Two Scenarios: The Urban World in 2025

Trend Scenario’

‘Bending the Trend’

Basic Trends

Basic Policy Shift

Deficiencies in knowledge, savings/investment, and production, and the needs of hypergrowth cities dominate all political activities.

Economizing scarce resources, using them most effectively for priority needs, plus reduced population growth provide the key to a more socially- and environmentally-balanced scenario.

Demography

Demography

Large numbers of young families: a demographic bomb. Though better social security can reduce the need to have large families for protection against poverty in old age, high birth rates continue because of sexual ignorance, superstition, poorly educated women. Reducing urban population growth particularly difficult in India, which overtakes China to become the world's most populous country.

As AIDS spreads, the race intensifies for an effective low-cost treatment for the developing world

Continued migration to cities. Tripling of urban populations by 2025.

For most Sub-Saharan Africa: rapid spread of AIDS among young adult males and females; big loss of young working population and growth of a dependent orphan population.

More radical education policies, and more aggressive policies to reduce birth rates, reduce the population pressure. Most effective: female education, with postponement of childbearing. Governments and international agencies agree with drug companies to support a major programme for an effective low-cost AIDS treatment, providing a model for a more general attack on health problems.

Economy

Economy

Immigration of low-skilled labour, plus high birth rates, produce long-term surplus of unskilled labour, which reduces income growth and creates huge inequalities. The informal sector remains much too self-sufficient and separate, as access to loans or input markets is weak. Division of labour makes only slow progress. Hard to increase infrastructure per head or provide adequate jobs or homes or school places (thus a human capital problem); survival problems of the young generation overpower all other considerations.

Poor people double in number; women form the majority of the poorest. Life expectancy and literacy rates increase, but economic opportunities for women remain limited, especially for female-headed households (more than 30 per cent of low-income population).

Struggle for survival in informal economies, local systems of exchange, with little or no outside contact.

The formal sector, still relatively unproductive, struggles to compete on external markets. Under-education, bottlenecks in infrastructure, unstable input and credit markets result in higher risks, quality and delivery problems. Integration into global markets remains weak.

Intensified international cooperation, plus adjustment to the needs of the modern industrial sector, allow faster growth and more foreign direct investment. In some cities, productivity growth in advanced manufacturing brings a sharp increase in average income, but further threatens the livelihoods of those in the informal economy. Continued growth of the informal sector becomes a major issue. Complex strategies – decentralized urban management, training, better cooperation between formal and informal sector – improve growth expectations outside the formal sector. Cities develop effective policies to help formalize the informal economy: strengthening relationships to the mainstream city on input and output markets (microcredit, building materials, food, water, transportation). Communal self-help neighbourhood projects, backed by informal levies to pay for materials, help to overcome bottlenecks in infrastructure.

Microcredit networks play a key role in developing the informal sector. These networks increase rapidly. Poor women benefit most of all.

In some cities, schemes (supported by international agencies) expand mass education, especially for teachers, through cheap information technology. Schools in poor areas are comprehensively networked; teacher-tutors manage the work programme and supervise progress. This brings dramatic improvement: reductions in illiteracy, plus increased numbers obtaining secondary educational qualifications and continuing to further or higher education.

Thus, cities attract foreign direct investment, offering a well-educated labour force at competitive wages. Employment in the formal industrial sector increases sharply; the low-paid informal economy shrinks and increasingly diversifies into an intermediate sector, with some characteristics of both the formal and informal economies. This becomes increasingly integrated with the formal public sector and the globalized trading sector – either directly (for instance by sub-contracting) or indirectly (for instance by performing services for workers in the modern traded sector).

Society

Society

Informalized urbanization: cities grow without a formal economic base; rising rates of crime and violence.

Most cities formulate and execute more effective policies to improve informal housing, developing informal cooperative assistance policies. International agencies play a role at the start, but cities become more self-reliant. Basic assumption: informal populations are creative, energetic and enthusiastic to improve their housing environment. Key: simple, low-cost planning of upgradable development concepts, through help to local leaders to organize neighbourhood cooperative movements.

Most people live in the informal society. Informal sprawl is the dominant solution for neighbourhoods. As the formal city grows too, cities become even more fragmented and incoherent: informal housing areas explode out of control, next to formal or even luxury housing.

Housing/Infrastructure

Housing/Infrastructure

Infrastructure and services reach capacity, with increasing needs for housing, sanitation, water supply, waste treatment facilities, and transportation. The poor pay more. But even under conditions of extreme poverty, the value of housing and infrastructure in the older more stable informal settlements grows slowly. Most cities accept the need to stabilize the legal position of informal owners. Techniques of cooperation and organized self-help slowly improve through learning by doing.

Private provision of water and sanitation becomes a growth sector, promoted by international institutions and wide spread imitation of best practice. Key: private provision of infrastructure in the formal city, market solutions for trunk sewers, water mains, main high-tension lines, plus detailed solutions for self-help cooperation in informal neighbourhoods.

Time lags for public sector innovations shorten, through intensive efforts to spread information and experience. The information age becomes an age of faster diffusion of successful or best practice.

Environment

Environment

Struggle for survival forces inefficient use of natural resources to produce basic goods, from housing to food; overuse and neglect of the natural environment. Little concern for future generations. In stabilized areas, slow improvement of water or even waste treatment. But later generations of new informal settlements start in substandard conditions, with little or no outside help.

Better education produces changed priorities: environmental goods and health become higher priorities. Progress in combating air pollution through availability of low-emission vehicles, better emission control of old cars and better waste treatment. Key: improvements through tight cooperation between city-wide task forces and neighbourhood groups, assisting these to become more effective. High growth, a negative factor earlier, now becomes a key driving force for more sustainable development and an opportunity, as growing pollution, traffic congestion, urban sprawl and health risks mobilize popular energies to reduce risks and to improve living conditions. Policies to reduce pollution and improve waste water treatment gain from scale economies across an entire urban area.

Transport

Transport

Poor city dwellers remain dependent on walking; as cities grow, this drastically reduces their capacity to participate in urban labour markets and to access services, and they remain effectively trapped inside their own informal neighbourhoods.

National policies encourage bicycles as a major means of mobility and access for the urban poor. Cities contract with private contractors to develop low-cost bus services on major urban corridors, with informal para-transit services filling the gaps.

Urban Form

Urban Form

A chaotic series of informal settlements, at the margin of survival both economically and environmentally. Permanent threat of catastrophe. Fragmented appearance and fragmented growth creates an image of chaos and disorder, which is only slowly attenuated.

The formal city develops rapidly, but informal areas still dominate many areas. Cities remain fragmented and incoherent, but begin to grow together through upgrading and better integration between sectors.

The City Coping with Dynamism

The City Coping with Dynamism

Trend Scenario’

‘Bending the Trend’

Basic Trends

Basic Policy Shift

Rising productivity produces rising standards and widening possibilities of coping with problems, but also introduces new challenges of sustainability.

These are true learning cities, extremely successful in using international experience and knowledge, and increasingly moving themselves to the forefront of sustainable development.

Demography

Demography

Despite large numbers of young people, birth rates fall sharply through urbanization. Contraceptive knowledge spreads and the economic value of children declines, as costs of education and living increase faster than income. More intensive child care and education increase the quality of human capital.

A workforce bulge: the ratio of working-age to non-working people rises, contributing to economic growth. But later, as large groups born in the 1950s and 1960s retire, they place a burden on smaller numbers of working-age people. However, the proportions of old people remain relatively low in most cities.

Policies to encourage lower birth rates, especially through education for women, have run their course. But an emerging concern about the implications of ageing in 20-30 years’ time.

But problems are much smaller than in mature ageing cities -especially as expansion of elaborate pension systems is mostly avoided: individual savings form the basis of most pension systems, thus savings rates are higher than in most high-income ageing cities. Private pension systems create incentives for later retirement. Together with more efficient education, this increases the working life, thus reducing the burden of ageing.

Economy

Economy

A dual economy: wealthy formal-sector cities and informal neighbourhoods. Problem of the modern sector: threat of deindustrialization, as capital moves to lower-income cities. Progressive formalization of the informal sector.

