December 18th, 2012
09:54 AM ET

World’s biggest metropolitan areas key to driving growth

By Emilia Istrate, Special to CNN

Editor’s note: Emilia Istrate is an associate fellow at the Brookings Institution Metropolitan Policy Program, and the recent lead author of Global MetroMonitor 2012. The views expressed are the author’s own.

Looking back, 2012 was a slow year for both developed and developing countries as major unresolved issues from 2011 carried over into this year. The European Union continued to battle fiscal and debt problems, while the U.S. recovery struggled to gain a foothold. Low growth and uncertainty in developed economies affected both large and small emerging economies, exposing domestic weaknesses in those markets. No major national economy is powering a needed global recovery.

Beyond regional and national divides, however, examining growth patterns in metropolitan areas provides clues to the sources of growth and potential recovery. For example, the 300 largest metro economies worldwide accounted for nearly one-half of the global economy, delivering more than half of the global economic growth between 2011 and 2012. And this despite containing only 19 percent of the world population.

The 2012 Global MetroMonitor, a Brookings study of economic growth in the world’s 300 largest metropolitan economies, reveals that three-quarters of the fastest-growing metro areas in 2012 were in developing Asia, Latin America, and the Middle East and Africa. While most of these metro areas are in developing countries, some metro areas in high-income countries were part of the fastest-growing metro economies last year (Macau, San Juan, and Riyadh).

Western European metro areas, in contrast, had a bad year overall in 2012, with three-quarters of the lowest-performing metro economies hailing from the region. Athens was the bottom performer for a third year in a row, reflecting the ongoing crisis in Greece.

However, this was not only a story about Southern Europe. Metro areas in other parts of the region (Brussels, Leeds-Bradford, Lille, and Rotterdam-Amsterdam) registered declines or almost zero growth in employment and/or GDP per capita in 2012.

Yet there are glimmers of hope across the Atlantic. Despite the ongoing problems on the continent, nine Western European metro areas grew faster than their countries on both indicators, two more than in North America. Four were German metro areas (Bremen, Hamburg, Hannover, Nürnberg- Fürth), joined by others in Scandinavia (Stockholm, Helsinki), Austria (Linz), Belgium- Germany (Aachen-Liege), and France (Paris).

The North American outperformers were few and far in between, including one Canadian metro area (Edmonton), two in the Northeastern United States (Boston and Worcester), Detroit, and three in the Western United States (Salt Lake City, San Jose, and Seattle).

Across the globe, 56 metro areas did better than their countries on both indicators used in our study while experiencing growth in 2012. Even more important, these metro “pockets of growth” were spread around the world, from twelve in developing Asia-Pacific (such as Mumbai, Kolkata, Jakarta, and Kuala Lumpur) to five in Eastern Europe and Central Asia (Ankara, Bucharest, Istanbul, Izmir, and Warsaw).

Other optimistic signs come from the metropolitan economies that recovered to pre-recession levels or defied the slowdown trend with accelerating growth in 2012. Three U.S. metro areas (Dallas, Knoxville, and Pittsburgh) managed to recover in 2012. In contrast, most metro areas in the developing Asia-Pacific and Latin America regions suffered no recession in the last five years or have fully recovered to pre-recession levels. Overall, 2012 was better than last year for American metro areas, with some turning the corner into positive territory.

These metropolitan growth patterns are the result of a combination of national and local factors. In the short run, less wealthy metro areas are typically growing faster than their richer counterparts. Over the long run, country growth matters most to metro-level growth. But metro-specific factors such as industry specialization and educational attainment shape the growth potential of metro areas as well.

As the U.S. economy is powered by metropolitan areas, so too is the global economy. This new economic reality often goes unrecognized, with economic discussions focusing on national and regional dimensions. Better understanding this reality would help national governments create the conditions needed to empower metro areas to secure future growth.

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Topics: Economy

soundoff (3 Responses)
  1. allthingsgeography1

    Reblogged this on All Things Geography.

    December 18, 2012 at 11:03 am | Reply
  2. deniz boro

    We all see te consequences however ;)

    December 24, 2012 at 5:40 pm | Reply

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