By Richard Pickering, Head of Futures Strategy
Protectionism As the globe descends into a protectionist tit-for-tat, our nations might seem further apart than before. However, the distance between us continues to reduce, physically, digitally and culturally. As of this year, you can travel to Australia on a non-stop flight. Next year will mark the test run for Boom Supersonic’s test flight – a commercial airliner which will travel from London to New York in 3 hours 15 minutes (quicker than Concorde). Mobile video calling, once hideously expensive and now free, allows us to connect visually with friends and colleagues from around the world, (in 2017, 17 billion video calls were made using Facebook Messenger alone). And globalisation, M&A and third world development is reducing the commercial and cultural differences between nations as brands increasingly transcend domestic boundaries. The national barriers which separate us have, due to inevitable globalisation, become more artificial than the commercial markets and brands that we have in common. With taxes and public spending largely measured and applied at a national or local level, it is human nature to want to appropriate as much of that for ourselves as possible. However, putting trade barriers into a world which has outgrown nation states has, at best, a feeling of futility.
Cashless society A stark reminder of our reliance on digital means of payment was provided last week, when a hardware failure disrupted Visa transactions for five hours. However, we are no longer solely reliant on major credit cards to make digital payments. An estimated 25% of US smartphone users will use their mobile phone to make an in-store payment this year (with Starbucks’ mobile payment app leading the way). In China, Alibaba’s Alipay can be used for pretty much everything from in-store and online payments, to peer-to-peer cash transfers. In a watershed moment for the end of cash, another Chinese trend being imported to the UK is the ability to pay buskers digitally. Savvy musicians in the UK are now accepting fixed-rate contactless payments. Meanwhile, their Chinese counterparts (and indeed beggars) are using scanned QR codes to facilitate mobile payments. With banks losing out on the typical 2% transaction charge, they may well have reason to be concerned, particularly as large single retailers such as Amazon and Alibaba gain market share and roll out proprietary apps.
Sensor city Smart cities typically evoke large public infrastructure initiatives. However, there are other ways in which smart tech can be used to improve the metropolis of the future. The massive boom of smartphone ownership has led to the creation of new open and decentralised data sets, which can be used to map the activities of their users. In the wrong hands this might lead to dystopic outcomes, (watch the movie: ‘The Circle’). Conversely, empowering citizens with data should result in increased democracy. In Barcelona, residents of a busy public square used sensors developed by the global ‘Fab labs’ network to monitor noise levels on their balconies. The resulting evidence base persuaded the local authority to close down activity after 23.00 and to reschedule bin lorries. The same technology could be used to measure localised pollution levels and other environmental factors. In the real estate industry, we look to workplace sensors as a productivity solution; however, these could equally be applied externally to improve the livability of large development projects. Providing a means for developers and estate managers to assess the quality of their environments justifies investment in place and is validated by statistics that can then be used in marketing.
Arches and lock-ups As consumers shift away from commercialised products and towards artisanal goods, ‘maker industries’ looking for quirky spaces are increasingly in vogue. Rather inevitably then, the UK’s rail arches have gone the way of Shoreditch’s warehouses, where the gritty vernacular of the industries that previously inhabited them (mechanics, metal workers) has given way to a new breed of occupier (makers, microbrewers, nightclubs). In real estate terms this translates to increased rents; and for Network Rail, which is marketing its portfolio of arches, it makes for a more attractive price. Displaced tenants might not like this – but that’s capitalism. In searching for new venues however, there might be a solution. A freedom of information request last year by Property Partner revealed that of 53,640 council owned lock-up garages in London, an astonishing 41% (say 22,000) were vacant. The press leapt on the opportunity to suggest converting these into 16,000 homes. However, repurposing units to help small businesses would seem to be a more realistic and achievable ambition with benefits all round.
Search and shelter Mary Meeker last week presented her annually awaited Internet Trends report. Top of the agenda was that smartphone ownership – a key driver of global internet usage – has started to reach saturation point. Voice search is seen as the next big thing. Importantly, rates of adoption of, and disruption by, new technology are accelerating, on account of the globalisation of brands and platforms (compare 80 years for the largescale adoption of the dishwasher vs 10-years for the consumer internet). The report strays into the subject of spending on ‘shelter’ (grouped with pensions, insurance and healthcare as the necessities on which US consumers are spending an increased share of wallet). Meeker compares falling grocery prices (driven down due to innovation) with rising shelter (real estate) costs, where there has been comparatively little innovation, and suggests that this is not sustainable. She hypothesises that users of real estate will, at a growing rate, look to contain such costs by ‘increasing the utility of the space they have’ rather than expanding. Airbnb is cited as an example of this, with 57% of hosts using the earnings to stay in the home that they are listing, rather than as a pure investment.
Taking the biscuit In today’s health obsessed society, National Biscuit Day, celebrated last week, has almost become un-PC. Indeed, our consumption of biscuits as a nation has been falling since 2013. Nevertheless, the biscuit remains an important workplace productivity, retention and marketing tool. In a study by (biscuit manufacturer) Thomas J. Fudge, 40% of respondents reported feeling disappointed when they attended a meeting where no biscuits were provided. Furthermore 25% of respondents were reportedly more likely to close a deal in the meeting if provided with the right type of biscuit, (that being shortbread of course, whereas pink wafers were considered ‘too outrageous for business’). Meanwhile, a study by Holiday Inn found that 80% of people thought that boardroom biscuits improved the quality and outcome of meetings, with those in the legal sector most influenced by biscuit quality. For the record, here at C&W we offer clients a suitably unhealthy variety of biscuits in our meeting rooms (including both shortbread and my favourite – jammy dodgers), and we tend to be pretty good at closing deals.