URBANIZATION REPORT EUROPEAN URBANIZATION TRENDS€¦ · EUROPE URBANIZATION TRENDS EUROPEAN...

EUROPE URBANIZATION TRENDS

EUROPEAN

URBANIZATION

TRENDS

URBANIZATION REPORT

BBVA Research


2

There’s still an important

gap between Western and

the Emerging Europe.

Responsive and

accountable policies are

needed to support

sustainable development

The urbanization process

in Europe took place

rapidly since 1950, but in

the 90s it moderated its

pace and it will likely be

slower during the next ten

years

The European

urbanization

phenomenon is associated

with higher economic,

technological and digital

development

European cities have

become in important hubs

for education, innovation

and knowledge-based

economies. Digitalization

has been fundamental to

increase competitiveness

Differences between

Western and Eastern

Europe also hold at

regional levels. Smart

cities oriented policies will

foster technological and

sustainable development


Almost three quarters of the European population

lived in urban areas in 2015

3 Source: BBVA Research and UN

SHARE OF URBAN AND RURAL POPULATION BY CONTINENT (1950-2050)

(% total population)

And it could rise to just over 80 % by 2050

AFRICA ASIA EUROPE

LATIN AMERICA AND THE CARIBBEAN NORTHERN AMERICA OCEANIA

0

20

40

60

80

100

195

0

196

0

197

0

198

0

199

0

200

0

201

0

202

0

203

0

204

0

205

0

0

20

40

60

80

100

195

0

196

0

197

0

198

0

199

0

200

0

201

0

202

0

203

0

204

0

205

0

0

20

40

60

80

100

195

0

196

0

197

0

198

0

199

0

200

0

201

0

202

0

203

0

204

0

205

0

0

20

40

60

80

100

195

0

196

0

197

0

198

0

199

0

200

0

201

0

202

0

203

0

204

0

205

0

0

20

40

60

80

100

195

0

196

0

197

0

198

0

199

0

200

0

201

0

202

0

203

0

204

0

205

00

20

40

60

80

100

195

0

196

0

197

0

198

0

199

0

200

0

201

0

202

0

203

0

204

0

205

0

Urban area Rural area

Note: See the annex for further information about the methodology


The rapid pace of urbanization in Eastern Europe until

1990 reduced the gap with Western countries

4 Source: BBVA Research and UN

SHARE OF URBAN AND RURAL POPULATION IN EUROPE (1950-2050)

(% total population)

EASTERN EUROPE WESTERN EUROPE

0

10

20

30

40

50

60

70

80

90

100

19

50

19

60

19

70

19

80

19

90

20

00

20

10

20

20

20

30

20

40

20

50

0

10

20

30

40

50

60

70

80

90

100

19

50

19

60

19

70

19

80

19

90

20

00

20

10

20

20

20

30

20

40

20

50

Urban area Rural area



Urbanization has shown a positive relation with

income…

5 Source: BBVA Research, World Bank and UN

LEVEL OF URBANIZATION AND GDP PER CAPITA

IN EUROPE IN 2000-2015

LEVEL OF URBANIZATION AND GDP PER CAPITA

IN EUROPE IN 2015

Urban population (% of total)

GD

P p

er

capita (

US

D P

PP

)

Advanced Europe

Emerging Europe

France

United Kingdom

Spain

Estonia

Poland

Romania

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

40 50 60 70 80 90

GD

P p

er

capita (

US

D P

PP

) Bosnia and Herzegovina

Albania Moldova

Slovenia

Azerbaijan

Georgia

Romania

Serbia

Portugal

Croatia

Slovak Republic

Montenegro

Macedonia

Ireland

Poland

Hungary

Armenia

Austria

Lithuania

Ukraine

Italy

Latvia

Cyprus

Bulgaria

Estonia

Belarus

Greece

Germany

Switzerland

Russia

Czech Republic

France

Norway

Spain

Netherlands

United Kingdom

Finland

Sweden

Denmark

Malta

Iceland

Belgium

0

5000

10000

15000

20000

25000

30000

35000

40000

30 40 50 60 70 80 90 100


2000 2015


… labor productivity…

6 Source: BBVA Research, World Bank and UN

LEVEL OF URBANIZATION AND LABOR

PRODUCTIVITY IN EUROPE IN 2000-2015

LEVEL OF URBANIZATION AND LABOR

PRODUCTIVITY IN EUROPE IN 2015


Labor

pro

ductivity

(US

D P

PP

)

