Over the last 30 - 40 years marks major urban development and urbanization trends around the world, because it includes the period during which much of the world population rather chose urban location as their place of living than a rural area. Today, more than 50 percent of the planet's 6.78 billion people have chosen to live in cities and towns rather than in villages and rural areas. Consequently, one of the most pressing issues, not only in the world, but also in Latvia is the enhanced competitiveness of Latvian cities and towns and its role in urban development. It could not be unambiguously stated who determines urban development and their competitiveness - economists, town development planners or mainly politicians