What is Urban Dynamics?

Published on 16th Nov 2020

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First, it’s good to understand that, prior to Covid-19, various sources predicted that two-thirds of the world's population will live in urban areas by 2050. 90% of urban growth will take place in Africa and Asia, with China and India expected to see the greatest urban growth between 2018 and 2050.  China and India build cities in a way that Western European countries simply do not: it is part of their growth plan.

In Westernised economies, for example in the USA and Europe, there also continues to be massive urban migration. Rapid urbanisation is also taking place in smaller cities. It’s quite possible that this trend will be exacerbated by the ongoing impact of Covid-19 and climate change.

Urban dynamics are the changing elements that make up an urban environment: the opportunities and the threats. The people and their governance. The commercial impacts of human geography.

Why should businesses care about urbanisation?

Large scale shifts in population lead to both opportunities and challenges for businesses - economically, socially and environmentally. Enterprises that do not take into account the effects of urban dynamics on their business are unlikely to be the winners in the next economic cycle.

Much of the change brought about by urbanisation is good for business, such as the creation of larger markets for goods and services; an increase in the labour markets; increased wealth; closer proximity of businesses to their customers and services; better public services; an abundance of recreation and leisure  facilities; social and cultural diversity; improved technology; improved infrastructure; reduction of transportation costs and the creation and dissemination of knowledge and ideas.

However, the potential for overcrowding brings with it a number of disadvantages including environmental impacts and pollution; scarcity of land and limitations of real estate; strains on infrastructure and natural resources; traffic congestion and mobility costs; issues with crime and personal safety; as well as wealth disparity and urban poverty.

Companies will prosper if they can devise strategies to deliver products and services which exploit the advantages whilst limiting the disadvantages. Understanding urban dynamics and flexing business models to adapt to urbanisation will provide you with a competitive edge.

Has Covid-19 affected the progress of urbanisation?

It’s too soon to fully understand the long-term effects of Covid-19 on urbanisation. One thing for sure is that variances have increased as a result. However, a glance through the history books shows that cities are shaped by the effects of pandemics. A walk through the streets of the world’s major cities shows how they have thrived despite the challenges posed by pandemics.

We believe that cities will continue to flourish in the medium term and that astute businesses will take advantage of the opportunities of urban dynamics while mitigating the downsides.



* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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