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Tuesday, May 22, 2012

Urbanization, Globalization, and Media

I have a rather stunning statistic for you. Each and every day around 180,000 people leave the rural countryside across the world and move to a city. Demographers are not exactly sure but sometime in the 2007-2008 window, a majority of the world’s people lived in town and cities for the first time in measured history.  In my lifetime, cities have absorbed close to 70% of global population growth.

Along with our old favorite demographics, plus the increasingly significant globalization, urbanization is the last support in the three-legged stool of megatrends that are remaking the world in the 21st century.

Even a casual look at the data is absolutely mind-boggling. Ghaziabad, India is adding 250,000 new residents each year on its current base of 4.6 million. Have you ever heard of Ghaziabad? While we are playing trivial pursuit, are you familiar with Beihai, China? I have been following its fortunes for several years. It is growing by 10-11% per year. In only seven years, it will double its current census count of 1.3 million making it the fastest growing metropolis in the world. While China and India or Chindia, as some have dubbed it, get all the publicity, don’t forget that across Asia millions in Indonesia, Thailand, Malaysia, the Philippines and Vietnam stream into their cities as well each year.

All of this action fuels economic growth but one problem stands in its way. That problem is an inadequate infrastructure. As young people across the globe flock to the cities for more opportunity, the strain on natural resources and urban area infrastructure in enormous.  By the middle of this century, there will be an additional 2.8 billion people living in cities.

The problems are huge. But, the opportunities are profound. People who produce steel, cement, copper and oil will have cities lined up to buy their products. The greatest problem may be supplying clean water to these new urbanites. China has a fifth of the world’s population yet only 7% of the world’s freshwater supply. Some engineering firms are going to have to provide some massive desalination plan or other sleight of hand to get them through the next few decades.

With this massive shift from rice paddy to world-class city, the world of media will be affected profoundly as well. Some friends have written to me to say that newspapers in the big Asian and South American cities are set for a spike as new citizens who devour them on mass transit to and from work. To me, that is legacy thinking that is not likely going forward.

Over the last 60 years, a young person starting out in a big city outside of North America would often take this route in media usage: Buy a radio, then get a phone, buy a TV, and then (over the last 10 years), purchase a laptop.

Today, all that has changed. Someone coming from a rural area to Manila might get a cheap radio, but few buy a laptop, a landline phone or cell phone and they delay a TV purchase. What they get as soon as they can is a Smartphone. This allows them to call anyone, get the music they want, have Internet access, and choose from a nice compliment of video options.  Once they upgrade to a decent apartment, maybe cable or satellite TV is added to the mix.

The key takeaway to me is that these new urbanites have skipped a few steps compared to my generation or likely yours. They grew up with very little media in primitive conditions in remote rural areas. For many a Smartphone is their first passport in to the media world of today. While not affluent yet, they are buying personal care products and discretionary purchases like McDonald’s, cigarettes, and Coca-Cola that they never did in their home villages. This is why all players in the new media world have to find out a way to properly monetize mobile. The potential is huge as some 400,000 +new Smartphones are sold globally DAILY.

Localization of online advertising has to explode given the current globalization scenario. Right now, some 20% of the world’s GDP comes from the top 10 metropolitan areas. With the population shifts that we have talked about, imagine how much will come from cities that we currently have never heard of in 20 years. The U.N. says that 80% of the world’s urban population will be in the developing world by 2032.

A shift in economic growth and power is well underway. Accompanying it will be a seismic shift in media usage habits. Get ready, my young friends.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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