I was very fortunate to attend CoreNet Global‘s Chicago summit last week, on two of the sunniest days the ‘windy city’ could offer its guests. I’m told that I was one of around 2,000 delegates, and there was certainly a full complement of leading end users and service providers in attendance.
This blog (‘part 1’) is based around the General Session 1, which opened the summit, in the spendour of the Ballroom at the Navy Pier. Greg Lindsay, an author and futurist, presented “The Way We’ll Live Next: New Frontiers of Globalization”.
New Frontiers of Globalization
Greg Lindsay looked at how urban living will be shaped by new frontiers of globalization, and took much of his fascinating material from his soon-to-be-published book, Aerotropolis. This is described as “a combination of giant airport, planned city, shipping facility, and business hub”. Essentially, cities built around airports at the centre – not on the fringes (or a long distance outside) as they most often have been designed in the 20th Century. And Mr. Lindsay gave several examples of mega-cities, current and planned…mostly in Asia of course!
Some interesting facts also emerged, that I certainly was not aware of. For example, Emirates Airlines is now the largest long-haul airline in the world – and it didn’t even exist 25 yrs ago! If Aerotropolis is to be believed, then this must surely make Dubai one of the most important cities now, and into the future? Not so much the economic ‘basket case’ that it has recently been perceived as being? But it appears to be in large part Chinese money that is driving this – at the 1.2km (yes, inside!) Dragon Mart (Dubai) Chinese buyers are trading in what Dubai World (its owners) call the “gateway for the supply of Chinese products in the Middle Eastern and North African Markets, offering Chinese traders and manufacturers a unique platform from which to cater to the needs of this sizeable market”.
In fact, Mr Lindsay talked of the “New Silk Route” – like the old silk route from Asia to Europe and the west – but now selling goods into the rich MENA region. This is immense – US$60bn china exports to the Arab world in 2010 alone.
But surely, I hear you ask, places like Dubai cannot possibly be leading cities of the future? You would be forgiven for finding limited ‘cultural satisfaction’ on a visit to Dubai over the last few years. But, like everything else, it is being imported….take Saadiyat Island, 500 metres off the coast of AbuDhabi, close neighbour to Dubai. The Cultural District is “set to become an internationally renowned arts hub, featuring the Zayed National Museum, Louvre Abu Dhabi, Guggenheim Abu Dhabi and the Performing Arts Centre”. OK, it is not going to replace the sophistication of Paris, the history of London, or the buzz of cities like Hong Kong and New York. But as a business and travel hub, UAE is ‘user friendly’.
Cities are hubs for knowledge and innovation
Cities are also built around intellect and knowledge though, right? Developers of a new ‘Aerotropolis’ cannot replicate this knowledge culture, can they? The intellectuals of Boston, Oxford & Cambridge, or the Sorbonne will surely not want to drink their fine wines in a desert? Well, once again, we may be wrong – NYU Abu Dhabi opened last year. And Mr Lindsay told us that NYU will open in Shanghai in 2013! Harvard Medical School is also in Dubai.
In turn though, and as another example of reliance of airports, the UAE is a major ‘exporter’ of medical treatment to Bangkok and Singapore. For example, Mr Lindsay described the Bumrungrad international hospital in Bangkok, where operations cost 70-80% less than in the USA. Its a global hospital, which “just happens to be in Bangkok”. Singapore is also on leading edge of healthcare, and “wants to be able to be a hub for this sector”. And in India, the Apollo Hospitals and Fortis Healthcare organisations are providing similar services.
“The brain drain is working in reverse” said Mr Lindsay, as Chinese and Indian doctors and medical staff see better opportunities for themselves in Asia.
How sustainable are these new cities?
Several examples were given, including the Sino-Singapore Tianjin Eco-City, around 150km from Beijing, where “man living in harmony with his fellow man, with the economy and with the environment”. Another fascinating one is Mentougou City, again near Beijing, which is described as “a gorgeous new “Ecological Silicon Valley.” Located close to the urban metropolis of Beijing, the new city will combine research institutes for modern science and innovation with environmentally friendly and eco-efficient urban living
“. Back in the UAE, there is the Masdar City in Abu Dhabi – the zero carbon city, and “one of the most sustainable communities on the planet”. It is a pioneer of new clean and green technologies. And Living PlanIT valley in Portugal, one of a new generation of “intelligent cities”.
What about all the air travel? How can an Aerotropolis essentially be ‘green’, when flying is central to the model?
This is the real question that I was left with, and talked about with a few friends after Mr Lindsay’s session. Before entering the room that morning, I would have argued the absolute opposite of many of Lindsay’s points! I guess I’m now compelled to read the book thoroughly, and make sure I understand his arguments properly.
I would have argued that we only moved from an agrarian society a couple of hundred years ago, through the industrial revolution in the western world. And I probably saw ubiquitous technology and fast communications as a way for people to ‘spread out’ again across the global landscape. And key to this – to travel less, and to communicate using new technologies, which become increasingly like ‘real meetings’. But, I am swayed at least in part by the idea that people need to be together – socially, and in business. And cities are the solution to that need for ‘togetherness’ that is lost in remote communications.
The answer, I guess, is that as human beings we are all different – some will desire the quieter life and clean air of rural life. They will push the boundaries of technology to facilitate living and working in this way. Whilst others desire the hustle and ‘buzz’ of city life. But they too will want their cities to be eco-friendly as far as possible.
Cities, travel, and the real cost (and price) of carbon
The unknown factor, and for me the ‘elephant in the Ballroom’ last Monday morning, was the real cost (and price) of carbon. Maybe I missed this point in Mr Lindsay’s lecture? But I dont think so.
