One of the things I want to talk about, and help you guys really understand, is how and why we've come to be in a world of cities. You know, you hear people now increasingly say half the world's population lives in cities in the surrounding urban areas, and more and more of us will live in cities in the future. Cities are really the place where our economy, the economic engine of our cities. But I want to go in this section or session a little bit deeper. I brought some of the notes that my team and I had developed to give you a sense of how big this world of cities will be. In the year 1800, that's at the beginning of the Industrial Revolution, 3 percent of the world's population lived in cities. By the year 1900, when my grandparents, my own grandparents were coming from southern Italy to the United States, 15 percent of the world's population lived in cities and metropolitan areas. By the year 1950, 30 percent. Today we have half. Over the next century, think about this, our population will maybe rise from a current 7 billion people, a little more, maybe 8 billion people, to 11 or 12 billion. At that time, 85 percent of our population will live in cities and urban areas. 8.6 billion people at that time will live in cities and urban areas, most of them in cities we have not yet created. So when I say it's going to be a world of cities, that our population centers in the world will be incredibly concentrated and clustered in ways we could have never estimated even 50 or 60 years ago. One of the problems is, when we talk about a world of cities, not all cities are equal, and this is a big issue. You know, we've seen urbanization go hand-in-hand with industrialization. We developed more factories, more industries. As urbanization progressed, we developed the higher standards of living, greater economic output and a bigger middle class. Today unfortunately, that connection in this world of cities has broken down. Not in all parts of the world. In parts of China, as cities grow they're getting richer, but in many parts of the world, India or Southeast Asia, certainly Africa, the places that are going to urbanize next scholars call this urbanization without growth. Kind of a big concept, but think about it. Urbanization without growth. In the world today, we have about 850 million people, and some would argue maybe as many as a billion. That's more than 2.5 times the population of the United States. That's in fact bigger than the population of the United States and the European Union combined. Living in conditions of utter poverty and deprivation in the world's global slums. The way I like to think about it is, the world cities are grouped into four categories. There's the Superstar Cities: London, New York, San Francisco, Paris, Singapore, Hong Kong, Tokyo. These are where the world's rich people live. And yes, those cities have inequality. We're going to talk more about that in a later section of this course. Those cities have inequality, and experience gentrification, and they're unaffordable, but the living standards in those cities across the board are middle-class and above. The second group includes kind of well-off cities, often in the advanced countries. Places like Milan or Rome or Barcelona, Miami, where there is, not the complete superstars of the world economy, but which are relatively affluent. But now we get to the third and fourth group. Now we get to the kinds of places in the third group, the places in the advanced countries which have deindustrialized. Places like Pittsburgh and Detroit and their analogues in the United Kingdom and Europe which have lost their industrial heartlands. And then the rapidly industrializing places. Places like Guadalajara, Rio de Janeiro, Mexico City, Sao Paulo, Shanghai which are coming up, which are developing a small, but limited middle class. In the outskirts of Shanghai, in the periphery of Shanghai, people live in pre-civilized conditions. And we're not even talking about the poorest group of cities, you know, now we're talking about cities in the so-called global south. Manila, Jakarta, Cairo, Alexandria, Medellín, like Mumbai, Kolkata. These are cities where it appears that the urbanization that we so much want to propel economic growth, that connection is broken down. Where millions upon millions of people are trapped in these global slums. You know, and it's not just in the center of the city. Often these global slums grow up in the outskirts of the city, disconnected from economic opportunity. No Internet connectivity. And the challenge here is how do we make urbanization, you know I say, how do we move from a system of "winner take all urbanism" we have today, where the great spikey centers are doing very well and how do we create an urbanism for all. We know in the previous section of the course, that cities and the clustering of people together is what creates economic invasion. When people cluster together that's what creates productivity. What is the productivity advantage of being in a city in metropolitan area, compared to being anywhere else in the country. So, for the advanced nations, let's take the United States for example, most places, cities, metropolitan areas are slightly more productive than the country as a whole. Boston is about 1.4, 40 percent more productive than the US. New York City, 1.3 about 30 percent more productive. The same turns true of London, of Tokyo. The one that's off the chart is the San Francisco Bay area. The ratio is 1.6. So about 60 percent you know a little bit better than the country. There are 80 metros in the world, Istanbul, Mumbai, Sao Paulo, Shanghai, that have productivity double the rate of their respective nations. 50 metros in the world have productivity ratios three-to-nine times higher, and a half dozen, Manila, Bangkok, Lima Peru, more than 10 times, more than 10 times. Now, one last fact that's useful, those are for the nations where we can actually get statistics, where places like the Brookings Institution actually have economic output. We actually went back using our light based measures from the satellite images, and we wanted to look at what's happening in the places that are now urbanising, where no statistics are available. The parts of Southeast Asia and Africa. Not one city, not one metropolitan area in Southeast Asia or Africa were less productive than their nation. 40 of those metros had ratios higher than five, meaning five times they were more productive. And seven of them in Asia and Africa had urban productivity ratios 10 times greater than their metropolitan areas as a whole. So what I'm going to say is, yes, there are great challenges in the world. Yes, we have a terrible divide between the advanced cities of the global north and the global south. But really, the only hope we have, and what we have to do is work harder to make it work for us, is to really stoke this basic engine of economic growth that comes from the clustering of people together in cities. And I think there's a couple of things that are worth talking about. One, I think it's increasingly recognized that top-down strategies don't work anymore. That really the key to generating great cities goes back to what the great Jane Jacobs said. It means empowering people in their neighborhoods to do the things, to use their creativity, to use their talent. One example I use of this is the best factories in the world give the factory workers, you know my dad's factory where he worked he taught me this, give the factory workers not only the tools, but let them work together in teams to figure out the most innovative solutions. Same thing happens in a neighborhood. The people who work in the neighborhood know this best. There's a great essay written by a guy named John Turner in 1972 called "Housing is A Verb". Kind of a funny title. But what he said is, for too long we thought of housing as a noun, something that, you know, planners and great thinkers and great policy makers and mayors and national leaders imposed on a community. He said housing is a verb. Housing is what people in communities do together to build their community. You know Jane Jacobs is in so many things, she had such great quotes. You know, that she would talk about. When she talked about poverty and global development she said something that's really remarkable. She said poverty doesn't have a cause. It's the absence of economic development. Now think about that. Poverty doesn't have a cause. It's the great cold that comes in the absence of economic development. And when we're thinking not only about the development of our great cities and great neighborhoods in the advanced countries. We're thinking about the urbanization of the poorest places on the face of the earth. That's really the key, to enable people to connect to one another. To able people to settle in little towns and villages. To enable people in their diversity and our human energy to power economic growth. That's really the key to making urbanization work for us today.