The Future of Cities: Part 2

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17 Jul 2023

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In the first part of this article series on the future of cities, we introduced some of the key concepts and frameworks that can help us to understand and envision the future of cities based on existing research and evidence.

We discussed:

The drivers of change that affect the future of cities
The dimensions of urban futures that capture the complexity and diversity of cities
The principles of informed preparedness that guide the future-oriented actions of cities

If you haven’t read the first part yet, you can find it here:
The Future of Cities: Part 1

In this second part of the series, we will explore some of the specific trends, opportunities, and scenarios that shape the future of cities in different domains, such as economy, society, environment, and technology.

The Future of Cities: Economy

The economy is one of the most important aspects of urban life, as it determines the livelihoods, opportunities, and well-being of urban dwellers. The economy is also one of the most dynamic and uncertain aspects of urban life, as it is influenced by various factors, such as globalization, digitalization, innovation, inequality, etc.

How will the economy of cities evolve in the future? What are some of the challenges and opportunities that cities will face in terms of economic development? What are some of the scenarios or options that cities can pursue to achieve more prosperous, inclusive, and sustainable economies?

According to UN-Habitat, some of the key trends that will shape the future of cities’ economy are:

The rise of knowledge-based and creative economies: Cities will increasingly rely on human capital, innovation, and culture as sources of economic growth and competitiveness. Knowledge-based and creative industries, such as information technology, biotechnology, media, arts, etc., will generate more value-added and high-skilled jobs for urban workers. Cities will also invest more in education, research, and development to foster a culture of learning and creativity among their citizens.
The diversification and specialization of urban economies: Cities will seek to diversify their economic base and avoid over-dependence on a single sector or activity. Diversification will enhance the resilience and adaptability of cities to external shocks and changes. At the same time, cities will also seek to specialize in certain niches or sectors that match their comparative advantages and local assets. Specialization will enhance the efficiency and productivity of cities and create more distinctive identities and brands for them.
The digitalization and automation of urban economies: Cities will embrace digital technologies and artificial intelligence as enablers of economic transformation and innovation. Digitalization will improve the connectivity and accessibility of cities to global markets and networks. Automation will improve the quality and speed of production and service delivery in cities. However, digitalization and automation will also pose challenges for cities in terms of digital divide, cybersecurity, and job displacement.
The localization and circularization of urban economies: Cities will adopt more localized and circular models of production and consumption that reduce their ecological footprint and enhance their social cohesion. Localization will promote more self-reliance and community empowerment among urban dwellers by strengthening local supply chains, markets, and networks. Circularization will promote more resource efficiency and waste reduction among urban dwellers by encouraging reuse, recycling, and regeneration.

Based on these trends, UN-Habitat proposes four scenarios or options for the future of cities’ economy:

The business-as-usual scenario: Cities continue to follow conventional models of economic development that prioritize growth over sustainability and equity. Cities compete with each other for global capital and talent but neglect local needs and assets. Cities are vulnerable to external shocks and changes and face increasing social and environmental problems.
The smart city scenario: Cities leverage digital technologies and artificial intelligence to optimize their economic performance and innovation. Cities are connected and integrated with global networks and platforms but lose their local identity and diversity. Cities are efficient and productive but face digital divide, cybersecurity, and job displacement issues.
The green city scenario: Cities adopt localized and circular models of production and consumption that minimize their ecological footprint and maximize their social cohesion. Cities are self-reliant and empowered by strengthening local supply chains, markets, and networks. Cities are resource-efficient and waste-free but face trade-offs between localization and globalization, as well as between circularity and innovation.
The inclusive city scenario: Cities pursue diversified and specialized models of economic development that balance growth, sustainability, and equity. Cities are resilient and adaptable by enhancing their economic base and comparative advantages. Cities are prosperous and inclusive by investing in human capital, innovation, and culture.

Conclusion

In this second part of the article series on the future of cities, we have explored some of the specific trends, opportunities, and scenarios that shape the future of cities in the domain of economy. We have discussed:

The rise of knowledge-based and creative economies
The diversification and specialization of urban economies
The digitalization and automation of urban economies
The localization and circularization of urban economies

In the next part of the series, we will explore some of the specific trends, opportunities, and scenarios that shape the future of cities in the domain of society.

I hope you enjoyed reading this article and learned something new about the future of cities. I also invite you to share your thoughts and opinions on this topic with us.

Question for you:

What are some of the economic challenges and opportunities that your city is facing or will face in the future? How do you think your city can achieve a more prosperous, inclusive, and sustainable economy? Which scenario or option do you prefer for the future of your city’s economy?