Labor

pro

ductivity

(US

D P

PP

)


Advanced Europe

Emerging Europe

France

United Kingdom

Spain

Estonia

Poland

Romania

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

40 50 60 70 80 90

Bosnia and Herzegovina

Albania

Moldova

Slovenia

Azerbaijan

Georgia Romania

Serbia

Montenegro

Ireland

Armenia

Austria

Lithuania

Ukraine

Italy

Latvia

Cyprus Bulgaria

Estonia

Greece

Germany

Switzerland

Russia

France

Norway

Spain

Netherlands

United Kingdom

Finland

Sweden

Denmark

0

20000

40000

60000

80000

100000

120000

140000

20 40 60 80 100

2000 2015


… as well as with technological adoption

and competitiveness levels

7 Source: BBVA Research, Weforum

LEVEL OF URBANIZATION AND TECHNOLOGICAL

ADOPTION INDEX IN EUROPE IN 2015

(scale ranges from 1 to 7, best)

LEVEL OF URBANIZATION AND GLOBAL

COMPETITIVENESS INDEX IN EUROPE IN 2015



Technolo

gic

al adoption

Glo

bal C

om

petitiveness Index


Albania

Moldova

Slovenia

Georgia

Romania

Serbia

Portugal

Croatia

Slovak Republic

Montenegro

Ireland

Poland

Armenia

Turkey

Austria Lithuania

Ukraine

Italy

Latvia Cyprus

Bulgaria

Estonia

Greece

Germany

Switzerland

France

Norway

Spain

United Kingdom

Finland

Sweden

Luxembourg

Denmark Iceland

Belgium

3.5

4

4.5

5

5.5

6

6.5

30 50 70 90

Albania

Moldova

Slovenia

Azerbaijan

Georgia

Romania

Serbia

Portugal

Croatia Slovak Republic

Ireland

Poland

Hungary

Armenia

Austria

Ukraine

Italy Bulgaria

Estonia

Greece

Germany

Switzerland

Czech Republic

France

Norway

Spain

Netherlands

United Kingdom

Finland

Sweden

Luxembourg

Denmark

Malta

Iceland

Belgium

3.5

4

4.5

5

5.5

6

30 50 70 90


There’s a significant technological gap between

the advanced and the developing Europe


AVAILABILITY OF LATEST TECHNOLOGIES BUSINESS SOPHISTICATION

FIRM-LEVEL TECHNOLOGY ABSORPTION ICT USE

2

3

4

5

6

7

20152014201320122011

2

3

4

5

6

7

201520142013201220112010200920082007

2

3

4

5

6

7

201520142013201220112010200920082007

2

3

4

5

6

7

201520142013201220112010200920082007Availa

bili

ty o

f la

test

technolo

gie

s,

1-7

(best)

Busin

ess s

ophis

tication,

1-7

(best)

IC

T u

se,

1-7

(best)

Firm

-level te

chnolo

gy

absorp

tion,

1-7

(best)

Romania United Kingdom Emerging and Developing Europe Advanced Europe


Higher levels of urbanization also correlates

positively with ICT developments…

9

* Estimate

Source: BBVA Research, ITU World Telecommunication /ICT Indicators database

LEVEL OF URBANIZATION AND

INTERNET USE IN EUROPE IN 2015

ICT DEVELOPMENTS IN EUROPE IN 2005-2016*

Bosnia and Herzegovina

Albania

Moldova

Slovenia

Georgia

Romania

Serbia Portugal

Croatia

Montenegro

Ireland

Poland

Hungary

Armenia

Austria

Lithuania

Ukraine

Italy

Latvia

Cyprus

Bulgaria

Belarus

Greece

Germany

Switzerland

Czech Republic

France

Norway

Spain

Netherlands

United Kingdom

Finland

Sweden

Luxembourg

Denmark Iceland

Belgium

40

50

60

70

80

90

100

30 50 70 90


Indiv

iduals

usin

g the I

nte

rnet (%

)

0

20

40

60

80

100

120

140

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Fixed-telephone subscriptions

Mobile-cellular telephone

subscriptions

Active mobile-broadband

subscriptions

Fixed broadband subscriptions

Households with a computer

Households with Internet

access at home

Individuals using the Internet


… and with the quality of infrastructures and workforce


GLOBAL QUALITY OF

INFRASTRUCTURES IN 2015



EDUCATION AND TRAINING IN 2015


TRANSPORT INFRASTRUCTURE IN 2015


Urban population (% of total) Urban population (% of total)

