Geography Reference
In-Depth Information
the largest and fast-growing BRIICS countries, such as China and India,
is already particularly noteworthy and reflects all the above expectations
(Athreye and Kapur 2009). The internationalization of MNEs from
developing countries is motivated by the search for strategic assets, such
as new technologies, capabilities and brands, for access to raw materials
and distribution networks. As succinctly put by Athreye and Kapur (2009,
p. 213), rather than exploiting existing assets, MNEs from developing and
transition countries are seeking to acquire or enhance their assets and to
upgrade their technological capabilities.
At the same time, agglomeration phenomena within the BRIICS econo-
mies, and more generally in the developing and transition areas of the
world, as we have seen, are occurring at an impressive speed. According
to the UN report on the State of the World Population 2007, the current
twenty-first century could also be labelled as the “Urban Millennium”
(UNFPA 2007). It is estimated that in the next decades up to 2030, 93 per
cent of urban growth will occur in developing countries, with 80 per cent of
urban growth occurring in Asia and Africa (UNFPA 2007). Thus, major
cities in these countries are expected to play an ever more prominent role
in the global city rankings, and their surrounding regions will increasingly
acquire the status of core regional locations within the global economy.
The patterns evident in terms of the geography of growth in the major
emerging economies are not, however, static or predetermined. Indeed,
recent evidence suggests that even these patterns are again evolving. The
mega-cities of the developing world, with populations of over 10 million
people, on average account for per capita GDP levels which are some 80
per cent higher than their national averages (MGI 2011a). As such, over
the last two decades, corporate and global investment strategies have
tended to focus primarily on investing in the developed economies, along
with the mega-cities of the large emerging countries, because together the
developed economies plus the emerging economy mega-cities account for
more than 70 per cent of the global economy (MGI 2011a). This pattern,
however, is likely to change significantly over the coming decades and
there are two reasons for this. Firstly, developing countries as a whole
are expected to contribute 74 per cent of economic growth up to 2025
(MGI 2011a), three times the total global economic growth contribution
of developed economies. Secondly, as has already been mentioned, the
increasing role in global output growth played by cities in the developing
countries is not expected to come from the very largest cities. As we have
seen, the contribution of the world's largest 100 cities (defined in terms of
economic output) to global output is expected to fall from 38 per cent in
2007 to 35 per cent in 2025 (MGI 2011a). This reflects an ongoing trend,
whereby over recent years most mega-cities have not grown faster than
