Firms are being attracted to cities by infrastructure, availability of workers and being close to other companies, research found.
The Centre For Cities think-tank said 59% of all jobs in Britain are now based in cities, even though they only make up 9% of land across the country.
In contrast, rural areas account for over half of land, but just 10% of jobs.
Businesses trading goods or services at home and abroad are increasingly choosing to locate in city centres, providing 76,000 more jobs since 1998.
The think-tank urged the government to support growth in urban areas as a way of driving economic activity across Britain.
Alexandra Jones, chief executive of Centre For Cities, said: "National leaders have come a long way in the past six years in recognising the diverse roles that different places, and cities in particular, can play in generating growth and contributing to the national economy.
"It's crucial that the new government continues to build on this progress, if it is to achieve its vision of raising prosperity for people across the country.
"A strategy to extend economic opportunity and prosperity will need policies that work with the grain of the national economy and exploit its strengths.
"That means taking advantage of the increasingly important role that cities play in generating jobs and growth, and the opportunities this creates for people living in surrounding areas, as well as supporting the long-term shift towards knowledge-based services in Britain and other developed economies."
Employment minister Damian Hinds added: "The jobs market, including in our cities, is in a position of strength thanks to a record employment rate, and we're seeing around 740,000 vacancies at any one time.
"Employment is up across the UK with every region seeing a rise in the number of people in work over the last year.
"Our task now is to build on this success and support more people of all abilities and backgrounds into work so they can reap the benefits that come with having a job."
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