Building smarter 

Today’s urban populations are growing at an astounding rate. By 2050, it is estimated that more than 70 percent of the world’s population will live in cities, resulting in an influx of more than three billion people over the next four decades.

Clearly, the world’s established cities cannot even begin to absorb this exponential growth without significant change. Indeed, for most cities around the world – particularly within emerging and developing markets – existing infrastructure is already strained to the point of collapse.

In response, many jurisdictions are thinking seriously about how they might either extend their existing cities, or build entirely new urban areas to support the needs of the masses of aspiring urbanites. In India, for example, around 500 new cities will need to be developed over the next four decades, just to keep up with the anticipated rates of urbanization.

Recognizing that cities are key economic drivers for national economies, a growing number of jurisdictions are also focused on developing Special Economic Zones; purpose-built cities designed to service the needs of one or two specific industries in order to create a ‘business cluster’ that will drive national innovation, enhance employment and attract foreign investment.

But building an entirely new city or extending existing urban areas is a notoriously difficult and complex proposition. Getting it right involves the coordination and planning of tens of thousands of integrated pieces that must be joined together to create a single holistic plan. It is not simply a matter of dropping down roads and sewage pipes and hoping for the best; today’s city planners must balance a host of critical components such as infrastructure, services, culture, interconnectivity, transit, energy and employment, in order to create a city that can withstand the growing expectations of an ever-expanding population.

Master planning and keen vision, therefore, are critical. Planners must not only carefully consider and align multiple interdependent requirements, but must also be able to forecast what the city may need 50 or even a hundred years into the future to ensure that the urban landscape is expandable and adaptable to future innovations.

Central to this will be the incorporation of technology into the new city environment. Already, we are seeing the emergence of ‘smart cities’ that leverage purpose-built technology platforms to achieve greater efficiency and administrative capability. From street lighting and local security to waste water management and power distribution, cities will increasingly leverage new technology to create more livable and environmental ecosystems in which people will want to live and work.

One of the most significant challenges for planners of new cities is creating the optimal balance between employment opportunities and residential development. The simple truth is that people tend to migrate into urban areas to find gainful employment and therefore planners must spend some time understanding how their city might attract the quality and quantity of businesses that would provide an optimum work/live environment.

To achieve this, many local and national governments have started to examine how they might best incentivize business to relocate or start-up within their urban areas. In large part, this is often related to the strength and availability of infrastructure. Manufacturing, for example, requires ports and airports to move their products to market; reliable electricity and water systems to operate their factories; skilled and accessible labor markets to drive productivity; and competitive tax and regulatory regimes to facilitate market growth and stability. Each of these components must be considered, developed and promoted in order to secure business investment.

Of course, building a new city from scratch, or redeveloping a declining city, requires significant funding to ensure that all of the critical components can be developed according to planning timetables. The involvement of the private sector will be key to this success, as national and state levels of government are themselves financially strained.

The development of new cities carries a sizable demand risk that will require governments to pay considerable attention to how they structure and attract private investment in infrastructure development. In some cases, governments may need to not only offer implicit support to catalyze private investment, but may also need to take a larger role in the development of trunk infrastructure or fully finance certain components that may be economically inviable for private organizations.

Looking ahead, it seems fairly clear that hundreds – if not thousands – of new cities will need to be developed around the world over the next century. Success will largely depend on the ability of city planners to integrate lessons and best practices from existing cities and learn from the mistakes and triumphs of their peers.

In support of this demand, the Infrastructure 100 is a significant asset: one only need look at inspirational projects cited in this chapter to recognize that the new and extended cities being developed today will almost certainly change the way that people interact with the world around them.

By David O’Brien, KPMG in Canada

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