Urbanization is progressing faster: City challenges

Urbanization of Shanghai 2020

Greater Shanghai could in theory contain more than 170 million inhabitants by 2020.

The urbanization is going on. By 2030, two-third of the population will live in megacities or even gigacities.

Most of these urban areas will be located in the developed countries of Northern America (82 % of total population), Latin America and the Caribbean (80 %) as well as Europe (73 %). While vast parts of Africa and Asia are still mostly rural, their cities are among the fastest growing in the world.

Shanghai as big as Germany

An increasing number of urban areas are exceeding 10 million inhabitants. We call them megacities. Urbanisation is progressing ever faster. A new category of urban agglomeration has emerged: gigacities. These would be supercities of more than 50 million inhabitants, an almost unimaginable number. And yet gigacities may soon become reality in China. The Chinese government is reportedly planning to connect multiple cities in five integrated urban conurbations which would together be home to half a billion people by 2020. If these ambitious plans are realized, there will be four urban areas in China each with more inhabitants than the whole of Germany. Greater Shanghai could in theory contain more than 170 million inhabitants by 2020.

Urbanization challenges

This extreme concentration of people is causing big challenges, particularly in the area of sustainable development. According to the UN, the world’s cities only cover 2 % of global land area, but they account for 70 % of greenhouse-gas emissions.

  • How do we find the right balance between growth, quality of life and climate protection?
  • What does a city of the future have to look like in order to make life worth living in it?

There’s not a one-size-fits-all answer to it, but many smart ideas and approaches to the most pressing challenges in the field of demography and mobility.


The key for the city of the future lies in its compactness and its mobility. Building better connected, more compact cities based on mass public transport can save over $3 trillion in investment costs over the next 15 years. These measures will improve economic performance and reduce emissions, raising the quality of life.

“The ideal city is one that consists of multiple selfcontained centers,” says climate expert Thomas Liesch from Allianz Climate Solutions. He is a fan of short distances. His idea is that “in the city of the future, people would work and live in their respective districts, thus saving a great deal of time and energy, and reducing traffic density. Fewer cars would mean more space for pedestrians, while a network of green spaces would connect the individual neighborhoods. Not only would this improve the climate, but it would also allow more space for leisure activities and food production.”

Although it doesn’t count as a megacity, many experts consider Singapore to be a prime example of the ideal city, also in terms of compactness. The Interlace project saw the creation of a vertical village in the city: apartment blocks were stacked on top of one another rather than being built side-by-side, with roof gardens, playgrounds and courtyards included in the development.
In other locations, projects such as the High Line Park in New York, the congestion charge in London, or the public rental system for electric cars in Paris, seem to suggest that the human race is slowly getting to grips with the traffic issue, and increasingly using the reclaimed living space for its own well-being.

Automated cars could have taken over on the roads by 2030, according to experts. In theory, these automated cars could simply drop their passengers off at their desired location and then leave the city boundaries until they are summoned again via an App, just like taxis. This would be a huge gain for city residents, who are all plagued by large volumes of

It’s all connected to the grid

  • Electric cars would help reduce emissions and noise levels
  • Wireless driverless cars and buses can charge wirelessly through streets connected to smart grid
  • Maglev subway trains (high-speed systems) use magnets to levitate and propel subway cars
  • Ordered small packages can be delivered with drones

Data rules

The nervous system of tomorrow’s intelligent city is based on the Internet: electricity, transport, supply and disposal systems are electronically linked. Buildings produce their own electricity and store it in powerful battery storage devices for example. This results in a decentralized energy-generation and storage system, which will also mitigate the impact of power outages if push comes to shove. Traffic control systems respond to real-time data, reduce traffic and redirect it. The workplace and the home merge. Supply chains are optimized.

The necessary infrastructure requires secure support. The insurance industry’s role is to protect people, property and systems alike – regardless of their complexity and size. By pushing the boundaries of insurability, the (re)insurance business can make an effective contribution to the development of megacities. In this way, the insurance industry is a powerful tool to strengthen the resilience of local and national economies and societies at large.

More urbanization to come

More than 12% of global city dwellers live in the 29 megacities existing in 2015. That is more than 470 million people.9 Tokyo (38 million), Delhi (25.7 million) and Shanghai (23.7 million) are the largest ones. They will remain so up to 2030, by which time 12 new megacities will have emerged, 10 of them in Asia or Africa. Delhi, Dhaka, and Lagos will each have added around 10 million inhabitants – the equivalent of another megacity. African and Asian megacities are the fastest growing metropolises: Delhi, Dhaka and Lagos will grow by 10 million inhabitants each. “Right now, the growth of megacities is largely an Asian phenomenon, with six of the 10 most populous cities located in the region.


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