Geography Reference
In-Depth Information
their own economies, and indeed many appear to be experiencing disec-
onomies of scale (OECD 2011; MGI 2011a). The share of global output
growth to 2025 accounted for by mega-cities of over ten million people is
forecast to be some 10 per cent, such that the overall contribution of the
mega-cities to total global output is expected to fall from 14 per cent in
2007 to 13 per cent by 2025. The changing geography of economic growth
away from both developed economies and also from the mega-cities of the
developing countries is likely to have profound impacts on the economic
geography of MNEs and FDI, as these firms increasingly adapt their loca-
tion strategies in order to achieve the first-mover advantages necessary to
capitalize on the new global growth patterns.
We can get a good sense of the likely orders of magnitude and the
emerging spatial patterns of global economic growth from a range of
indicators. In terms of the scale of the emerging markets, taken together,
the urban populations of China, India and Latin America are expected to
increase by some 700 million people by 2030, a figure which is of a similar
order of magnitude to the current combined populations of the USA and
the European Union (MGI 2009, 2010b, 2011b). In the developing world
as a whole, 235 million urban households are expected to have household
incomes of $20,000 or more (MGI 2011a). In China alone, some 50,000
skyscrapers are expected to be built (equivalent to ten times as many as
New York City), with 40 billion square metres of floor space in five million
buildings (MGI 2009); in terms of infrastructure this could amount to 170
new mass transit systems being built, along with some 5 billion square
metres of new roads (MGI 2009). In the case of India, some $1.2 trillion of
capital investment are projected to be required to meet the population and
demand increases of India's cities by 2030 (MGI 2010b). This is expected
to include 700‒900 million square feet of commercial and residential space
needs to be built every year, which is equivalent to the current scale of
Chicago. In terms of infrastructure, some 2.5 billion square metres of new
roads need to be built (MGI 2010b), along with 7400 kilometres of new
metros and subway systems (equivalent to 19 London Undergrounds, 22
New York Metros, 35 Paris Metros, or 36 Tokyo Metros).
These remarkable growth figures might appear to point to the geogra-
phy of economic growth in developing countries being still concentrated in
the mega-cities. However, as we have already seen, while developed coun-
tries are expected to contribute only 26 per cent of economic growth up
until 2025, the mega-city regions of the developing world are only expected
to contribute another 8 per cent of economic growth As such, almost two-
thirds of global economic growth to 2025 are expected to come from the
non
-mega-city regions of the developing world (MGI 2011a). Of this two
thirds of global growth, 29 per cent is forecast to come from rural regions
