies' growth priorities, countries' economic relationships, and the world's sustainability strategy—are profound." ["Urban economic clout moves east," by Richard Dobbs, Jaana Remes, and Sven Smit, McKinsely Quarterly.
Read more
Emerging Market Consumers, Part 1

Here is the link to the McKinsey Quarterly site and the interactive map that is an excellent source to illustrate the effective spread of the middle class around the globe. Click on the map link and see the world of the future open to explore with the click of your mouse.
Cities: The Next Frontier for Global Growth

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