In the UK, the government is leading the way, unilaterally (to the frustration of many businesses, it has to be said) to be the “greenest government” anywhere. Schemes such as the Carbon Reduction Commitment (CRC) have set a price for carbon trading, not just for the large energy-intensive industries, but “to cover all organisations using more than 6,000MWh per year of electricity”.
Currently, this is based solely on metered electricity use. But in the future one can see this being applied to air travel. If businesses had to pay for the real cost of carbon reduction required to mitigate their business air travel, flying would become very much more expensive…..this would kill the concept of the Aerotropolis as proposed by Mr Lindsay.
Maybe there is some middle ground..there usually is.
‘Third Places‘ now give themselves up for ‘Fourth Places’ – perhaps?
Lindsay went on to discuss the “disolving of physical plant”, where people come together when they need to, but we don’t need as much physical corporate-leased space. It was at a CoreNet summit in the US two or three years ago now that I first came across the term “Third Places“, a phrase and description first coined by Dr Ray Oldenburg. Third Places are “…nothing more than informal public gathering places. The phrase ‘third places’ derives from considering our homes to be the ‘first’ places in our lives, and our work places the ‘second'”
In Chicago, I heard the term “Fourth Place” for the first time – i.e., somewhere not at home, or the office, but actually designed for work (not like coffee shops, which are designed for coffee!). I have worked in one myself, regularly, for over two years – but I hadn’t heard the term before. Richard Florida may have come up with the term, in his article, where he said “Entrepreneurs and real-estate providers are increasingly recognizing the need for what I call Fourth Places—places where we can informally connect and engage and dialogue, but also where we can work. Places that freelancers or startups can use on an as-needed basis, or where travelers can set up shop temporarily”
What I heard from Greg Lindsay was a step on from this – where companies encourage workers to use these Fourth Places, and where “the entire point is to go outside”. He mentioned Eli Lilly & Company where they actually want to get people out into the outside world, to increase productivity. The company wants employees to meet people, not co-workers.
An example of a purpose-built Fourth Place is “The Squaire” at Frankfurt Airport, Germany. And its “New Work City”, aimed at providing a business facility for people with a common interest in great architecture & place.
An interesting idea, that fits more with my ‘ideal model’ than some of the larger eco-cities, is Mesa del Sol, a “place where work and home and school and fun are within walking distance of each other”…
In Albuquerque, New Mexico, it is designed for around 100,000 people, and designed as a hub for creatives. Its essentially a city where you work from home! But it fits the Aerotropolis model of Lindsay’s, as it is also “only around 6mins to the airport – people fly to LA to the office occasionally”. The city has electric cars, and people typically work at home 3 days/week, often with some time up in LA. It is a 40/50 year project….interesting to follow!
What does all this mean for business, and specifically to corporate real estate and workplace professionals?
Like the ‘paperless office’ and other such myths, we can safely assume that the “officeless portfolio” is not going to happen anytime soon – and probably never. All large organisations will have a core of offices, and the chances are that in 10 years time many of them will look much as they do today…and will not be in one of these new eco-cities or an ‘aerotropolis’.
However, what is clear is that the corporate real estate portfolio, and the workplace/IT manager’s remit, is changing in a big way around the edges of the traditional ‘core’. Unless my predictions of high carbon prices (via some form of taxation) take hold around the world – and we see little sign of that so far – business flights seem destined to continue. But at the same time, people want to work closer to home, travel less, and hence ‘third and fourth spaces’ look likely to become permanent parts of the work landscape. So there will continue to be some core HQ space, and a need to provide employees with an agile working support to make best use of working in a variety of settings – from office, to home, to ‘third places’ and a growing number of specialist ‘fourth places’.
Mr Lindsay quoted the late CK Prahalad, who said that there was ‘no such thing as emerging markets or multi nationals’. He talked about organisations either centralising OR decentralising, whereas Prahalad proposed that organisations do both. He proposed:
– 20 hubs, no head office; not ‘run’ from anywhere
– networking of offices
– shared central economies of scale, such as R+D perhaps; other elements, disperse as needed
Where will these hubs actually be?
One would expect that some of the examples of ‘aerotropolis’ given to us by Greg Lindsay will become leading ‘hubs’ of the future. Much, I suspect, will depend on the relative growth of global-regional economies. I certainly got the strong feeling once again that all the growth is in the east – in Asia Pacific. Will that actually be at the detriment of US and European leading cities of today?
A McKinsey report, “Urban world: Mapping the economic power of cities ” was quoted by Mr Lindsay. The report says, “Today only 600 urban centers generate about 60 percent of global GDP. While 600 cities will continue to account for the same share of global GDP in 2025, this group of 600 will have a very different membership. Over the next 15 years, the center of gravity of the urban world will move south and, even more decisively, east”.
Will more of our regional ‘hubs’ be in these cities in the South and East? Will some of our organisations in fact be taken over by Chinese or Indian multi-nationals? Will our US and European offices reduce in size, with a smaller workforce, whilst rapidly growing in China and Latin America?
None of us has the answer to these questions, of course. I only hope that more of the leading cities of the future spin off more places like Mesa del Sol as described above. Living a sustainable life (in all senses – ecologically, physically, and in social/family terms) must be our goal? Three days a week ‘at home’ or a local third place, half a day travelling, and a day in an ‘aerotropolis’ sounds like a better future ‘week’. Far better than the taxing schedule of daily commuting, 8-6 desk-bound working, and pollution that many of our corporate employees endure today.
Paul Carder (email@example.com)