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The Future of Urbanization and Microcities

Current cities are dominated by microcity clusters, defined as dense aggregations of economic and social life. There are currently around 13,000 active microcities around the world. While COVID-19 has exposed the vulnerability of these clusters, their role as engines of economic growth will remain unchallenged hotbeds for urban technology innovation and the focal points of urban living. 

Common technologies deployed across all microcity types include smart cameras and biometrics, robotics and automation, digital signage, private Wi-Fi and 5G networks, and micro-grids. They address specific challenges related to people flow management, access and security, overall customer experience, and environmental impact while generating cost savings through maximizing operational efficiencies.

Major Names Are on Board

Technology vendors and service providers are focusing their product and solution strategies on one or more microcity types. Known for their industry prominence, companies such as Nokia (private 5G networks for cargo ports), Accenture (consultancy and system integration for airports), Navya (driverless vehicles for airports), IBM (data analytics and AI for ports), Cisco (IoT platforms for ports), Alstom (passenger flow management at railway stations), NEC (Software-Defined Networking for railway stations), Siemens (industrial systems for airports, campuses, and railway stations), and HERE (yard management at ports) have entered the fray.

The microcity concept is increasingly challenged by the current COVID-19 pandemic, accelerating already previously virtual lifestyles in terms of remote work, distance learning, eCommerce, and similar experiences. The urban design concepts centered around increasingly larger megastructures for airports, malls, and corporate campuses might yield to more distributed, smaller-scale suburban organizational frameworks in the aftermath of the pandemic, as new patterns established during COVID-19 become at least partially permanent.

At the same time, microcities also experience the largest urban challenges in terms of mobility and transportation, safety and security, dissemination of information to citizens, reliable supply of peak energy demands, and other services like communication, air and noise pollution, and overall sustainability issues.

Where Are Microcities Headed?

Because microcities represent some of the deepest human needs for socializing and personal fulfillment, they are likely to remain relevant. However, long-term growth rates will decrease, with more focus on more distributed, smaller-scale microcities with some categories like malls and corporate campuses expected to decline more dramatically.

The emergence of smart mobility in the form of ride hailing in many cities has already reduced the need to live close to mass transit hubs like metro stations with nearby real estate pricing starting to drop. Even within traditional urban contexts previously characterized by mass transit, COVID-19 has resulted in a steep decrease in the use of transit in favor of the use of personally-owned vehicles.

These factors will potentially contribute to microcities losing at least some of their roles and relevance:

  • Metro and Train Stations: Threatened by both personalized smart mobility modes and digital lifestyles taking hold with business travel expected to remain down by as much 30% post COVID-19.
  • University Campuses: Remote/online education is expected to become more mainstream, at least as a part-time way of teaching.
  • Corporate Campuses: As remote work becomes standard during COVID-19, some corporations have already decided to permanently abandon some of their office buildings; the number of new corporate campuses to be built in the future is expected to decline.
  • Malls: e-Commerce, already important pre-COVID-19, but growing fast during COVID-19 will likely have a negative impact, at least on some of the smaller malls.
  • Venues: With mass sports and cultural events likely to continue to be banned or at least restricted in the short to medium term, some venues will struggle to survive, while fewer new ones will be built.

A key question that needs to be addressed is whether or not urbanization in general, and microcity clusters in particular, will continue to remain the preferred way of future living, especially in the context of COVID-19, which is propelling digital lifestyles as more mainstream behaviors, in some ways permanently. This could potentially have a far-reaching impact in terms of the importance and value of living in or near cities to limit commute distances, spreading out the footprint of cities to larger geographical areas.

These findings are from ABI Research’s Smart Urban Concepts — Microcities and Cities-in-a-City application analysis report. This report is part of the company’s Smart Cities and Smart Spaces research service, which includes research, data, and ABI Insights.