Albania Moldova

Slovenia

Georgia

Serbia

Portugal

Croatia

Slovak Republic

Montenegro

Ireland

Poland

Hungary

Armenia

Austria

Lithuania

Ukraine

Italy

Cyprus

Bulgaria

Estonia

Greece

Germany

Switzerland

France

Norway

Spain

Netherlands

United Kingdom

Finland

Sweden

Luxembourg

Denmark

Malta

Iceland

Belgium

3

3.5

4

4.5

5

5.5

6

6.5

7

30 50 70 90 110

Qu

ality

of

overa

ll i

nfr

astr

uctu

re,

1-7

(b

est)

Albania

Moldova

Slovenia

Georgia

Romania

Serbia

Portugal

Croatia

Slovak Republic

Montenegro

Ireland

Poland

Hungary

Armenia

Austria

Lithuania

Ukraine

Italy

Latvia

Bulgaria

Estonia

Greece

Germany

Switzerland

Czech Republic

France

Norway

Spain

Netherlands

United Kingdom

Finland

Sweden

Luxembourg

Denmark

Malta

Iceland

Belgium

3.5

4

4.5

5

5.5

6

6.5

30 50 70 90

Hig

her

ed

ucati

on

an

d t

rain

ing

Albania

Moldova

Slovenia

Georgia

Romania

Serbia

Portugal

Croatia

Slovak Republic

Ireland

Poland

Hungary

Armenia

Turkey Austria

Lithuania

Italy

Latvia

Cyprus

Bulgaria

Estonia

Greece

Germany

Switzerland

Czech Republic

France

Norway

Spain

Netherlands

United Kingdom

Finland

Sweden

Luxembourg

Malta

Iceland

Belgium

2

2.5

3

3.5

4

4.5

5

5.5

6

6.5

30 50 70 90

Tra

nsp

ort

in

frastr

uctu

re


There’s also room for improvement in policy making to reduce

the gap between the advanced and the emerging Europe

11

INFRASTRUCTURE AND EDUCATION INDICES ACROSS EUROPEAN COUNTRIES, 2010-2015


0

1

2

3

4

5

6

7

AdvancedEurope

EmergingEurope

France United Kingdom Spain Estonia Poland Romania

Quality of overall infrastructure Higher education and training Transport infrastructure


Regional

Analysis xxxx

The role of

cities


13

Evolution of the urban landscape:

increasing role of cities

THE WORLD’S CITIES BY SIZE CLASS OF URBAN SETTLEMENT

Source: BBVA Research, UN

1 to 5 mill 10 mill or more 5 to 10 mill 500000 to 1 mill City population:

2030 1990



Higher urban agglomerations are also positively

associated with income growth and labor productivity

14

URBAN AGGLOMERATION AND GDP PER CAPITA

IN THE EUROPEAN CITIES IN 2015

URBAN AGGLOMERATION AND LABOR

PRODUCTIVITY IN THE EUROPEAN CITIES IN 2015

Urban agglomeration (Inhabitants per km2)

GD

P p

er

capita (

US

D P

PP

)

Urban agglomeration (Inhabitants per km2)

Labor

pro

ductivity (

US

D P

PP

)

