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By: Iryna Sychyk

    In 2007, an analysis of contiguous night time light emissions, captured on satellite images, identified around 40 major conurbations in the world. Each one was estimated to have an economic output of at least US$100 billion. Two of the world’s most prominent were revealed to be BosWash in the USA (stretching from Boston to Washington) and Blue Banana in Europe (stretching in the form resembling a banana from Leeds in the UK to Milan in Italy). Both BosWash and Blue Banana would rank as the world’s fifth largest country in terms of GDP in 2016, and the following analysis makes a quick overview of their potential market sizes.

    World’s Two Major Megalopolises

    Source: Euromonitor International

    World’s major megalopolises compared

    Historically, the success of both BosWash and Blue Banana is derived from beneficial geographical conditions (access to sea and navigable inland waterways) and these regions being first recipients of the fruits of the Industrial Revolution, which comprised new technologies, methods of transport and management. However, key to long-term viability of an economic system is its ability to adapt to changes. As manufacturing declined and knowledge-intensive activities rose, BosWash and Blue Banana adjusted slightly differently.

    With a GDP per employee of US$143,000 in 2015, BosWash today stands out as a large and productive economy, which boosts household incomes and discretionary spending in turn. New York boasts concentration of finance and creative industries. Boston specialises in biotech. In addition, the megalopolis is home to two of the most advanced tech hubs worldwide, namely the Dulles Corridor in Washington and Route 128 in Boston. The latter in particular, as found by researchers, thrives on the adaptability of the region’s strong networks of entrepreneurs, venture capitalists, technologists, and talented university graduates.

    Undoubtedly, Blue Banana’s economy has many strengths too, as revealed by its high global integration. Rotterdam and Antwerp are among the top 20 ports worldwide, while Heathrow/London, Frankfurt am Main and Schiphol/Amsterdam are among the top 15 global airport hubs. European Union’s seat of power is also located here. However, the concentration of highly productive business services outside of London, Frankfurt am Main and Zurich is limited.

    A more subtle, yet nonetheless valid factor that likewise stands behind Blue Banana’s lagging economic performance in comparison to BosWash is the linguistic and cultural barriers that characterise the former. The mind-set of the residents of Europe’s most advanced conurbation is still constrained largely within national boundaries rather than focused on regional cooperation. This inhibits communication and exchange of ideas, which in turn lowers the potential for creativity and labour productivity.

    World’s Two Major Megalopolises Compared: 2015

    Source: Euromonitor International

    Note: All indicators are based on tier 1 cities only in the respective megalopolis, as indicated in the graph

    Why care about megalopolises?

    In this brief overview, the emphasis was put on the economic role of megalopolises. This comparison is also useful for business strategists too, as it puts a new angle on how to draft business plans for specific territories – the bottom-line is that instead of focusing on country-level analyses, analysing large conurbations (several metropolitan areas combined) can be more useful. Such analysis would put focus on economically well-integrated territories, which benefit from high labour mobility, population density and highly developed infrastructure. Having a common marketing, logistics and development strategy for such areas would make a lot of sense for balanced business expansion.

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