Making way for mega economic regions.
Prior to the industrial revolution, major cities were often dangerous, overcrowded and full of disease. Industrialisation brought productivity and factories delivered jobs and access to greater wealth.
The past 150 years has also seen the arrival of the ‘megacity’ - cities with populations greater than 10 million people. We may come to think of these places as huge economic engines and an integral part of the future when, in fact we can equally come to think of them as dying relics of the first part of the industrial age.
Megacities come with their challenges, frequently including overcrowding, price inflation, transportation chaos, violence and pollution.
To be economically viable and attractive, megacities must not rely on the sheer volume of inhabitants, rather the number of skilled workers – an issue currently dividing both countries and cities.
By blurring the lines of geography, we can reconsider these areas, to think not so much of ‘megacities’ in the future but ‘mega economic regions’ or ‘megazones’.
The area surrounding and encompassing Brussels, Antwerp, Rotterdam, and Amsterdam is one example; not just New York but an area encompassing Boston, Philadelphia, and Washington. No longer just Hong Kong but an area encompassing Guangzhou and Shanghai with over 50 million people. In Australia, it is Brisbane, Sydney, Melbourne, and everything in-between with a potential population of 30 million people that have to compete in this new, connected world.
Image: Current megacities with population above 10 million
In Australia we look to Adelaide as an example of a city where the youth has left for opportunities in
Melbourne and Sydney. From 1976 to 2014 between 18,000 and 30,000 South Australians left the state each year. Many were professional couples. This to the benefit of Sydney and Melbourne.
How do we prevent Australia from becoming the ‘Adelaide’ of the world?
What happens if Australia is no longer competitive in a world that contends for creative, talented and knowledgeable workers?
Investors and occupiers should review their location strategy with a view to adapting to a world with more fluid work practices and a world that is evolving from nation-state capital cities to larger economic zones. This change in the way the world economy works may result in changes to tax systems, to the potential benefit or detriment of investors and occupiers of property.
To learn what’s next for megacities, contact Tony Crabb, National Director, Research.
Read more of Cushman & Wakefield’s Futurology series, click here.