London

Oxford

Brussels

Sofia

Stuttgart

Munich

Berlin

Dublin

Athens

Madrid

Barcelona

Paris

Milan

Roma

Luxembourg

Budapest

Valletta

Amsterdam

Warsaw

Lisboa

Bucharest

Stockholm

Riga

Prague

Bratislava

Helsinki

Cologne Copenhagen

Vienna

Hamburg

Rotterdam

Bilbao

20000

30000

40000

50000

60000

70000

80000

0 2000 4000 6000 8000 10000 12000

London

Oxford

Brussels

Sofia

Stuttgart

Berlin

Dublin

Madrid

Barcelona

Paris

Zagreb

Milan Roma

Luxembourg

Valletta Lisboa

Riga Prague

Cologne

Copenhagen

Vienna

0

20

40

60

80

100

120

140

160

180

0 2000 4000 6000 8000 10000 12000


15

Urban areas became major hubs for education,

innovation and knowledge-based economies

Cities are at the forefront of

technological and digital developments

HIGH SKILLED

WORKFORCE

KNOWLEDGE

INTENSIVE JOBS

HIGH-TECHNOLOGY

SECTORS

INNOVATION

AND R&D

HIGH QUALITY OF

INFRASTRUCTURE

DIGITAL

INFRASTRUCTURE

HIGH USE

OF INTERNET


There are still important heterogeneities in

education attainments across European cities

16

0

2

4

6

8

10

12

0

10

20

30

40

50

60

70

80

90

100

London

Oxfo

rd

Hels

inki

Sto

ckh

olm

Co

pe

nh

ag

en

Bilb

ao

Ma

drid

Pa

ris

Du

blin

Bru

sse

ls

Luxe

mb

ou

rg

Pra

gu

e

Vin

na

Viln

ius

So

fia

Wa

rsa

w

Bra

tisla

va

Ba

rce

lon

a

Bu

da

pe

st

Ath

en

s

Be

rlin

Ro

tte

rda

m

Ha

mb

urg

Buchare

st

Lis

boa

Stu

ttg

art

Rig

a

Mu

nic

h

Am

ste

rdam

Co

logn

e

Ro

ma

Zag

reb

Va

lleta

Mila

no

Tertiary education Upper secondary and post-secondary non-tertiary education

Less than primary, primary and lower secondary education Employment in technology and knowledge-intensive sectors (rhs)


… as well as in innovation and the quality of

infrastructures

RESEARCH AND DEVELOPMENT INVESTMENT


PUBLIC TRANSPORT SATISFACTION


Total R&D

expenditure

(%GDP)

Number of

High-tech

patent

applications

Proportion of

people who are

satisfied with

public transport

in their city

17


Differences in the digitalization variables are also

significant at regional levels

DIGITALIZATION LEVELS IN

THE EUROPEAN CITIES IN 2015

DIGITALIZATION LEVELS BY

EUROPEAN REGIONS IN 2015

18

Internet daily use Social networks use E-banking use E-Government use

89%

79%

74%

68%

63%

65%

58%

56%

49%

56%

87%

58%

58%

40%

28%

83%

60%

55%

48%

39%

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Nordics

Advanced Europe

Central Europe

PIIGS

Balkans

Internet daily use Social Networks use E-banking use e-Government use


19

Successful sustainable urbanization requires

responsive and accountable governments Fostering smart cities oriented policies will be key to attain urban sustainability

Smart

environment Infrastructure

(ICT)

Smart

people Social &

Human Capital

Smart

economy Competitiveness

Smart

governance Participation &

Decision Making

Smart

mobility Accessibility and

transport

Smart

living Quality of life

SMART CITIES

HUMAN FACTORS TECHNOLOGY FACTORS INSTITUTIONAL FACTORS


ANNEX


21

Urban population projections

The estimation and projection of the urban population by the United Nations is based on observed changes in the proportion of the population living

in urban areas by country for the period 1950-2050 in single-year intervals. It relies on the data produced by national sources.

Calculation of the urban proportion during the estimation period involves interpolation between recorded figures and extrapolation back to 1 July 1950

when the earliest recorded figures referred to a later date. The used estimation method projects the most recently observed urban-rural growth difference

by assuming that the proportion urban follows a logistic path that attains a maximum growth rate when the proportion urban reaches 50% and whose

asymptotic value is 100%. Thus, the hypothetical urban-rural growth difference (ℎ𝑟𝑢𝑟), was obtained by regressing the urban-rural growth difference

during any given time interval on the percentage urban at the mid-point of the corresponding time interval, for the 148 countries with 2 million or more

inhabitants in 2013. The resulting regression equation estimated on 1068 observations is as follows:

𝑛ℎ𝑟𝑢𝑟𝑡 = 0.030588 − 0.020508 ×PU

(𝑡+𝑛2

)

Where PU(𝑡+𝑛

2) is the proportion urban for the mid-point of the intercensal period between time t and t+n.

The obtained urban ratios were applied to the estimates and projections of the total national population of each country derived from World Population

Prospects: The 2012 Revision, so as to obtain the corresponding urban population for 1950 to 2050.

Estimates and projections of the population of cities with an estimated population of 300,000 inhabitants or more in 2014 were also calculated for the

period 1950-2030. The procedure is similar to the one described above for the proportion urban. However, in this case, instead of using the urban-rural

growth difference, the interpolation or extrapolation is based on the difference between the growth rate of a city and the growth rate of the population of

the rest of the country. The method used for projecting city populations is also similar to that used for urban populations. The city growth rate over the

most recent intercensal period is modified over the projection period so that it approaches linearly an expected value that is based on the city population

and on the growth rate of the urban population as a whole. The difference between the rate of population growth for the city and that for the total urban

population (𝑟𝑐𝑢) was estimated using the following regression equation, which was fitted to the data relative to 5305 cities located in the 232 countries or

areas analysed (28931 observations):

𝑛𝑟𝑐𝑢𝑡 = 0.0547143 − 0.003383 × ln(𝐶𝑡)− 0.3086313 × 𝑛𝑢𝑡− 0.001116 × (ln(𝐶𝑡) × 𝑛𝑢𝑡)

Where 𝐶𝑡 is the population of the city at time t, 𝑛𝑢𝑡 is the growth rate of total urban population, and (ln(𝐶𝑡) × 𝑛𝑢𝑡) is the interaction term between these

two variables.


