Recent events have had a profound impact on business, economic growth and cities. What new behaviours and trends are emerging? Are these new? Will any of them stick? What’s next for cities?
Our Managing Director, Gemma John, explored some of the emerging trends in conversation with Chris Choa at AECOM to ask - so what for cities, and in particular, urban development and infrastructure?
- Localising trends were already in place before COVID-19.
- Recent economic disruptions have drastically interrupted long supply chains.
- Global travellers are actively looking for local experiences.
- Will refocusing on the local achieve more resilience in the urban environment?
- What will be the implication for urban development and infrastructure?
1. Covid-19 is rewriting the rules
We’ve developed an appreciation of the value of local amenities, we’ve come together to find a way forward through the crisis; and we’ve reached a new mindset - called the Great Reset. So, what’s next? Will we see a slow down in urbanisation? Will we see some cities continuing to grow, whilst others falter?
2. What are the precedents?
Let’s think about what’s been going on over the last few decades.
The 21st century was widely advertised as the epoch of the city. By the end of 2005, half the world’s population was living in cities. This is projected to rise to two-thirds by 2050. Since 2005, major metropolitan areas have experienced a slowdown in growth—almost halving their aggregate growth rates. Major metropolitan areas were the beneficiaries of domestic migration from 2010 to 2015. Yet that movement reversed afterward, when these metro areas began losing migrants. In recent years, young adult movers—who comprise an outsized share of all movers—were more willing and able to locate to smaller areas in all parts of the country and increasingly to suburbs.
And now? In 2020… Almost overnight, many of the benefits of large, global cities have become vulnerabilities. What was previously greatly desired – crowds, proximity, connectivity, openness – everything that contributes to what economists call 'agglomeration benefits' and urbanists call 'vibrancy and vitality' – is now feared.
Both immigrants and millennials—the key groups behind urban growth—are increasingly moving to interior cities and even small towns. Roughly 80% of new job growth has already been taking place in the suburbs and exurbs. So, let’s think about what these emerging patterns in relation to what is happening now against the backdrop of Covid-19.
- Blurred boundaries: We have seen the accelerated trend towards working at home. This is evidenced by growing web use - which are up between 20% to 40% - mostly during the daytime
- Family values: Some say that the pandemic has enabled us to rediscover the essential value of family, which is often regarded as reactionary or outdated by some progressive thinkers
- Sustainable futures: A shift to people working from home, and this could prove effective as a way to reduce greenhouse gases. There are many who see the shutdown as a “fire drill” for the future.
In light of these drivers, Cushman & Wakefield say that people will prioritise proximity to like-minded people rather than proximity transport links. Richard Pickering refers to Richard Florida’s “Bohemian Index”. This reflects research we carried out with regard to millennials housing preferences.
3. Towards economic localisation
So, against this backdrop, let’s talk about economic localisation. What is it? Economic localisation shrinks everything down to the local. As opposed to a global market, long supply chains, overseas labour force, etc. Its characteristics include - shorter distance between production and consumption. Which is seen as more environmentally, economically and socially sustainable.
We are already beginning to see these principles emerge in the context of city design. For example, Mayor of Paris famously proposed the 15 min city just before Covid-19 hit. This was on the basis that:
- Traditional urban design is outdated, with people commuting to a city centre from a distance
- Proximity is the key to making cities vital, according to Jane Jacobs
- It is better for people to work near to where they live, go shopping nearby and have the leisure and services they need around them
- An support the multiple uses for infrastructure (sharing economy)
In recent proposals, we've seen a heavy emphasis on schemes that deliver against the ‘triple bottom line’ … people, planet and profit.
4. What are the proposed benefits?
There has been a tension between globalism and localism, urbanisation and localisation for some time now. Global business is required to demonstrate the benefits it brings to local communities through Corporate Social Responsibility and now there is impact investing in the form of Environmental, Social and Governance criteria.
At a policy level, successive Conservative governments have introduced regulations and laws to support and promote local decision-making. More recently, with regard to procurement, and public spend, there has been an emphasis on local employment and … shared value.
Localism is not only about economics and politics, but also reputation and trust and it is often seen to make good business sense. Younger consumers are more likely to patronise businesses that demonstrate local benefit.
Younger consumers want to live in a global world whilst having local experiences. ‘The World’s Local Bank’ was a brand idea born from a belief in embracing the variety and richness of culture in the world.
5. It is difficult to assess how or if the recent demographic dispersion will continue
A long-term recession could very well put the brakes on de-urbanisation dispersion and, as was the case after the Great Recession, lead increased urbanisation. On the other hand, large metropolitan areas and cities—especially those at the centre of the pandemic—could become less immediately attractive to movers than they were in the early 2010s. Almost overnight, many of the benefits of large, global cities have become vulnerabilities.
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