Over the next decade, a massive wave of urbanisation across the emerging world will quadruple the size of the global “consumer class” and result in emerging markets driving as much as three-quarters of world economic growth.

This is clearly an exciting prospect for business leaders searching for new growth opportunities. However, as businesses allocate resources and develop strategies, the concept of “emerging markets”, or even groups of high potential countries such as Brics (Brazil, Russia, India and China), is no longer particularly helpful. Executives need to develop a more granular view of the world, one that goes beyond broad groupings — or even individual countries — to focus on cities.

Cities are where the growth is occurring. By 2025, urban consumers could spend an additional $20tn a year — not counting an extra $10tn of physical capital investment to meet the needs of expanding urban populations.

The pace and scale is historic: China and India, with a combined population of more than 2.5bn, doubled their GDP per capita in 12 and 16 years respectively. By comparison, Britain started its industrial revolution in the 18th century with less than 10m people and took more than 150 years to double its GDP per capita. While it is true that emerging markets is where the growth is, the term emerging markets is not a helpful unit for resource allocation strategies.

Research by the McKinsey Global Institute indicates that 440 emerging market cities — very few of them “megacities” — will account for close to half of expected global GDP growth between now and 2025.

Many of them may be unfamiliar. Take Foshan, Porto Alegre and Surat — cities that are unlikely to be high on the priority lists of many western executives, though each has more than 4m inhabitants and a vibrant base of consumers. Surat, 180 miles north of Mumbai, accounts for about two-fifths of India’s textile production. Foshan, on the Pearl River in Guangdong Province, is China’s seventh largest city in terms of GDP. Porto Alegre is capital of the fourth largest state in Brazil.

Over the next decade, each of these cities will contribute more to global growth than Madrid, Milan or Zurich.

Resources are likely to be allocated incorrectly if urbanisation-driven growth is pursued through the lens of emerging markets or a grouping of countries, such as Brics. Bangkok and Jakarta have greater growth potential than Delhi. Ho Chi Minh and Lagos offer more opportunity than Mangalore and Urumqi. S漀 Paulo, Beijing, Rio de Janeiro and Shanghai rank highest in a targeted analysis for market growth for laundry products but Lagos, Dar es Salaam and Dhaka have the highest numbers of young entry-level consumers. In China, household consumption of yoghurt is significantly higher in Wuhan than in Jinhua or Hefei.

Until quite recently, most executives did not pay sufficient heed to cities; indeed, a 2012 McKinsey survey showed that more than 60 per cent regarded cities as an irrelevant unit of strategic planning. That is now starting to change. Companies that adopt a strategic city-focused approach may gain early-mover benefits. For some, developing better insights into demographic and income trends — such as an understanding of the urban areas where the population of older, wealthier consumers is growing most rapidly — will be sufficient. Others may need to dig deeper, learning the market dynamics of specific products in target cities.

As the locus of global economic activity shifts, and as the western world ages, companies should be aware of the growth dynamic that is playing out in cities in what we still refer to as “emerging markets”. Business leaders who give their strategies and their resource allocation a granular city dimension could find themselves in a better position to allocate investments effectively and to seize more readily the growth opportunities at hand.