Nearly all middle-income cities, particularly in Eastern Asia, resume growth, though not at same speed. Many more join Singapore and Hong Kong as fully-developed economies; others – particularly in Chinese coastal provinces – join the middle-income category.

Manufacturing moves into more capital- and knowledge-intensive production. Major cities turn increasingly to advanced services.

Flexible, skilled workforces attract inward investment and encourage locally-based innovation. Cheaper access to education becomes highly relevant, building on students’ and parents’ motivation, and helps reduce inequality -especially in Latin American and Caribbean cities. Some possible negative impact on declining or segregated neighbourhoods – but even here, information technology can bring an educational revolution.

Society

Society

Larger cities continue to attract migrants, and decentralize through peripheral growth, often far from the centre, through both formal housing for higher-income groups and informal occupation by the poor. Rapid growth of a new education-oriented middle class. More mixture of formal and informal settlements, sometimes with resulting social tensions. Growth of polycentric mega-city regions, with up to 20-30 million people, and a networked division of labour: advanced services in the central city, more routine services and manufacturing, in the periphery.

In some cities (especially Latin America) social movements organize land occupations, and sometimes provide social order. Danger of polarization between the formal and informal city.

Economic transformation improves the position of many workers, who begin to receive regular earnings and to care about their children's education. Promotion of small businesses and a better business environment strengthen middle-class values; the middle class expands and formalizes informal neighbourhoods.

Housing/Infrastructure

Housing/Infrastructure

Numbers and sometimes proportions in informal housing developments continue to rise, often in risky and unsustainable sites, far from employment or services, and having no or minimal infrastructure, therefore presenting health and environmental hazards.

With fragmented local administration, pressure comes from the neighbourhoods, for more effective local self-help, and from the region, for more integrated metropolitan government and revenue-sharing. (Some resistance from entrenched central powers, gradually overcome). Result: a two-level solution, with metropolitan government for infrastructure provision and basic service delivery, and neighbourhood councils to mobilize local human resources, making best use of limited funds. People in informal neighbourhoods create local organizations to manage their local environment and urban needs. Model schemes for upgrading of informal housing, based on local self-management, and local taxes spent according to local political decisions, spread rapidly through emulation. These areas progressively become middle-class suburbs.

Environment

Environment

Urban plus economic development results in higher income, generating more traffic, more and more space demands, increases in heating or cooling energy, and increased pollution. In poorer areas, industrial plants continue to produce toxic emissions and wastes in the early phases; little or no attempt to control emissions. Later, political support for environmental strategies.

Dispersion of homes and jobs in the largest cities brings growth of low-density areas, increasing pollution and energy consumption through reliance on the private car: very rapid growth of car ownership and use. World oil production peaks around 2010, as consumption begins to rise more rapidly because of growth in car ownership and use, leading to a sudden and dramatic increase in world oil prices – a third global energy crisis, recalling those of the 1970s. Increasing evidence of global warming, with major floods in low-lying areas, especially in Asia, impinging on informal urban settlements.

New challenges produce new policies: some cities develop imaginative solutions to their problems, with programmes for recycling, good quality public transport, and encouragement of sustainable urban development. They emerge as Best Practice cities with a worldwide reputation for urban innovation. Combined heat and power supply through cogeneration, reduced private traffic through efficient and comfortable public transport, efficient supply of food and consumer goods, better environmental education, all set in a paradigm of the ‘learning city’, serve as an example for others to follow.

Transportation

Transportation

Rapid income growth feeds rapid growth of demand for cars in most cities. High-density inner city areas limit street widening or new construction, even for cities growing in wealth and tax revenue. Thus, a transportation crisis: public transportation is only a partial solution, as the exodus of jobs and people into low-density areas makes increasing numbers of households car-dependent. Prime illustration of the sustainable development paradox: unless economic growth all too easily produces negative outcomes, such as pollution.

Infrastructure investment falls behind: particularly, rail and sub-way systems are poor. High dependence on bus service, often poor-quality. Thus, high car dependence (much higher in relation to income than in mature cities), with crisis as fuel prices escalate. Deconcentration of people and jobs exacerbates this process. Serious traffic congestion, traffic-based pollution, very long journeys to work.

