Urbanisation and development

Context: World Bank has projected that every seven of 10 people will be living in urban cities by 2050. Therefore, the emphasis on urbanisation and its correlation with sustainable development has never been stronger.

It not only gives a clear picture of the degree of concentration of people in a region, but also highlights the underlying patterns that lead to the formation of a city.

What is Urbanisation?

Urbanization refers to the process of increase in population in cities and towns compared to rural areas. It rests on the following pillars that shape the very character and nature of the process:

– Technology

– Tolerance

– Talent

– Territorial Assets

What is the new understanding wrt the process of Urbanisation?

Historically, the rise of city centres coincided with the industrial society reaching its heights. For the longest time, therefore, migration to urban spaces was only understood unilaterally in the context of employment opportunities alone.

However, in recent years, urbanisation has also been closely associated with globalising forces that aim at integrative development and poverty reduction.

Cities have become the centre of connectivity globally, fostering vigorous efforts toward reducing income inequality and increasing the ease of living for their population.

Today, people migrate from the countryside to the cities in search of leading a better life.

This urbanisation also impacts the rural regions, as remittances from the city result in a higher rate of consumption and asset holdings.

Urban cities, as the drivers of growth and development, also foster economic competition.

– City competitiveness, is the ability of cities to create strong markets that produce goods and services that represent good value in relation to comparable products of other urban regions

What are the global trends wrt Urbanisation?

Global South is experiencing an acceleration in the pace of urbanisation. This fast-paced urbanisation has also complemented the emergence of competitive markets from the developing world at the global centre stage.

The timing of these spatial transformations in the developing world is rooted in historical processes. The period from the 14th till the 19th century witnessed urbanisation in the now developed countries.

India

In India, the first two decades of the 21st century saw a sustained rise in the degree of urbanisation:

– From around 27% in 2000 to nearly 35% of the total population living in urban areas in 2020.

– With a growth of about 7.2%, the World Bank data shows a gradual rise in the percentage of the population concentrated in urban cities. The average economic growth rate in the country was recorded at 4.4% in the same period. Globally, the economic growth rate stood at a mere 1.4% in the 2000-2010 period.

Other developing countries

Among other developing countries, the same trends are visible: A rise in the degree of urbanisation has positively resulted in a rising economic growth.

South Africa, the period from 2000 to 2020 saw a 10.4% rise in the degree of urbanisation. In the same period, the economy grew by almost 0.69%.

Thailand experienced a 20.44% rise in urbanisation from 2000 to 2020, with the average economic growth rate at about 2.87%. This is not to say that the economic growth rate was only driven by urbanisation but that the latter is an important variable and needs to be given attention.

What is the relation b/w economic growth and Urbanisation?

The relation between economic growth rate and the degree of urbanisation is mutually reinforcing, as higher economic growth results in high incomes that influence the rate of urbanisation.

At the same time, an increase in urbanisation leads to a spurt in innovation and greater adoption of technology among the masses leading to the creation of investment opportunities that further trigger the process of job creation.

What are some challenges being faced by the cities?

In the rapidly urbanising world, maintaining the quality of services, achieving sustainable development and preserving competition are some of the significant challenges facing the cities.

What is the way forward?

Urbanisation is influenced by several historical and developmental processes. As a companion to development, it is pertinent to closely watch the pace of urbanisation in India, as it will only lead to the creation of sustainable pathways.

Source: This post is based on the article “Urbanisation and development” published in the Business Standard on 21st Apr 22.