Courtesy of The Financial Times, a report on the big shift towards emerging markets cities as a driver of GDP growth.  As the article notes:

“…The world’s 600 biggest cities account for 60 per cent of global GDP growth. And that won’t change over the next decade and a half. What will change, dramatically, is which cities make up the 600, with a big shift towards emerging markets, especially China.

No great surprise there, perhaps. But one of the main conclusions from a report* published by international consultants McKinsey on Thursday is that it is middleweight cities, rather than the world’s megacities, that will drive most of global growth.

The report says that, until now, companies have been right to base their strategies on developed markets and megacities in emerging markets – a combination that delivers 70 per cent of growth today. But, it warns, this combination will deliver just one third of world growth to 2025.

In fact, it says, megacities in general are growing in line with or more slowly than their host economies – and this will continue, as the focus shifts to middleweight cities:

?We estimate that today’s 23 megacities will contribute just over 10 percent of global growth to 2025, below their 14 percent share of global GDP today.

??Instead, we see the 577 fast-growing middleweights in the City 600 contributing half of global growth to 2025, gaining share from today’s megacities. Worldwide, we will see 13 middleweight cities become megacities by 2025, 12 of which are in emerging markets (the exception is Chicago) and seven in China alone.

??Emerging market mega- and middleweight cities together—423 of them are included in the City 600—are expected to contribute more than 45 percent of global growth from 2007 to 2025. Across the world, we see 407 emerging market middleweights contributing nearly 40 percent of global growth, more than the developed world and developing region megacities put together.

The trick, of course, is to identify the right cities. The authors note: “These middleweights include many relatively unfamiliar cities such as Ahmedabad, Huambo, Fushun, Medan, and Viña del Mar.”

As for the top 600, its focus will move south and, especially, east:

One of every three developed market cities will no longer make the top 600; and one out of every 20 cities in emerging markets is likely to see its rank drop out of the top 600. By 2025, we expect 136 new cities to enter the top 600, all of them from the developing world and overwhelmingly (100 new cities) from China. These include cities such as Haerbin, Shantou, and Guiyang. But China is not the only economy to contribute to the shifting urban landscape. India will contribute 13 newcomers including Hyderabad and Surat. Latin America will be the source of eight cities that include Cancún and Barranquilla.

One word of warning about the shift to EMs though. Companies would be wrong to ignore the developed world: 98 fast-growing north American cities will contribute almost 10 per cent of global growth to 2025, according to McKinsey.

Here is the report’s ranking of the world’s future top 25 cities by key criteria: