Megacities and the New Urban Economy
We're seeing the rise of the concrete jungle.
According to U.N. estimates, nearly 70% of people will live in cities by 2050.
Some cities have grown so large in population and power that a new term has been coined for them: megacities.
But humanity's rapid urbanization comes with problems.
Powering a city that large is a herculean endeavor - managing traffic is as well. There's also the environmental impact to consider.
Regardless, the future is urban. The fortunes of entire nations will be decided in the cities that harness the best and brightest their countries have to offer.
One city that bridges Europe and Asia is proving to be a great model for these emerging megacities. It's shaping up to be the financial and technological hub of the Middle East...
In its 5,000-year history, Istanbul has served as the capital of three empires. But its best days are still ahead. The city is going through a renaissance. But why?
Partially, its due to location...
Istanbul controls the Bosporus, the only passage between the Black Sea and the Mediterranean Sea. It's also the shortest land route between Europe and Asia.
The city has a natural harbor in the form of the Golden Horn. It also has a good climate and is well-connected to both European and Middle Eastern infrastructures through a network of highways, rail lines, airports and seaports.
All that has made it one of the fastest-growing cities on earth. In 1980, it was home to 4.3 million people. As of 2019, its population has more than tripled to 14.9 million.
While it's had some hiccups, Istanbul has handled that growth remarkably well.
Slums sprang up as the city grew in the 1970s and '80s. But they are aggressively being torn down now. The city has ready access to electricity. Water quality does remain an issue, but it's improving, in part due to clever tech startups like BiSU.
Today Istanbul is a thoroughly modern city.
It resembles any other major European city, complete with a subway system, modern entertainment facilities, and streets oozing with culture and history.
Istanbul has become a business hub and an economic center of gravity for the Middle East and Eastern Europe. The city makes up about one-third of Turkey's total GDP. It's home to roughly 1 in 5 Turks.
Because of its resources and growing wealth, Istanbul is Turkey's Silicon Valley. The city's tech startups, most of them native, have access to a large, young and well-educated population.
Turkish companies like iyzico and Insider have had an international impact. Iyzico is an e-payment financial technology company used by the likes of Zara and BMW. Insider is a growth-management platform used by Toyota, Hyundai, Huawei and many others.
A bet on both Istanbul and Turkey is one of the best ways to invest in this premier developing economy. Turkey is currently the ninth-largest economy in the world based on purchasing power parity. By 2030, it's expected to be the fifth-largest economy. It could see 314% growth between now and then.
And the iShares MSCI Turkey ETF (Nasdaq: TUR) could be a good way to profit from this emerging market phenomenon.
It's time to tame the concrete jungle.