22

BBVA Research Group Chief Economist

Jorge Sicilia

Macroeconomic Analysis Rafael Doménech

[email protected]

Global Macroeconomic Scenarios

Miguel Jiménez

[email protected]

Global Financial Markets

Sonsoles Castillo

[email protected]

Global Modelling &

Long Term Analysis

Julián Cubero

[email protected]

Innovation & Processes

Oscar de las Peñas

[email protected]

Financial Systems & Regulation Santiago Fernández de Lis

[email protected]

Countries Coordination

Olga Cerqueira

[email protected]

Digital Regulation

Álvaro Martín

[email protected]

Regulation

María Abascal

[email protected]

Financial Systems

Ana Rubio

[email protected]

Financial Inclusion

David Tuesta

[email protected]

Spain & Portugal

Miguel Cardoso

[email protected]

United States of America

Nathaniel Karp

[email protected]

Mexico

Carlos Serrano

[email protected]

Turkey, China & Geopolitics

Álvaro Ortiz

[email protected]

Turkey

Álvaro Ortiz

[email protected]

China

Le Xia

[email protected]

South America

Juan Manuel Ruiz

[email protected]

Argentina

Gloria Sorensen

[email protected]

Chile

Jorge Selaive

[email protected]

Colombia

Juana Téllez

[email protected]

Peru

Hugo Perea

[email protected]

Venezuela

Julio Pineda

[email protected]

Contact details:

BBVA Research

Ciudad BBVA

28046 Madrid (Spain)

Tel. + 34 91 374 60 00 and + 34 91 537 70 00

Fax. +34 91 374 30 25

[email protected]

www.bbvaresearch.com

BBVA Research Asia

43/F Two International Finance Centre

8 Finance Street Central

Hong Kong

Tel: +852 2582 3111

E-mail: [email protected]


23

Disclaimer

This document has been prepared by BBVA Research Department, it is provided for information purposes only and expresses

data, opinions or estimations regarding the date of issue of the report, prepared by BBVA or obtained from or based on sources

we consider to be reliable, and have not been independently verified by BBVA. Therefore, BBVA offers no warranty, either

express or implicit, regarding its accuracy, integrity or correctness.

Estimations this document may contain have been undertaken according to generally accepted methodologies and should be

considered as forecasts or projections. Results obtained in the past, either positive or negative, are no guarantee of future

performance.

This document and its contents are subject to changes without prior notice depending on variables such as the economic

context or market fluctuations. BBVA is not responsible for updating these contents or for giving notice of such changes.

BBVA accepts no liability for any loss, direct or indirect, that may result from the use of this document or its contents.

This document and its contents do not constitute an offer, invitation or solicitation to purchase, divest or enter into any interest in

financial assets or instruments. Neither shall this document nor its contents form the basis of any contract, commitment or

decision of any kind.

In regard to investment in financial assets related to economic variables this document may cover, readers should be aware that

under no circumstances should they base their investment decisions in the information contained in this document. Those

persons or entities offering investment products to these potential investors are legally required to provide the information

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The content of this document is protected by intellectual property laws. It is forbidden its reproduction, transformation,

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process, except in cases where it is legally permitted or expressly authorized by BBVA


24

This report has been produced by

BBVA Research Team

CONTACT DETAILS

BBVA Research

Ciudad BBVA

28046 Madrid (Spain)

Tel. + 34 91 374 60 00 and

+ 34 91 537 70 00

Fax. +34 91 374 30 25

[email protected]

www.bbvaresearch.com

Chief Economist,

Asia, MENA & Geostrategy

Álvaro Ortiz Vidal-Abarca [email protected]

Lead Economist,

Macroeconomic Scenarios

Miguel Jiménez [email protected]

Tomasa Rodrigo [email protected]

Manuel Cabezas [email protected]


EUROPEAN

URBANIZATION

TRENDS

URBANIZATION REPORT

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