Prosperity Lives in the City
Here is the opening from this interesting column by Jim O'Neill, published by Bloomberg
If you study the biggest and most rapidly emerging economies, as I have for many years, you are bound to be struck by the power of urbanization and the pivotal role of thriving cities. More often than not, cities are the engine that powers economic growth. When a country's cities succeed -- and I do mean cities, plural -- the economy is much more likely to prosper.
The U.K. illustrates this point rather forcefully. The economy as a whole is finally beginning torecover at a respectable pace: Real gross domestic product rose by 3.2 percent at an annual rate in the third quarter, and growth in the second quarter was pretty good, too. There's still a lot of ground to make up, but many of Britain's developed-country counterparts would be pleased with such numbers in the aggregate. The trouble is, as many businessmen and commentators emphasize, U.K. growth is not well balanced.
Britain is still too dependent on excessive borrowing and unsustainable consumption; exports and investment need to strengthen further; and real wages are still falling. The most conspicuous form of imbalance, though, is regional. The country increasingly depends on London and the southeast.
The crash hit finance -- hence the City of London and its metropolitan hinterland -- especially hard. That's one reason U.K. output has yet to recover to its pre-crash level. Now, in turn, London's recovery is supporting the broader economy. If growth were better dispersed among other U.K. centers of activity, the economic cycle would be less volatile and less likely to push wages and prices (notably house prices) out of line.
David Fuller's view The dominant role of big cities, including their satellites within an hour's commute, will only increase as the global economy continues to modernise. They will appeal to many of the best and brightest who wish to remain actively employed. They also have amenities - restaurants, culture, shops and museums - to improve the quality of life and also attract many tourists. If your younger relatives are planning to launch or expand a career, tell them to choose a city.Back to top