The Metropolitan Century UndersTanding UrbanisaTion and iTs ConseqUenCes Contents The Metropolitan Century Introduction: The century of urbanisation Chapter 1. A short history of urbanisation UndersTanding UrbanisaTion and iTs Chapter 2. The secrets of successful cities ConseqUenCes Chapter 3. How cities affect citizens, countries and the environment Chapter 4. The cities of the 21st century T h e M e t r o p o lit a n C e n t u r y U n d e r s T a n d in g U r b a n is a T io n a n d iT s C o n s e q U e Consult this publication on line at http://dx.doi.org/10.1787/9789264228733-en. nC e s This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. Visit www.oecd-ilibrary.org for more information. isbn 978-92-64-22872-6 04 2015 03 1 P The Metropolitan Century UNDERSTANDING URBANISATION AND ITS CONSEQUENCES ThisworkispublishedundertheresponsibilityoftheSecretary-GeneraloftheOECD.The opinionsexpressedandargumentsemployedhereindonotnecessarilyreflecttheofficial viewsofOECDmembercountries. This document and any map included herein are without prejudice to the status of or sovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundaries andtothenameofanyterritory,cityorarea. Pleasecitethispublicationas: OECD(2015),TheMetropolitanCentury:UnderstandingUrbanisationanditsConsequences,OECD Publishing,Paris. http://dx.doi.org/10.1787/9789264228733-en ISBN978-92-64-22872-6(print) ISBN978-92-64-22873-3(PDF) ThestatisticaldataforIsraelaresuppliedbyandundertheresponsibilityofthe relevantIsraeliauthorities.Theuse ofsuchdatabytheOECDiswithoutprejudicetothestatusoftheGolanHeights,EastJerusalemandIsraeli settlementsintheWestBankunderthetermsofinternationallaw. Photocredits:Cover©AlexanderDemyanenko/Shutterstock.com,©MaxyM/Shutterstock.com,©leungchopan/ Shutterstock.com CorrigendatoOECDpublicationsmaybefoundonlineat:www.oecd.org/about/publishing/corrigenda.htm. ©OECD2015 Youcancopy,downloadorprintOECDcontentforyourownuse,andyoucanincludeexcerptsfromOECDpublications,databasesand multimediaproductsinyourowndocuments,presentations,blogs,websitesandteachingmaterials,providedthatsuitable acknowledgmentofthesourceandcopyrightownerisgiven.Allrequestsforpublicorcommercialuseandtranslationrightsshouldbe submittedtorights@oecd.org.Requestsforpermissiontophotocopyportionsofthismaterialforpublicorcommercialuseshallbe addresseddirectlytotheCopyrightClearanceCenter(CCC)[email protected]çaisd’exploitationdudroitdecopie (CFC)[email protected]. 3 FOREWORD – Foreword Urbanisation is progressing as fast as never before in history. Understanding its causes and consequences is crucial for our ability to shape the process and ensure that it will benefit all citizens. The Metropolitan Century explains why people move into cities and shows that the ongoing urbanisation process promises to improve economic conditions and the well-being of the world’s population. Urbanisation is good for residents who move into cities because they benefit from higher wages and the proximity to amenities. It is good for countries because cities tend to be more productive and innovative than rural areas. Last but not least, it is good for the environment because the environmental impact of an urban population can be smaller than the environmental impact of the same population spread out over a large rural area. The report focuses on OECD member countries, but its analysis and insights are relevant beyond the OECD. Although urbanisation differs from country to country, it is shaped by common forces that are similar all over the world. Cities are growing because they are centres of economic activity and offer their residents opportunities for a better life. Policy makers in every country face the task to maximise the benefits of urbanisation while minimising its downsides. They need to provide services efficiently to residents, ensure that cities can reap agglomeration economies and reduce agglomeration costs. This report helps policy makers to achieve these objectives by providing a better understanding of the mechanisms behind them. Cities in OECD countries differ from cities in many other parts of the world in one crucial aspect. In most OECD countries, the large majority of the population is already living in cities. Outside the OECD, many cities are still growing rapidly. Policy makers in such fast growing cities have even greater responsibilities than their counterparts in mature cities. How cities are built today will shape how they look and function for a long- time into the future, thereby affecting generations to come. The Metropolitan Century helps to obtain a better understanding of urbanisation, and can serve as a tool to seize the opportunities provided by urbanisation. THE METROPOLITAN CENTURY © OECD 2015 4 – ACKNOWLEDGEMENTS Acknowledgements This report was prepared as part of the OECD “Urban Trends and Governance” project, which benefitted from financial support of the European Commission – DG Regional and Urban Policy. The opinions expressed and arguments employed herein do not necessarily reflect the views of the European Commission or the European Union. The work was carried out in the OECD Regional Development Policy Division directed by Joaquim Oliveira Martins. The report was supervised and co-ordinated by Rudiger Ahrend. It was drafted by Rudiger Ahrend (Chapters 2, 3 and 4), Alexander Lembcke (Chapter 3) and Abel Schumann (Chapters 1 and 2). Clara Brune provided substantial inputs to the third section of Chapter 3 and Boxes 1.2 and 2.7, and William Tompson contributed to Box 1. Valuable comments from David Bartolini, Lewis Dijkstra, Marc-Antoine Fayet, Daniela Glocker, Soo-Jin Kim, Karen Maguire, Joaquim