The Wealth of Megacities: A Decentralized Production Model
By 2050, two-thirds of the world's population will embrace urban living—a testament to the enduring allure cultivated over millennia of urban evolution.
Today marks the inception of a groundbreaking era in production—a monumental shift poised to redefine our world at its core. While capitalism, as outlined in Adam Smith's seminal "The Wealth of Nations," has spurred innovation and progress, deeper reflection reveals that the true driving force behind our prosperity resides within the megacities. I dub this phenomenon "The Wealth of Megacities," underscoring the indispensable role these towering urban hubs have played in propelling economic growth, from the ancient marvel of Uruk to modern giants like Jinjing ,Tokyo-Yokohama or future cities like NEOM.
Indeed, megacities have emerged as the epicenters of global advancement, contributing over 35% to the global GDP. Yet, they also grapple with daunting challenges encompassing health, security, and environmental sustainability.
Looking forward, projections indicate that by 2050, two-thirds of the world's population will embrace urban living—a testament to the enduring allure cultivated over millennia of urban evolution. From the earliest settlements in Uruk to the industrial titans of the 19th century and the financial nerve centers of the 20th, megacities have consistently led the charge in human progress.
Latin American megacities like Sao Paulo and Mexico City serve as contemporary exemplars of urban vitality. And in the 21st century, these megacities are on track to surpass the 100 million mark, forging interconnected networks akin to China's Jing-Jin-Ji conglomeration.
However, realizing this vision demands a fundamental evolution of our production model. Existing value chains not only carry adverse environmental implications but also pose security risks, especially in cities with populations exceeding 100 million.
We find ourselves on the cusp of an unprecedented technological revolution—a period defined by the velocity and scale of change eclipsing any in history. Unlike past disruptions, which unfolded gradually and in isolation, the 2020s herald a sweeping transformation across every sector simultaneously.
Driving this monumental shift are groundbreaking advancements in key technologies, each holding the power to reshape multiple sectors. Just as the advent of smartphones and automobiles revolutionized industries incrementally, investments in any sector catalyze breakthroughs, triggering a cascade of disruption. For instance, the surge in demand for electric vehicles, coupled with battery advancements, is redefining energy storage, spurring further innovations in nuclear and solar energy.
These converging technologies are primed to unlock unprecedented improvements across diverse sectors, fundamentally reshaping our way of life.
At the forefront of this transformation lies information technology—an indispensable catalyst mirroring its pivotal role in the emergence of the Industrial Order.
Information Technology
Remarkable strides in information processing and communications have already driven costs to near-zero levels, empowering billions with tools once beyond reach. The ubiquitous smartphone epitomizes this transformation, unlocking boundless potential across all economic sectors.
Decentralized Labor
Just two decades ago, widespread remote work, study, and socializing seemed confined to science fiction. Yet, recent events, epitomized by the Covid-19 crisis, underscore how interconnected technologies are reshaping our reality. As technology enables remote execution of increasingly complex tasks, a shift towards decentralized production becomes inevitable, reshaping traditional notions of work and geography.
Agriculture: Precision Fermentation
In the realm of food production, precision fermentation heralds a new era, promising to render animal agriculture obsolete. By harnessing biology, we embark on a journey of creation, crafting foods from meticulously designed molecules and cells, with profound implications for health, sustainability, and the environment.
Decentralized Energy
Likewise, the convergence of modular nuclear reactors, solar power, batteries, sensors, and AI is ushering in a distributed energy system, challenging centralized power generation and reshaping the energy landscape.
Transportation as a Service Transportation is undergoing a radical transformation, with Transportation as a Service (TaaS) poised to supplant individual car ownership. Electric vehicles, boasting extended lifespans and lower operating costs, emerge as the economic choice for fleets, reshaping urban landscapes and transportation dynamics.
New Materials
The production of materials undergoes a metamorphosis, transitioning from extraction to creation. Emerging technologies empower us to manipulate matter with unparalleled precision, heralding an era of abundant and versatile materials.
As these disruptions gain momentum, fueled by feedback mechanisms, sectors will undergo profound transformations throughout the 2020s and into the 2030s, defying conventional analyses. Together, they lay the groundwork for a new system of production, promising to usher in an age of unparalleled progress and innovation.
These changes will unfold in the megacities, the crucibles of our civilization, serving as the laboratory for this transformative journey.
Guillermo Valencia A ,
Co-founder, Macrowise
Mexico City, March 24th, 2024