SHRINKING CITIES

Rapid and relentless urbanisation has been a key pillar of human progress and development during the last several decades. But, as we go into the next decade, can all cities participate and draw benefits of the phenomenon equitably? While the past has seen cities growing both in terms of population and spread, will the trend continue? Will the ‘Leader’ cities of today continue to grow and prosper? Or will new cities take up the leadership?

Difficult to say, it seems. According to a report by McKinsey Global Institute, 17 percent of large cities in the developing world are likely to see declining populations between 2015 and 2025. For the world as a whole, 8 percent of cities will experience decline. In the past, population growth has largely driven economic prosperity in large cities. 58 percent of the GDP growth among large cities between 2000 and 2012 happened due to population growth according to the McKinsey report Urban World: Meeting the demographic challenges. The remaining 42 percent was caused by rising per capita income.
While this trend of declining populations in cities is likely to remain pronounced in the case of the developed regions of the world, it may affect developing region cities only in later years. In the meanwhile, these cities will continue to experience growth. Take for example the case of Delhi and Tokyo. As per UN’sWorld Cities in 2018 report, between 2018 and 2030, the population of Delhi is expected to increase by over 10 million while that of Tokyo would go down by about 0.9 million. The two cities would interchange places at the top of the world’s most populated cities. Another Japanese city Osaka, now in the top ten will drop off the list in 2030 with its population dropping by about 0.6 million. The same UN report also states that world urbanisation is projected to go up from 55.3 % in 2018 to 60 % in 2030. So while the urban population as a whole is growing and set to grow further, the pace of growth has been and is likely to vary across regions. Between 2000 and 2018, the population of cities with population 500,000 or more grew at 2.4%. However, 36 of these cities grew more than twice as fast, at average 6%. Of these 36 cities, 35 were in Asia and Africa (28 and 7 respectively) and only one in North America. The Report notes that a great majority of the world’s cities have fewer than 5 million inhabitants. 467 cities between 1 and 5 million in 2018 will grow to 597 cities by 2030. 598 cities with between 0.5 and 1 million in 2018 will grow to 710 in 2030.
Interestingly the report noted that between 2000 and 2018, 52 cities saw declining populations. Most of these are in Europe. Therefore while urbanisation across the globe will keep marching ahead, cities of some regions (notably Europe) are already seeing declining populations.

What happens when cities shrink?

There could be several more reasons for shrinking cities.
Among serious fallouts of shrinking cities is declining economic activity. Such economic contraction can be both the cause and effect of declining populations in cities. As we saw earlier, limiting certain economic activity due to environmental considerations or structural changes can drive out populations engaged in this and related activities. Like in the case of the jute (Kolkata) or textile (Mumbai) industries.
Therefore, declining economic activity can be the cause of population reduction. Declining economic activity can also be the result of population reduction. As fertility rates fall, ageing of the population sets in. In other words, there are more and more of older people beyond working age and fewer people in the work force and limited talent. Additionally the large number of older people creates a larger ‘dependent’ population and smaller ‘supporter’ population. All these can limit the growth of economic activity, undermine entrepreneurship, suppress incomes, and become a drag on prosperity.
Another outcome is potential under-utilization of assets such as housing, public buildings and infrastructure assets such as transport (metro, BRTS) which in turn can affect the viability of these assets. This aspect can become pronounced when it damages the prospects of commercial assets such as hotels, restaurants, and malls.

We still have time
As we have seen, this phenomenon of shrinking cities may be relevant for planners in the more developed economies as they craft cities for the future. For us in Asia as also in Africa, we are likely to see some more years of growing cities, not declining ones. However our largest cities may not grow at the same pace and intensity as in the past. The growth of cities in our case could be tempered by the emergence of larger numbers of small and mid-sized cities and towns.As the metropolises and larger cities struggle to create new infrastructure and service delivery capabilities, populations may prefer smaller cities and towns in their search for better livability. It appears in any case, that in times to come,Indian cities will engage in a race to attract population including working age talent in order to enrich life in their cities; not view growing in-migration as a burden, even a disaster that strains the city.

Why cities could shrink?
Among the foremost reasons could be the decline in the overall population itself. This could be the result of rapidly falling fertility rates below the replacement level of 2.1 in the more developed countries. Fertility rates in South Korea are now 1.17 and in Japan 1.44. If current trends continue, by some projections, Japan’s population is expected to decline from 126.5 million at present to 88 million in 2065, 51 million by 2115, and to just 500 by the year 3000! A frightening prospect indeed! But the issue of falling fertility rates is not a stray occurrence as in the above cases. In India too there is evidence of slowing population growth. As per Census 2011, 11 states had fertility rates higher than the replacement rate of 2.1. In two years from now, only Bihar will have a rate higher rate than 2.1. (An interesting insight into this number is the fact that 2.1 is a global figure. For India it could be higher because we have a lower sex ratio (women per 1000 males) than the world average). As fertility rates drop throughout the country to below replacement level, the population will grow only due to the steady increase in life expectancy. As per the latest Economic Survey, population growth will be less than 1% p.a. during 2021-31 and under 0.5% during 2031-41. In other words slowing population growth in cities could be the result of slowing population growth of the country as a whole. In several countries, in-migration to cities has slowed down too and even reversed.
Among other reasons could be economic changes. Restricted manufacturing due to pollution concerns (textile printing and dyeing, for example) may lead to closing down of many units thus reducing the labour force by pushing workers out in search of livelihoods. It could adversely impact the ancillary units, transportation business and supporting ecosystem. These would undermine livelihoods and cause out-migration. Sometimes structural changes in industry like the decline of the jute industry in India may cause movement of the labour force.
Often, existing cities may become unviable or unsuitable for businesses to grow further. Take the software industry in Bengaluru for example. After several decades of fantastic growth of the industry and the city, businesses could be looking for newer, smaller cities due to limitations of infrastructure (road congestion, water supply) and cost of living in Bengaluru.
In other cases, natural disasters also bring about population declines. The UN Report The World’s Cities in 2018quotes the examples of New Orleans, United States (due to Hurricane Katrina in 2005) and Sendai, Japan (due to earthquake and tsunami of 2011) as examples.