As the world continues to urbanise rapidly, the share of the global population living in cities is projected to reach 64% by 2040, up from 57% in 2023. This growth highlights the need for innovative and sustainable solutions to boost urban liveability, resilience and efficiency. Digital cities, accelerating climate action, and strategic planning are the key trends shaping the cities of tomorrow, vital for enhancing the quality of urban life and offering opportunities for businesses.
Digital solutions enhance urban services, streamline governance and foster efficiency
As internet usage continues to rise, cities around the world are accelerating their digital transitions to enhance citizen services, promote economic development, and enrich the business environment.
By 2040, an estimated 96% of urban households will have access to the internet, compared to 88% in 2023, globally
Source: Euromonitor International
Barcelona’s digital transformation exemplifies the potential of smart cities, where AI-driven public services and widespread IoT sensors, used to monitor public spaces, air quality and traffic, help to enhance urban living. Barcelona also uses Digital Twin technology to design and operate the city effectively.
Businesses can leverage smart city infrastructure to streamline processes and improve efficiency of their operations. Additionally, amid the rising consumer adoption of digital technologies, businesses can tap into the growing demand for convenient technology-driven solutions in areas such as online retail, marketing and last-mile delivery.
Cities ramp up sustainability efforts and accelerate climate action
Urban areas account for 78% of global energy use and 60% of greenhouse gas emissions, according to the UN, underscoring the importance of addressing climate change at the city level. The shift towards renewable energy is a significant trend, with urban centres investing in solar, wind, and geothermal energy to reduce dependence on fossil fuels and alleviate their carbon footprint. Meanwhile, energy-efficient buildings and smart grids help to cut energy consumption and boost efficiency. This transition not only mitigates climate impact but also improves air quality, making cities healthier places to live. A relocation of pollution-intensive industries away from major cities is another solution for reducing pollution and improving air quality, as exemplified by Chinese cities such as Beijing, Tianjin and Wuhan.
Clean mobility is also at the forefront of urban sustainability efforts. Cities are enhancing public transit, building cycling infrastructure, incentivising electric vehicle use and promoting solutions such as mobility-as-a-service (MaaS) to reduce congestion and pollution. For example, in Paris, bicycles now surpass cars for trips in the city centre due to efforts by local authorities. According to L’Institut Paris Region, bicycles account for 11.2% of city centre trips, up from 3% in 2010, and compared to 4.3% by cars.
At the same time, recycling, composting, waste-to-energy and other circular economy principles are embraced to minimise waste and optimise resource consumption. In 2023, Kiel became the first German city to issue a zero-waste declaration and join the Zero Waste Cities initiative. Measures such as a pay-as-you-throw, discounts on reusables, and a ban on disposables at city events are expected to help Kiel transition to zero waste.
Strategic urban planning is key for fostering inclusive and resilient cities
Smart and sustainable urban planning emphasises efficient land use, affordable housing, green spaces, and eco-friendly infrastructure, which help to foster equity and enhance the wellbeing of residents. For example, innovative mixed-use building projects blend residential, commercial, and public spaces, fostering neighbourhood connectivity and reducing the need for commuting, while the adaptive reuse of old structures reduces resource consumption and alleviates urban sprawl.
In addition, the growing focus on sustainability facilitates development of green spaces and eco-friendly zones and adoption of clean energy solutions, while climate change challenges necessitate infrastructure upgrades and resilience planning to protect cities from environmental pressures and shocks. For example, Indonesia’s ambitious Nusantara project, with an estimated cost of USD35 billion, envisions a new capital that is green, walkable, smart, and resilient, powered by renewable energy and featuring vast forested areas.
Strategic urban planning also plays a crucial role in rapidly expanding developing cities, where surging populations aggravate undersupply of housing and public services, leading to overcrowding and the emergence of informal settlements.
In 2023, approximately half of the urban population in India and Bangladesh were living in slums
Source: Euromonitor International
This underscores the critical need for sustainable urbanisation, with a focus on developing infrastructure and affordable housing solutions to address socioeconomic disparities and ensure equitable access to essential amenities for all citizens.
The trends of urban digitalisation, sustainability, and strategic planning present significant opportunities for businesses. Companies can leverage advanced technologies for operational efficiencies, cater for rising demands for sustainable solutions, innovate in urban infrastructure and real estate, and contribute to resilient urban environments, enhancing business prospects across different sectors.
Please read our report Global Cities Trends for further insight into urban developments, including economic, demographic and consumer spending trends.