In a megacity world , countries can be suburbs of cities .
26 | THE WORLD DEMANDS A NEW MAP
cluster , with a geographic footprint almost the size as Austria . Many of these megacity clusters have a GDP approaching US $ 2 trillion — that ’ s almost the same as that of India .
Of course , India is witnessing the rise of its own megacities in Mumbai and the Delhi Capital Region . Then , to the western side of Asia , Greater Tehran is absorbing one third of the Iranian population , while in the Middle East and North Africa , most of Egypt ’ s 80 million-plus people live in the corridor between Cairo and Alexandria , and a string of city states is forming in the Gulf . Heading into sub- Saharan Africa , the continent ’ s largest city and Nigeria ’ s commercial hub , Lagos , has plans for a rail network that will make it the anchor of a vast Atlantic coastal corridor , stretching across Benin , Togo and Ghana , to the Ivory Coast . In effect , these countries are suburbs of Lagos .
In a megacity world , countries can be suburbs of cities — a reality that companies with expansionary ambitions should keep in mind . In such a world , corporate growth strategies should focus on megacities and the clusters they form , rather than on national borders , which promise to become increasingly obsolete as connectivity reshapes the way we do business .
4 . Megacity Tiers
Tokyo is not the same as Lagos and Dubai is not the same as Lahore . Megacities fall into multiple tiers , with different business opportunities emerging at each level .
There are tiers within the 50 megacities that I am envisioning . The first tier includes the six most connected cities : New York and London , Tokyo and Hong Kong , Singapore and Dubai . With Singapore very much a first-world country today , Dubai is really the first new emerging market city to make it onto that list . The second tier cities are also highly connected , they just don ’ t have the highest degree of infrastructure quality . This is where cities such as Istanbul , Sao Paolo , Mexico City and Mumbai fit into the picture . Then you have a third tier , which
In a megacity world , countries can be suburbs of cities .
includes cities that are more regional and not all that developed , such as Cairo , Manila and Jakarta . Finally , there is a fourth tier that includes Lagos as well as cities like Karachi . These are megacities but they ’ re backwaters .
In the corporate context , different benefits exist at different levels . Top tier cities offer the highest standards of infrastructure and connectivity , and can potentially open the door to global opportunity . However , these cities can be unforgiving or even prohibiting towards small firms or newcomers . Companies seeking to succeed in tier one cities therefore , must have what it takes to survive at the top , and must be able to live up to the requirements and standards demanded by the world ’ s most connected cities .
For their part , second and third tier cities may be less connected and more regional in their influence , but they offer clear opportunities for infrastructure development projects as well as greater flexibility and , potentially , greater rewards . Operating in such cities , however , often requires more in-depth local knowledge and issues such as corruption and geopolitical uncertainty can be more pronounced .
5 . Competition
Megacities don ’ t compete , they collaborate . Connectivity between cities is a positive sum game with cooperation evident amongst the top global players . Dubai , for instance , is not supposed to be replacing London or Singapore . The fact is , all three reap the mutual benefits of greater connectivity with each other .
Still on the topic of Dubai , consider where the foreign investment is coming from . It ’ s coming from the emirate ’ s peers in top tier global cities . So , to join that league is not to compete , it ’ s to share with them .
Cities also see value in collaboration because they want to be part of global value chains and they thrive on the flows of people , finance and technology that drive them . The Gauteng province of South Africa , is a case in point . The province that contains Johannesburg and the capital , Pretoria , represents just over a third of South Africa ’ s GDP and is home to the offices of almost every multinational corporation that invests directly into South Africa or , indeed , the entire African continent .
The collaborative nature of megacities means that doing business in just one of them can open the door to many more world-wide . For example , an emerging market company hoping to eventually crack the US market might find it advantageous to start from a new megacity such as Dubai .
6 . Investing
Funding the development of secondtier cities would create more even distribution of people and resources , and create more opportunities for business and economic growth .
Countries need to start plowing much more investment into second-tier cities . By doing so , they can dissipate populations , create more centers of growth , more centers of industry and commerce , and a more distributed economic pattern . That is essential . Think of a country as large as Indonesia , despite having 14,000 islands , the entire economy is based on one city , on one of the smallest islands . That ’ s not a sustainable , long-term proposition . Moreover , it creates significant vulnerabilities – what if something happens to that city ? The number one priority for countries that find themselves »
EMERGING MARKETS BUSINESS FIRST QUARTER 2017 ISSUE NO . 2