ECON - The Impact of Urbanization [LESSON]

The Impact of Urbanization

In this lesson, you will analyze the causes and consequences of the worldwide trend towards urbanization. Urbanization, the process by which people move from rural to urban areas, has significant implications for socio-economic development, including changing employment patterns, urban sprawl, squatter settlements, and gentrification.

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The Impact of Urbanization

Understanding Urbanization

Urbanization is the phenomenon where an increasing proportion of the population moves from rural to urban areas, resulting in the growth of cities and towns. It is driven by various factors such as industrialization, economic opportunities, and better access to amenities and services in urban centers. As people migrate to cities in search of employment and improved living standards, the urban population grows, leading to the expansion and transformation of urban areas.

The bottom line on this graph represents people who are moving to cities. Click play on the interactive graph and hover over it to see the details of each year.

Answer the question below to check your knowledge.

Now, check out this interactive world map. Click the play button and watch how more and more countries of the world have a higher and higher share of the population living in urban areas.

What else did you notice? Which areas still have lower rates of urbanization? Why do you think that is?

Causes of Urbanization

So, why do people move to cities? Well, that can be a complicated question to answer. Let’s look at three main factors, click each tab to learn more.

Industrialization & Changing Employment Patterns

Industrialization plays a pivotal role in driving urbanization by attracting rural populations to urban areas in search of employment opportunities. For example, during the Industrial Revolution in the 18th and 19th centuries, cities like Manchester in the United Kingdom (pictured) experienced rapid urbanization due to the growth of textile factories. This shift from agrarian to industrial economies, a significant change in employment patterns, led to the concentration of manufacturing jobs in urban centers, driving population migration from rural to urban areas.

An aerial view of the Manchester, UK skyline

Overall Economic Opportunities

Urbanization offers a wide range of economic opportunities beyond traditional employment. For instance, cities serve as hubs for trade, commerce, and entrepreneurship, fostering innovation and economic growth. Take Tokyo, Japan, as an example, where the concentration of financial institutions, technological innovation, and diverse markets creates a dynamic economic ecosystem. Tokyo's status as a global financial center attracts multinational corporations, investors, and entrepreneurs seeking access to capital and markets. Beyond job opportunities, urban areas provide access to markets, capital, and networking opportunities, driving economic prosperity and innovation in industries such as finance, technology, and retail.

Tokyo skyline with Mount Fuji in the background

Social Benefits

Urbanization brings significant social benefits, including improved infrastructure development, access to education, healthcare, and cultural amenities. Cities invest in transportation systems, healthcare facilities, and educational institutions to meet the needs of growing populations. Consider Seoul, South Korea, where rapid urbanization has led to the development of world-class educational institutions, healthcare facilities, and cultural landmarks. The city's vibrant cultural scene, encompassing museums, theaters, and galleries, enriches the lives of residents and attracts tourists from around the globe. Additionally, Seoul's modern infrastructure, including efficient public transportation systems and green spaces, enhances residents' quality of life and promotes social cohesion. Urbanization in Seoul has contributed to higher literacy rates, increased life expectancy, and greater access to essential services, fostering social development and well-being in the urban population.

Downtown Seoul, South Korea

Consequences of Urbanization:

Ok, so now we have a basic understanding of why people have been moving to urban areas. But why should we care? After all, who cares where people live, and this urbanization stuff is sounding pretty good anyway? Let’s learn how urbanization is having a significant impact by clicking each tab below.

Urban Sprawl

Urbanization often leads to urban sprawl, characterized by the uncontrolled expansion of urban areas into surrounding rural landscapes. Urban sprawl refers to the outward expansion of urban areas, often resulting in the development of medium-density, automobile-dependent communities on the fringe of cities. One example of urban sprawl can be observed in Atlanta, Georgia. Atlanta has experienced significant urban sprawl over the past few decades, with the city's population spreading outwards into surrounding suburban areas. This expansion has led to the development of sprawling suburban neighborhoods, characterized by single-family homes, shopping centers, and commercial districts spread out over vast land area. Due to urban sprawl, Atlanta has seen increased traffic congestion, environmental degradation, and a strain on public services and infrastructure.

Skyline of downtown Atlanta, Georgia

Squatter Settlements

Urbanization often leads to the formation of squatter settlements or informal settlements, characterized by inadequate housing and basic services. Rio de Janeiro, Brazil, is known for its favelas, informal settlements built on hillsides and marginalized areas. Squatter settlements lack proper infrastructure, sanitation, and access to essential services, posing health and safety risks for residents. Addressing the challenges of squatter settlements requires comprehensive urban planning and investment in affordable housing and basic amenities.

Aerial view of Favela da Rocinha, Biggest Slum in Brazil on the Mountain in Rio de Janeiro, and Skyline of the City in the background

Gentrification

Gentrification is a consequence of urbanization characterized by the displacement of low-income residents due to rising property values and redevelopment projects. One example of gentrification can be seen in Portland, Oregon. Over the past few decades, Portland has experienced rapid urban growth and redevelopment, particularly in neighborhoods such as the Pearl District and Alberta Arts District. These areas, once characterized by industrial warehouses and affordable housing, have undergone substantial transformation as young professionals, artists, and entrepreneurs have flocked to the area, attracted by its vibrant culture, amenities, and proximity to downtown. While the influx of investment has revitalized previously neglected areas, it has also displaced long-time residents, including low-income families and communities of color, who can no longer afford to live in their neighborhoods.

A renovated townhome alongside a similar building before restoration

Crash Course | Video

For more about the development of countries around the world, please watch this video:

Reflection

As we conclude this lesson, reflect on the causes and consequences of urbanization discussed. How does urbanization impact communities, economies, and environments? By examining the complicated nature of urbanization, we gain a deeper understanding of its implications for global development and the challenges and opportunities it presents for urban planners, policymakers, and residents alike.

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