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The world after the corona crisis: has urbanisation come to an end?

Cities have been most affected by the corona crisis. And they will still need time to fully recover. However, the megatrend of urbanisation will continue, according to Next Generation Research analyst Carsten Menke.

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Carsten Menke: "Many of the Covid-19 hotspots can be found in densely populated cities – where people are living together, working together. Yet we don’t think that this crisis is going to slow or even reverse the trend of urbanisation – despite the fact that currently many people are working from home. Cities are still the growth engines of the global economy. They have been suffering from social distancing and turned into sleeping giants so to speak. Going forward, however, they are going to benefit from social interaction again, which makes them so powerful.

Working from home: a new reality?
Some say that working from home will be the ‘new normal’, that we will see many empty offices in the city centres. We disagree, because we think that even though working from home provides people with greater flexibility, it also blurs the boundaries between private life and work life. Your computer is always there, you can work late at night, you can work early in the morning, the kids are there, the structure is missing. In the office, you just bump into people, you have a short chat over topics which you would not necessarily discuss by email or by phone. So from our point of view, the mixture of working in the office and working from home will be the ‘new normal’. Companies will have to provide greater flexibility for their employees, including a proper work-from-home setup in order to compete for top talents.

Traffic jams are back
Despite the fact that many people are still working from home, traffic during the week has increased again. The congestion levels in many cities are back to pre-crisis levels, which at first sight might be surprising. This is quite clearly a consequence of the reluctance to use public transport, for safety reasons. We think this is going to be a temporary phenomenon. Once we have adapted to a ‘new normal’ of being more cautious, of keeping a little bit of a distance, we will feel comfortable being on the train or on the subway again. The traffic situation will normalise. 

Longing for the human touch
When it comes to our private lives, we don’t expect major changes. We are one of the most social species on this planet. We need our connections for our health and well-being. This is the reason why we will go out again, meet friends and be back in the restaurants. Actually when looking at restaurant reservation data, we can see that in those cities, which have lifted the lockdown measures, people are coming back. Of course, the numbers are still down, about 50% year-on-year, but people are returning. For the restaurant business this is obviously still very challenging, because they can just serve half of their guests. 

Little things make a big difference
During the lockdown phase, we have realised how nice and comfortable our homes actually are. So instead of being out each and every weekend, we just reduce that, we stay home more often, we invite friends, we show greater gratitude for the little things in life. We maybe even consume a little more consciously, having realised how little it took to turn our lives completely upside down.

Special Report: Future Cities