Cities develop a sophisticated urban competence to solve ever-growing transportation problems and related tasks of managing urban growth, as international contacts grow and best-practice knowledge spreads rapidly. Solutions from Singapore, Hong Kong and Curitiba are quickly exported. Best Practice cities package their sophisticated solutions (price rationing of access to cars, electronic pricing, incentives to share cars, electronic hitch-hiking) for export to other cities, producing a worldwide export service which revolutionizes urban traffic. But a continuing problem in car-dependent peripheral areas, only resolvable by development of the supercar based on fuel-cell technology, plus a superbus version offering rail-quality service at low cost.

Urban Form – Two Alternative Forms

Urban Form

Explosive Growth in Eastern Asia: growth diffuses from larger into smaller cities nearby, networked into mega-city regions or extended urban regions, with 10-30 million people.

The Contradictions of Latin America and the Caribbean: Highly unequal distribution of income results in a dual urban economy and a highly segregated urban social structure: luxury apartments and elegant high-rise office and hotel towers in the city centres, huge shanty-towns on the outskirts. Very rapid increase in car ownership and use, bolstered by low car-driving costs, which aids urban dispersal. Little possibility of compensating by new metro construction. Often, extreme negative consequences of scale and rate of growth: serious traffic congestion, traffic-based pollution and very long journeys to work, erratic and unequal distribution of basic services.

These cities vary: some have high densities and highly-developed mass transit, some are fuel-intensive, more polluting, urban-sprawl type cities. But a general trend towards higher densities and to support public transport, especially for those lacking access to cars (the poor, the young, the handicapped). This does not usually mean metro construction, which is expensive and limited in impact; efficient bus systems and segregated bicycle lanes prove more cost-effective in many cases.

The high-density East Asian city appears more sustainable, but cannot simply be exported as a solution to the sprawling low-density metropolitan areas of Latin America and the Caribbean.

Medium-sized cities, with up to one million people, show extremely high and accelerating growth rates. They relieve pressure on the larger cities. But they too may suffer poor environment, particularly as some fail to develop administrative capacity or fiscal autonomy to handle the consequences of rapid growth.

The Weakening Mature City Coping with Ageing

The Weakening Mature City, Coping with Ageing

Trend Scenario’

‘Bending the Trend’

Basic Trends

Basic Policy Shift

Wealthy cities: most people highly-educated, though poverty has not been overcome; almost all are mature democracies, with good administration and a strong tax base. Problem of layers of vested interests. Therefore, politically slow-motion cities with difficulties in adjusting to the needs of an ageing population.

Enlightened Self-Interest as Driving Force: Ageing is a slow process, so easy to forecast and thus to influence. Some cities manage to escape from over-protective, over-consensus-oriented politics and to grasp necessary radical cures, by: ▪

Reform of the taxation and pension system, to reduce the burden of income taxes and social security taxes;

Deregulated markets, intensifying competition and reforming the public sector combine to increase efficiency;

Reducing collectively-funded pension entitlements, thus increasing private savings;

More funded pensions to increase lifetime savings and lifetime work through later retirement – which also increases incentives for life-long learning;

High costs of unemployed immigrants, plus the need for highly-skilled workers, lead to increased efforts for better integration of immigrants;

Promotion of informal self-help among the old, to reduce dependency on formal service organizations.

Demography

Demography

Central problem of declining city populations, with birth rates as low as 13 or 14 per thousand in European cities. American variant with higher birth rates and immigration rates.

Declining populations bring lower education costs, but increasing social security obligations because of rising numbers of old people (including very old people). Shortages of capital, because savings ratios of older people are low. Increases in capital intensity will slow, making it more difficult to increase labour productivity. Human capital will age. Without radical changes in behaviour, growing productivity risks.

Mature cities tend to be unfriendly environments for young families. Therefore low numbers of children and high numbers of working women. Reduced capacity of the family to provide services for the elderly. Need for expensive professional services grows rapidly if no new informal solutions arise.

Growing costs of the welfare state. Political tension between the younger population and the older longer-settled populations.

Birth rates can be increased, as Swedish or Finnish cities have demonstrated. But a more family-friendly environment will produce results only after 25 years – too late to influence this scenario.