Oliveira Martins, William Tompson and Raffaele Trapasso are gratefully acknowledged. The authors would also like to thank Emily Farchy, Catherine Gamper, Ioannis Kaplanis and Paolo Veneri for their contribution to OECD analysis, and Laurent Faucheux, Fabio Grazi and Henri Waisman for modelling analysis with the GEM-SE model that was undertaken in preparation of the report and Daniel Sanchez-Serra for support with OECD data. Last but not least, the report also benefited from comments from national delegates to the OECD Working Party on Urban Policy and the OECD Regional Development Policy Committee. Data for figures were kindly provided by Christopher Kaminker (Figure 0.1), Jane-Frances Kelly and the Grattan Institute (Figure 3.4), Tadashi Matsumoto and Christian Pollok (Figure 3.5), Lewis Dijkstra and Hugo Poelman (Figure 3.6), Nathaniel Baum-Snow and Ronni Pavan (Figure 3.11) and the DG Regional and Urban Policy of the European Commission (Figure 3.20). Ulrike Chaplar, Kate Lancaster and Gemma Nellies provided editorial assistance. Justin Kavanagh designed the cover image. Jennifer Allain prepared the manuscript for publication. THE METROPOLITAN CENTURY © OECD 2015 5 TABLE OF CONTENTS – Table of contents Acronyms and abbreviations ........................................................................................................ 9 Executive summary ...................................................................................................................... 11 Introduction: The century of urbanisation ................................................................................ 15 The century of urbanisation ........................................................................................................ 15 Cities and national economies .................................................................................................... 15 The importance of getting cities right ........................................................................................ 16 Notes .......................................................................................................................................... 16 Bibliography ............................................................................................................................... 17 Chapter 1 A short history of urbanisation ................................................................................. 19 Chapter Synopsis ........................................................................................................................ 20 The emergence of the first cities ................................................................................................ 21 Industrialisation and the first wave of urbanisation ................................................................... 23 Post-industrial urbanisation ........................................................................................................ 25 Developing countries and the second wave of urbanisation ...................................................... 27 The end of urbanisation .............................................................................................................. 30 Notes .......................................................................................................................................... 32 Bibliography ............................................................................................................................... 32 Chapter 2 The secrets of successful cities ................................................................................... 35 Chapter Synopsis ........................................................................................................................ 36 Introduction ................................................................................................................................ 37 What makes cities big? ............................................................................................................... 37 What makes cities rich? .............................................................................................................. 45 What makes cities function well? ............................................................................................... 55 Notes .......................................................................................................................................... 72 Bibliography ............................................................................................................................... 74 Chapter 3 How cities affect citizens, countries and the environment ...................................... 79 Chapter Synopsis ........................................................................................................................ 80 Are large cities good for their residents? .................................................................................... 81 Are large cities good for a country? ........................................................................................... 96 Are large cities good for our planet? ........................................................................................ 103 Notes ........................................................................................................................................ 108 Bibliography ............................................................................................................................. 111 THE METROPOLITAN CENTURY © OECD 2015 6 – TABLE OF CONTENTS Chapter 4 The cities of the 21st century ................................................................................... 