Cities have powered the world economy for centuries. Large cities generate about 75 percent of global GDP today and will generate 86 percent of worldwide GDP growth between 2015 and 2030. Population growth has been the crucial driver of cities’ GDP growth, accounting for 58 percent of it among large cities between 2000 and 2012. Rising per capita income contributed the other 42 percent.
However, the world’s cities are facing more challenging demographics, and the days of easy growth are over. In the past, city economies expanded largely because their populations were increasing due to high birthrates and mass migration from rural areas. Both of those sources of population growth are now diminishing. Global population growth is slowing because of declining fertility rates and aging. At the same time, rural-to-urban migration is running its course and plateauing in many regions. How cities adjust to the new reality is important not only for their prospects but also for those of nations that will continue to rely on thriving cities for rising prosperity.