Cities seek to rejuvenate themselves through immigration of well-qualified young people, especially those with key skills (e.g. health personnel). But, given high unemployment rates among foreigners, to be effective the shift must be radical. Restrictions on double passports or naturalization disappear. Schools take on new responsibilities. Labour markets become more accessible. Universities attract more foreigners in order to integrate them and forestall the formation of a ghetto underclass. Skill structures are improved; multi-ethnic and multi-cultural cities become more common.

Mature countries modify their retirement policies. At first this has little effect. But around 2025, new cohorts of retirees arrive who are not so generously funded, and have to rely much more on individual savings. These help overcome the capital shortage and also increase the incentive to work longer and to learn longer. Taxes on income will be lower and less progressive.

Experiments with cooperative living schemes where the young old begin to care for the old old are gradually transformed into a mass movement.

Economy

Economy

The shift to service industries, especially human services, continues in localizing labour markets, but is limited by price increases. Good quality services become a luxury.

An ageing workforce proves advantageous in complex work such as that of lawyers, bankers or high-level consultants, but lags behind in many other fields -especially high technology – where technical knowledge or analytical methods are based on new knowledge.

Mature cities rely on long-accumulated depreciating investment in the built environment. With declining population and employment, it proves difficult to maintain extended capital-intensive and maintenance-intensive infrastructure (sub-ways, sewer systems). Immobile ageing people consume more space per head; population densities decline. Economic contraction reduces demand for office space and even more so for factory space, creating problems for real estate markets. Thus, refurbishment instead of new construction, and fewer spectacular architectural projects.

Interrelated strategies to overcome the burden of ageing will have drastic consequences for labour markets: ▪

Through higher incentives to work, producing a smaller gap between gross and net income;

Through larger labour supplies because of a longer working life;

Through lifelong learning and integration of learning into the work process;

Through reduced prices of services as a consequence of lower taxes on income.

Better-functioning labour markets make cities more attractive for outside and local investors. Investment is higher, capital intensity increases, bringing higher productivity, higher income and a broader tax base – positive shock waves through the economic system.

The changes profit the city budget. Social spending on the unemployed and the elderly becomes much lower; the total budget is higher. So spending on infrastructure, promotion of economic development, training or housing can increase.

Society

Society

Unemployment does not automatically disappear as labour supply declines, because of the continuing mismatch between demand for high-skilled workers and supply of under-educated workers. Unemployment concentrates in low-quality inner-city areas, increasingly isolated from mainstream society. The affluent move out to safer, more attractive areas, where social disruption risk is lower. Growing geographical and social division, with a semipermanent educational underclass: widening gap between educational standards in affluent areas and in deprived areas where truancy and exclusion are common. Unemployed and low-income groups are increasingly aware of their plight, and vent their frustration against the affluent. More deprived young adults take to hard drugs, becoming permanently detached from regular employment and social aspirations.

High crime levels, with major increases in burglary, car theft, assault and drug-related crimes; streets in deprived areas become no-go areas. Urban riots and disturbances become regular occurrences.

Increasingly, old age again means poverty for those unable to save. Old people will again become dependent on their families, who may be reluctant to shoulder the burden.

Traditionally, an ageing population tended to generate greater inequality, structural unemployment and low growth. But now, more intense international competitiveness produces new, more flexible economic behaviour, higher productivity growth and improved competitiveness. Key instruments: education and learning together with incentives to higher savings, longer working life, and more intensive integrative measures for immigrants, combined in a complex strategy. More people participate in public-private partnership projects and cooperative efforts in supportive neighbourhoods. Targeting of funds on schools in poor areas greatly reduces educational disparities, so inner-urban areas begin to lose their stigma, and a new generation of middle-class professionals seizes the opportunity to buy subsidized housing at very advantageous prices. The shortage of young people increases the willingness to invest in each individual, to develop human capital to protect and develop high standards of living, especially for growing numbers of ageing people.

Radically new habits evolve, as the family cannot fulfil its traditional function of providing informal services, especially health care services. New informal relations among neighbours and networks of self-help groups slowly provide a substitute, overcoming traditional attitudes and behaviour patterns.

