By Richard Pickering, Head of Futures Strategy
A United Kingdom? In a talked-up speech delivered at the Policy Exchange think tank this afternoon, Boris Johnson has set out a plea to Remainers to get on the Brexit bus. His narrative was carefully chosen to respond to the concerns of those favouring Remain, describing Brexit as ‘the great liberal project of the age’, and continuing to be Europeans ‘both practically and psychologically’. Why has he made this speech? It could be over fears that colleagues, such as Philip Hammond are steering the UK towards a soft Brexit or a new referendum. There may be some truth to that. However, at least as plausible is that Boris is mobilising his campaign to become PM by positioning himself as a bridge builder. Favourite to lead the country before the referendum, his reputation was severely tarnished by a slogan covered bus, and by slinking into the distance when called upon to deliver his promises. Today’s speech felt contrived and lacking in substance; however one should not count out the mercurial Johnson whose odds to succeed May have been building since the start of the year. Did today mark the starting gun in that debate?
Planes, Trains & Automobiles Time is precious and economically valuable. Hence, when new time-saving infrastructure is introduced, value chains become disrupted. What should we make of the direct Eurostar link from London to Amsterdam announced this week? We analysed the time that it would take to travel from C&W’s City office to our Amsterdam office door-to-door by both plane and now train. The result? The plane journey is about two hours quicker in total. Should you therefore take the plane? No. Time is only relevant when you think about utility. The plane journey has over double the amount of downtime during which it would not be realistically possible to work (even more if you need an internet connection). Hence, for businesses, the train is the more productive option. For those needing to get home in time to celebrate Valentine’s Day this evening (just remembered?), you may reach a different conclusion, but that is also a question of utility. Increasingly we will find that the office is not the only place to work, and how we incorporate alternative working environments into our business processes is likely to have a significant bearing on productivity.
Going Underground The continued pressure to densify some of the world’s big cities brings with it upward pressure on land values. With outward expansion often not feasible due to sustainability or cost of distance reasons, the only way tends to be up. Or increasingly also down. Digging out underground space is costly and takes time (both not helpful in development appraisals); but as land values rise, so the viability of digging increases. The spaces below our cities are a natural home for infrastructure and utilities, but are increasingly considered for a wider range of uses. In response, Singapore is preparing its first underground Masterplan and has restricted private land rights to the level of existing basements. These and similar plans could provide blueprints for the next wave of cities that seek to ameliorate some of the ills of the past. In particular, it feels unlikely that the deliberately planned city of the future will have any transport movements above ground. Underground homes will, however, hopefully be a more distant prospect.
Shipping with Amazon In an indication of what might be to come, Amazon has started to offer its Prime customers delivery within two hours from selected Whole Foods stores. If rolled out further, this will pile pressure on other supermarkets to do the same. The principal parenting benefit that Amazon confers on Whole Foods rests in its logistics capabilities, and it would seem that this could give Whole Foods a competitive advantage in its core market. However, perhaps the bigger news is that Amazon is reportedly launching its own logistics operation, ‘Shipping with Amazon’. This would allow it to carry out deliveries for retailers which don’t currently sell through its platform, presumably at a price that would unsettle established competition in the courier market. Increasingly, retail and logistics cannot be looked at in isolation of each other, nor can retail and Amazon.
Be my Valentine In a triumph for offline over online, sales of Valentine’s Day cards are growing at a rate of 20% pa, according to retailer Clinton Cards. Some have attributed this to the rise of single people (according to the ONS more than 50% of women over the age of 16 are unmarried for the first time ever). However, implicit in this contention is that married people feel less obliged to give a card. Having had a long ‘discussion’ with Mrs P. this morning over the acceptability of presenting one’s card in the evening as opposed to the morning, I can only say that from personal experience this is not true. Furthermore, if you don’t understand why physical cards beat text messages and Facebook posts, then I suspect that your problems have only just begun.