Why Do Cities Hold Such Great Potential as Engines of Economic Growth

294 Words2 Pages
The city has much more potential to be an engine for economic growth because unlike the rural area, the city is always productive. The city has, over the years also managed to sustain and supplement high urban productivity for the country’s economic growth This is because more than half of the population of many countries resides in cities as a result of that more human resources are available to generate wealth in the city which leads to economic growth. In addition to that a city also has the adequate infrastructure needed to economic growth. Challenges and opportunities for development posed by the informal economy The informal economy is also known as informal sector. Previously it was a by –product of the over population. Like any other sector there are challenges and opportunities that arise. Some of the challenges are that people operating in the informal economy are exposed to poor infrastructure such as transport, thee is a lack of proper working premises and poorly developed markets. Resources such as the latest technology are usually limited because of capital and insufficient funds don’t allow for further investment in the informal economy. As a result of this there is hindrance to the growth of the economy as a whole. However, there are some opportunities in the informal sector that benefit the development of a country. Firstly an opportunity in the formal sector would be that it generates income for low-income families, especially those migrating from the rural areas. Secondly, it keeps low-income groups occupied with jobs and housing, in the absence of local governments abilities and resources. Lastly despite some of the major challenges mentioned above, when one manages to thrive operation in the informal economy it could contribute to increased economic
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