We’ve established
earlier that the primordial city latches onto an elementary level of energy,
i.e. food through the agriculture, the rivers, oceans as well as valuable
metals in mining towns. Initially there would
be a swarm of smaller companies leeching off the primary flow of resources into
manufacturing engines; unfortunately, not all of these companies will survive
and oligopolies quickly take form when weaker competitors die off, leaving a
few primary players to completely dominate the source.
Take away the source of “energy” and we have a stark reminder through the island of Hashima, Japan (HQ to Bond’s nemesis in Skyfall), once the most densely populated area per sq/km with 5,000 people living within a 150m x 450m area due to its coal mining operations; Hashima was soon abandoned when coal ran out in the 1970s.
Island of Hashima, Japan |
Inside the abandoned city |
For more on the city, checkout this blog by messynessychic.
In the modern city, the
whole notion of living off a single “source” of value will lose relevance. Manufacturers
can buy raw materials from other cities, and food as well as supplies can be
shipped from locations where it is cheaper to grow and produce.
The following are crucial criterion in order for a city to succeed and grow.
A) The final products and services need to be exported (internal demand is insufficient)
Arbitrage has to
happen – where revenue and margins returned outweighs the cost of production
and manufacturing of the product. We use the term product interchangeably with services;
and the raw material for services comes from people of a certain skill set to
deliver the service at the quality required to succeed.
Only then can
ancillary services survive to support these larger production and manufacturing
businesses because they live off the excesses of the manufacturing process.
More importantly, it is crucial for the ancillary services to make the primary
businesses successful.
B) Decision nerve centres generates gravity between businesses
Modern cities continue
to exist sans natural resources because they are headquarters, regional centres
and/or country representative branches. The city then becomes an aggregation of
decision making nerve centres of various productions and manufacturing organizations;
and the interplay of communications and consumption between the businesses then
sustains value within the city.
This is essential as
the economics of logistics and communications allows cross selling of services
to occur more easily. The analogy of nerve centres are used because nerve cells
are clustered and strengthened the more the brains computes and uses a
particular area of the brain.
In short, people come
together because everyone is there!
C) Achieving the Critical Mass of Flow
Which brings us to a
conundrum, how do we achieve critical mass; within the context of artificially
created cities when nothing is there in the first place; taxation policies,
cheap office buildings, great logistical and communications infrastructure
comes to mind including the required people power to manned the fancy empty
buildings. But having all this secret sauce does not make a good restaurant
without good marketing; not to mention the key to any real estate investment –
location, location, location.
So city buildings have
several options:-
- Create one as an extension to the existing city, allowing the flow of value from the current city to be enhanced with the new. The Iskandar region in Johor, Malaysia is a good example as Singapore can become the staging ground to international customers. Assuming again, that the macroeconomics of Singapore can survive the tribulations of the recent economic crisis. More importantly, the satellite city needs to add symbiotic value instead of existing as a parasitic leech.
- Stands independently and hopefully becomes a beacon to businesses and consumers. For the consumer we see entertainment and retail centres, and for businesses, the traditional attraction of the nation’s natural resources comes to light.
Regardless of the
options, the global economy needs to be growing before value can flow into a
new location, naturally immediate economic energy needs to start from the
nation of the city. Otherwise it begets an even crucial question, would a multinational
choose to relocate their business from an existing mecca to a new one
considering that there are no surpluses to spill over.
D) Supplying the Soul of the City
As we strip away all
the outward fittings of high tech building infrastructure and logistics, what
remains are the people. The city needs to be cognizant on the type of talents
that needs to populate the new environment. Are we creating and aggregating low
end factory workers or are we producing planners, managers, technologists,
engineers and innovators. If that cannot be sourced from the locale, the city
has no choice but to lower immigration laws and allow influx of foreigners that
exhibit the qualities required for the city to succeed.
It is the soul that
allows value to be created, and foremost, value that are generated without
resorting to siphoning the natural resources are the most admired. This can be
seen from the fields of biotechnology, medicine, electronics and information
technology. If the country is still stuck in the rut of manufacturing, then it
must persist to continuously shave off waste and innovate to produce products
that are more efficient, enduring and better than the competitors whilst being
economically more competitive. The whole notion of productivity, discipline and
anti-corruption is fundamental to the issue.
E) Working against the tide of
technology
We have seen hints of
the surging technological tidal wave in the form of teleworkers. Organizations that
outsource work to individuals versus corporations; this creates a negative flow
that pushes against the aggregation of people into city centres as
organizations no longer require an army of individuals to be physically
location together for productive work to occur. Payables processing happens
offshore while receivables are directly debited from customer accounts. Payroll
and tax administration gets reduced down to mere mouse clicks while legal firm
from 5,000 km away tightens up the contracts.
The city of tomorrow
may be smaller and stretched out versus sky scraping monoliths that extend the
corporate ego. Organizations will migrate to building campuses and research
centres as the focus shifts towards innovation versus processing administrative
work. We’ve seen this happened successfully to give birth to the Toyota Prius
as they crammed substantial workforce within a wide open space – “Obeya” to heighten communication and
productivity.
To end, we covered 5
criterions for success, the ability to export products and services generated
from the city, creation of a nexus for trade to happen through establishment of
decision centres i.e. headquarters, attaining critical mass, supplying talents and
lastly working with technology and shifting the paradigm of tall skinny buildings.
The table below underscores the evolution of tomorrow’s city.
Analogues
|
City of Today
|
City of Tomorrow
|
Manufacturer Plant
|
Processes and Produces Products
|
Outsourced to cheaper nations, with clear build and quality specifications
|
Head quarters
|
Processes
Administration
|
Showcase for
customers, vision of the company’s potential and future. A mecca for business
to occur.
|
Research Centres
|
Small cramped underfunded facilities that double as a warehouse
|
Campus wide facilities that co-exist with top management to allow
seamless communication and flow of ideas
|
No comments:
Post a Comment