Homes, Heterogeneity and Hull

By Richard Pickering, Head of Futures Strategy

May in March  In a speech that appears to have been well received on both sides of the Brexit debate, Theresa May has set out her vision for ‘the Road to Brexit’. Sending a clear message that decisions will be made in the interests of the nation and not ‘the privileged few’, the PM set out a series of guiding principles and specifics. On the specifics: no Norway nor Canada type deals, no Irish border, no North Sea border, an arbitration mechanism, no tariffs, no quotas, one set of approvals for goods, substantially similar regulatory standards, associate membership of EU Agencies, outside of both CAP and CFP and no passporting rights. All-in-all the PM is angling at a highly bespoke arrangement, which as she notes herself means it’s unlikely that we will get everything we want, ‘but there are some tensions in the EU’s position too – and some hard facts for them to face as well’.

Home v1.0   Recent moves by global tech companies to develop corporate communities have resulted in the creation of a new wave of campuses, where employees can live and work, addressing commute times and living costs, and increasing employer stickiness. To do that requires building some homes, and in the process Google appear to have got a taste for it. Their preferred solution is factory-built pre-fabs with RFPs reportedly being issued in the prospect of long term collaborations. The proposals are presently limited to homes for Googlers. However, the concept of integrating modular-built smart homes into new smart city fabric designed by the same company is (on one level) appealing. It eliminates the heterogeneity that creates complexity, making everything work a bit more smoothly. In the search for city level efficiency, it feels inevitable that design decisions will ultimately get pushed down to orderly algorithms. Cookie cutter efficiency vs vibrant chaos. Which would you choose?

Eco-city  The city of the future is often thought of as high density, urban landscape. This week a new type of smart city opens its doors in Florida: a low density eco-town called the Babcock Ranch. Having turned over 75% of its c. 92,000 acreage to being a nature reserve, the scheme boasts its own 75MW solar energy supply, a restaurant serving farm-grown produce and a school delivering a green-focused curriculum. However, it’s not a hippy commune. The development features fibre in every home, self-driving shuttles to traverse the estate, and a technology infrastructure arrived at in partnership with IBM. All of this is privately delivered. For those in government looking for potential new town delivery vehicles, or private land owners with large extra-urban estates, this might be one worth a watch.

The economics of MIPIM  A bit like a snowball, when things grow in scale they can develop a gravity that increases their size further until they develop a run-away lead. Economists would call this ‘same-side network effects’. MIPIM is a good example of this – people sign up to go because they know that other people will be there, and so on. This is good for the industry because it creates a density of interactions, and it is fantastic for the organisers for more obvious reasons. The challenge arises when spiky demand exceeds limited supply and local pricing soars. In a free market, rational buyers stop buying when price exceeds utility. As our industry evolves, is it time for MIPIM to call time on Cannes? If so, can I humbly suggest an alternative coastal city with an attractive marina, excellent seafood and much more accommodating rates: www.hull2017.co.uk/visit/


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