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EUROPE URBANIZATION TRENDS
EUROPEAN
URBANIZATION
TRENDS
URBANIZATION REPORT
BBVA Research
EUROPE URBANIZATION TRENDS
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
EUROPE URBANIZATION TRENDS
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
EUROPE URBANIZATION TRENDS
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
Note: See the annex for further information about the methodology
EUROPE URBANIZATION TRENDS
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
Urban population (% of total)
2000 2015
EUROPE URBANIZATION TRENDS
… 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
Urban population (% of total)
Labor
pro
ductivity
(US
D P
PP
)
Labor
pro
ductivity
(US
D P
PP
)
Urban population (% of total)
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
EUROPE URBANIZATION TRENDS
… 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
(scale ranges from 1 to 7, best)
Urban population (% of total)
Technolo
gic
al adoption
Glo
bal C
om
petitiveness Index
Urban population (% of total)
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
EUROPE URBANIZATION TRENDS
There’s a significant technological gap between
the advanced and the developing Europe
8 Source: BBVA Research, Weforum
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
EUROPE URBANIZATION TRENDS
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
Urban population (% of total)
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
EUROPE URBANIZATION TRENDS
… and with the quality of infrastructures and workforce
10 Source: BBVA Research, Weforum
GLOBAL QUALITY OF
INFRASTRUCTURES IN 2015
(scale ranges from 1 to 7, best)
Urban population (% of total)
EDUCATION AND TRAINING IN 2015
(scale ranges from 1 to 7, best)
TRANSPORT INFRASTRUCTURE IN 2015
(scale ranges from 1 to 7, best)
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
EUROPE URBANIZATION TRENDS
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
(scale ranges from 1 to 7, best)
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
EUROPE URBANIZATION TRENDS
Regional
Analysis xxxx
The role of
cities
EUROPE URBANIZATION TRENDS
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
Note: See the annex for further information about the methodology
EUROPE URBANIZATION TRENDS
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
EUROPE URBANIZATION TRENDS
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
EUROPE URBANIZATION TRENDS
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)
EUROPE URBANIZATION TRENDS
… as well as in innovation and the quality of
infrastructures
RESEARCH AND DEVELOPMENT INVESTMENT
IN THE EUROPEAN CITIES IN 2015
PUBLIC TRANSPORT SATISFACTION
IN THE EUROPEAN CITIES IN 2015
Total R&D
expenditure
(%GDP)
Number of
High-tech
patent
applications
Proportion of
people who are
satisfied with
public transport
in their city
17
EUROPE URBANIZATION TRENDS
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
EUROPE URBANIZATION TRENDS
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
EUROPE URBANIZATION TRENDS
ANNEX
EUROPE URBANIZATION TRENDS
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.
EUROPE URBANIZATION TRENDS
22
BBVA Research Group Chief Economist
Jorge Sicilia
Macroeconomic Analysis Rafael Doménech
r.domenech@bbva.com
Global Macroeconomic Scenarios
Miguel Jiménez
mjimenezg@bbva.com
Global Financial Markets
Sonsoles Castillo
s.castillo@bbva.com
Global Modelling &
Long Term Analysis
Julián Cubero
juan.cubero@bbva.com
Innovation & Processes
Oscar de las Peñas
oscar.delaspenas@bbva.com
Financial Systems & Regulation Santiago Fernández de Lis
sfernandezdelis@bbva.com
Countries Coordination
Olga Cerqueira
olga.gouveia@bbva.com
Digital Regulation
Álvaro Martín
alvaro.martin@bbva.com
Regulation
María Abascal
maria.abascal@bbva.com
Financial Systems
Ana Rubio
arubiog@bbva.com
Financial Inclusion
David Tuesta
david.tuesta@bbva.com
Spain & Portugal
Miguel Cardoso
miguel.cardoso@bbva.com
United States of America
Nathaniel Karp
Nathaniel.Karp@bbva.com
Mexico
Carlos Serrano
carlos.serranoh@bbva.com
Turkey, China & Geopolitics
Álvaro Ortiz
alvaro.ortiz@bbva.com
Turkey
Álvaro Ortiz
alvaro.ortiz@bbva.com
China
Le Xia
le.xia@bbva.com
South America
Juan Manuel Ruiz
juan.ruiz@bbva.com
Argentina
Gloria Sorensen
gsorensen@bbva.com
Chile
Jorge Selaive
jselaive@bbva.com
Colombia
Juana Téllez
juana.tellez@bbva.com
Peru
Hugo Perea
hperea@bbva.com
Venezuela
Julio Pineda
juliocesar.pineda@bbva.com
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
bbvaresearch@bbva.com
www.bbvaresearch.com
BBVA Research Asia
43/F Two International Finance Centre
8 Finance Street Central
Hong Kong
Tel: +852 2582 3111
E-mail: research.emergingmarkets@bbva.com.hk
EUROPE URBANIZATION TRENDS
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
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performance.
This document and its contents are subject to changes without prior notice depending on variables such as the economic
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EUROPE URBANIZATION TRENDS
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
bbvaresearch@bbva.com
www.bbvaresearch.com
Chief Economist,
Asia, MENA & Geostrategy
Álvaro Ortiz Vidal-Abarca alvaro.ortiz@bbva.com
Lead Economist,
Macroeconomic Scenarios
Miguel Jiménez mjimenezg@bbva.com
Tomasa Rodrigo tomasa.rodrigo@bbva.com
Manuel Cabezas manuel.cabezas.pedrayes@bbva.com
EUROPE URBANIZATION TRENDS
EUROPEAN
URBANIZATION
TRENDS
URBANIZATION REPORT
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