117 Chapter Synopsis ...................................................................................................................... 118 The challenges of 21st century urbanisation ............................................................................ 119 Preparing the cities of the future .............................................................................................. 120 The political economy of the metropolitan century ................................................................. 122 Notes ........................................................................................................................................ 123 Bibliography ............................................................................................................................. 124 Annex A Glossary ....................................................................................................................... 125 Table Table 3.1. Urban amenities in Munich and Ingolstadt (Germany) .......................................... 90 Figures Figure 0.1. The rise of the megacity ......................................................................................... 16 Figure 1.1. Urbanisation and economic development .............................................................. 28 Figure 2.1. Population growth in China, 1997-2013 ................................................................ 38 Figure 2.2. Ratio of the population of the capital city of a country relative to the largest non-capital city ....................................................................................................... 41 Figure 2.3. Zipf’s law for Spanish cities ................................................................................... 42 Figure 2.4. Larger metropolitan areas are more productive, 2010............................................ 45 Figure 2.5. Productivity and city size: United Kingdom and United States ............................. 49 Figure 2.6. Productivity and city size: Germany and Mexico .................................................. 50 Figure 2.7. Less fragmented metropolitan areas have experienced higher growth................... 52 Figure 2.8. GDP growth by city: North and South America .................................................... 53 Figure 2.9. GDP growth by city: Japan/Korea.......................................................................... 53 Figure 2.10. GDP growth by city: Europe .................................................................................. 54 Figure 2.11. Decomposition of economic growth trends of metropolitan areas ......................... 54 Figure 2.12. Change in sprawl .................................................................................................... 59 Figure 2.13. Share of population satisfied with public transport provision ................................ 62 Figure 2.14. Trust and city size .................................................................................................. 69 Figure 3.1. Large cities have benefits and costs ....................................................................... 81 Figure 3.2. House prices in Paris, 2008 .................................................................................... 83 Figure 3.3. Time spent commuting (European Union and neighbouring countries) ................ 85 Figure 3.4. Urban morphology and public transport: Access to jobs in Sydney (Australia) .............................................................................................................. 87 Figure 3.5. Access to public transport in Daejeon (Korea) ...................................................... 88 Figure 3.6. Access to public transport and city size, 2011-14 .................................................. 89 Figure 3.7. Productivity and price levels in East and West Germany ...................................... 89 Figure 3.8. Global premature deaths from selected environmental risks, 2010-50 .................. 90 Figure 3.9. Annual average PM level in cities ....................................................................... 91 10 Figure 3.10. Pollution and health problems increase with city size ........................................... 92 Figure 3.11. Wage inequality in US cities of different sizes over time ...................................... 93 Figure 3.12. Urbanisation levels across OECD countries, 2012 ................................................ 97 Figure 3.13. Metropolitan areas’ contribution to national growth, 2000-10 .............................. 98 Figure 3.14. Concentration of patenting activity, 2008 .............................................................. 98 Figure 3.15. Distance to closest metropolitan area with more than 2 million inhabitants ........ 101 Figure 3.16. Economic growth increases with proximity to large cities .................................. 102 THE METROPOLITAN CENTURY © OECD 2015 7 TABLE OF CONTENTS – Figure 3.17. Population growth in rural regions and proximity to urban or intermediate regions, 2000-08 ................................................................................................... 103 Figure 3.18. The ecological footprint is highest in urban agglomerations ............................... 104 Figure 3.19. CO emissions from ground transport tend to fall as population density rises ..... 105 2 Figure 3.20. Per capita sealed soil in European cities .............................................................. 106 THE METROPOLITAN CENTURY © OECD 2015