Environment

Environment

Mature cities have the highest consumption of energy, water, space per head, and materials, and thus need to be at the forefront – first in energy savings, later as the prime movers in the transition into a new energy age. But political inertia intervenes. The ecological footprint continues to increase until 2015, continuing to override technological advances which secure reductions in resource use.

Cities aiming to become more healthy and more attractive will become active pressure groups for emission-free cars, since they will suffer most from smog and air pollution. In a decentralized world of powerful cities, transformation of urban transportation is quite quickly achieved. New large-scale traffic management systems -incorporating road pricing, new logistical systems with strong incentives for high-occupancy cars, more efficient delivery to businesses – increase street capacity and traffic speeds, simply through more efficient use of each vehicle. Mature cities catch up with the advanced traffic management systems of pioneers like Singapore and Hong Kong.

Increasing budgets allow cities to improve infrastructure and provide more attractive environments for (new) companies and inhabitants.

Prices are used to economize the use of water, electricity and heating and cooling energy. Cities cooperate with industrial companies to launch large-scale recycling efforts for industrial waste and household waste.

High prices for fossil fuels and atomic power help generate an energy revolution – the transition to the solar energy/hydrogen age -which allows more decentralized independent energy production. Buildings are transformed by a new wave of energy modernization, including a transition to smart buildings where sensors and computers will control optimum use and production of energy, allowing a more efficient and comfortable use.

Urban Form

Urban Form

Despite low population growth, the growth of smaller households, coupled with rising living standards for some, and the inertia of old people who remain in their housing, produces further pressures for deconcentration of people and activities. These meet NIMBY policies in neighbouring rural authorities, which paradoxically divert pressures farther out. But ageing may reduce Nimbyism: demands from the aged will bring an influx of younger people, especially families, who need cheap land and housing. As young people become scarcer, their needs become a priority for many cities and suburbs, and among these will be a greater supply of land for housing.

The growth in numbers of retirees, and their relative wealth, helps produce growth of smaller towns in rural and coastal resort areas, sometimes far from the retirees’ former homes (e.g. southern France, southern Spain, Florida, southern California). An ageing city needs more space per head than the city of today with a younger population.

Mature cities are not and will not be homogeneous. They can be subdivided into:

Spatial growth is higher than in the ‘Business as Usual’ scenario, as people are wealthier and able to afford more housing. There are more jobs, so demand for office space grows. More flexible markets aid adjustment of housing consumption to meet changing needs. Cities and neighbourhoods work together to develop ways of adapting homogeneous housing stocks, designed for families, to the needs of an ageing population. Mobility within neighbourhoods is encouraged, allowing older people to move into more convenient smaller houses or apartments; empty sites are used for infill housing. Thus, different generations can live together in the same neighbourhoods: the precondition for mutual aid among generations, which is the essential basis for reduced dependency on market services or communal services for old people. These flexible three-generation neighbourhoods will use less capital and less space than segregated housing areas. Reinventing the car and reinventing energy will give households greater freedom to select locations according to individual preferences.

A European-type high-density city, with well-functioning systems of planning controls enforcing minimum densities which control the tendencies of markets to overuse space in low-density developments and by green belts and other areas prohibited from building.

An American-type sprawling city, with densities so low that in part public transport disappears. This may experience extreme difficulty as more very old people demand personal services which cannot be provided efficiently under conditions of low-density sprawl and decreasing numbers of people per individual family home.

Many European-style mature cities are physically well-maintained, but some lose population from older inner areas, compensated by partial regeneration close to the centre. In problematic cases, this results in widespread abandonment. But smaller cities and towns continue to grow rapidly, fuelled by their roles as local service centres (health, education), and as incubators of innovative small firms.

Cities use their planning powers to combat market trends towards lower densities and more car-oriented living, especially shopping; cities retain their traditional medium-density urban form. Protection of urban heritage becomes a priority: irreplaceable buildings, squares or ensembles of buildings are seen as having great value. Dynamic but historic cities, driven by enlightened self-interest and by emotional ties to their own past, compete to demonstrate the successful incorporation of their heritage into their present-day structures.