urbanisation icon

Urbanisation

  • What is the impact of this megatrend?
  • What are the potential implications for the future?
Capital at risk. The value of investments and the income from them can fall as well
as rise and is not guaranteed. You may not get back the amount
originally invested.

The rise of the mega city

In 1990 there were only 10 cities in the world with a
population exceeding 10 million –
the so-called ‘megacities’.

Today the number of worldwide megacities
has nearly tripled to 28.1
the Impact icon

The Impact

2 examples demonstrating
urbanisation

Perhaps somewhat ironically, as we become better connected, and the world becomes a smaller place, our populations are increasingly concentrating themselves in cities and large urban areas. This will further drive technological advancement and impact climate change, having its own influence on other megatrends.
1. There’s a massive migration to cities underway
Globally, more people live in urban than rural areas, and as the graph below shows, that trend looks set to continue. In 1950, 30% of the world’s population lived in urban areas, and that’s forecast to increase to 66% by 2050.2
Urban and rural population of the world, 1950-2050
urban and rural population of the world, 1950-2050 chart
2. Self-fulfilling prophecy
In the US, the patient-to-primary care physician ratio in rural areas is 39.8 physicians per 100,000 people, compared with 53.3 physicians per 100,000 in urban areas.3 This uneven distribution of physicians has proven to have an impact on the health of the population. With better healthcare outcomes likely, urban populations consequently grow faster than rural populations organically (without migration) as people are motivated to migrate towards them.

At the same time, urban areas tend to have better employment opportunities, better education and better access to social and cultural activities. This makes them more attractive places to live and makes it easier for businesses to flourish. In China, for example, the Urban per capita income is more than double the rural figure.4
100 cities in China with populations over 1 million
x2 by 2030
By 2030 – 2/3
the global population
will live in cities
Currently almost 50%2
the outlook icon

The Outlook

5 implications of this megatrend

These large-scale shifts in population lead to both opportunities and challenges for society. The requirements of future urban populations will be remarkably different to the cities of today, with citizens demanding connectivity to everything – every device, every entity and every object. Wireless connectivity will be paramount to improving quality of life in cities.
Here is what else it could mean for urban life:
1. New infrastructure
Mass migration will mean the need for new infrastructure and services. Transport infrastructure and networks will require upgrades due to the dominance of autonomous vehicles and the greater concentration of people.
2. No car ownership
A lack of space and the rise of autonomous cars will mean fewer people will own a car, preferring to use ‘summon-able’ services instead.
3. Healthcare systems will have to change
As population density grows to unprecedented levels, existing healthcare systems will need to be radically overhauled to deal with this influx. Traditional hospitals will come under significant strain if they do not utilise new technologies available to them.
4. Personal security will be a focus
With higher crime rates in cities than rural areas, governments will employ elevated levels of surveillance on citizens in cities, increasing connectivity means that every activity is logged and monitored.
5. ‘Smart Cities’ emerge
Cities will emerge, driven by modern urban populations that embrace technology to improve the efficiency of infrastructure and services.
More than half of the world’s
population now lives in towns and
cities, and by 2030 this number will
swell to about 5 billion. Much of this
urbanization will unfold in Africa and
Asia, bringing huge social, economic
and environmental transformations.
UNITED NATIONS POPULATIONS FUND (UNFPA)5

How do megatrends work?
View our infographic.

'Technological breakthrough' is a catalyst for other trends while also being key to many of the global issues we face.
The interconnectivity that characterises the world today means that none of these megatrends exists in isolation; when trends collide and overlap, new investment themes appear.
To learn more about megatrends, view our infographic below.

Download BlackRock's Megatrend Research Study

An examination of structural shifts in the global economy
  • How are megatrends relevant to investors?
  • 5 megatrends shaping our investment thinking

Investing in themes

We believe there are a number of investment themes that emerge at the intersection of the five megatrends that we have outlined.

Some investors may want to consider employing the skills of an active fund manager to select stocks that provide exposure to a particular theme – as long as they are prepared to pay the associated costs that may come with such investments. Others may want to consider a rules-based approach to thematic investing, whereby a set of rules – rather than a fund manager making an active decision – determine whether a company is connected to a theme or not. Today, investors can benefit from this new, low cost, approach to thematic investing.

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

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equity thematic fund range

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This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy.