June 24, 2010  |  permalink

Collateral Damage

The economic outlook for European airports,”
Centre for Asia-Pacific Aviation, June 22, 2010.

“Now, worryingly, Germany has joined the movement, with another aviation tax disguised as a method of ‘helping the environment’, and one that will even threaten the recovery of the New Zealand tourism industry, if the Tourism Industry Association of that country is to be believed. The German market contributes USD189 million to the New Zealand economy annually and is the nation’s ninth largest spending market. In 2009, 64,564 German tourists visited New Zealand.”

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June 24, 2010  |  permalink

The World Declares War on Emirates

“First they ignore you, then they laugh at you, then they fight you, then you win.”—Mohandas Gandhi

First, Europe’s governments ignored Emirates Airlines, happily signing agreements twenty-five years ago with a fledgling carrier that would later storm the UK and Germany, putting incredible pressure on British Airways and Lufthansa in the lucrative long-haul market to Asia. Then, they laughed last year when Dubai Inc. nearly capsized under its debt load, and rumors swirled the airline would be ransomed to Abu Dhabi. Now they’ve begun to fight, judging by the comments of KLM chief Peter Hartman, who swore Emirates can expect “more and more reluctance [by governments] to grant traffic rights” going forward.

Emirates is already in the midst of regulatory battles with Canada and Germany for increased access to their markets. Hartman’s comments follow those of BA’s CEO Willie Walsh, who has described Emirates as an existential threat to European carriers’ existence, and Lufthansa’s CEO Wolfgang Mayrhuber, who told Bloomberg: “It’s a miracle that Emirates already has more inter-continental seats than Air France and British Airways combined. It took us 40 years to get 30 B747s in the air in one of the biggest global economies, so one must assume that this is an investment for the world.”

But does Emirates’ plans make sense? The Financial Times seems to think so, writing approvingly in yesterday’s Lex column:

But there is method to this madness. Dubai is turning itself into a central hub for air transfer traffic between west and east. New planes fly far enough to give Emirates, which flew 27m passengers last year compared with British Airways’ 31m, a global reach. They are also more efficient, allowing the airline to undercut European flag carriers such as British Airways and Air France-KLM on price. Passengers will always pay more for direct flights but many are willing to transfer if the ticket is cheaper and the wait is not too long. As for profitability, Emirates lacks the legacy costs and rebellious workforces that plague the older flag carriers. And when the oil price goes up, its owners’ pockets just get deeper. Emirates made about $1bn in net profit last year and had an operating margin near 10 per cent.

All that adds up to a potentially disruptive force in the long-haul market, though Emirates will first have to deploy its new planes profitably and secure more slots at major airports. That could lead to cheaper long-haul flights in bigger and greener planes. Airline investors should be worried; consumers might well shrug and grin.

Emirates’ strategy to break into the German market was to order another 32 A380s at the Berlin Air Show a few weeks ago, forcing Merkel’s government to choose between protecting Lufthansa or creating highly-skilled manufacturing jobs. In the long run, Germany will likely opt for the latter. Emirates may repeat this strategy at the upcoming Farnborough air show, Sheikh Mo having already told CNN he expects the airline to announce yet another order there.

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June 23, 2010  |  permalink

The Master Plan: Wiring A Smart City In The Desert

image (Published at FastCompany.com on June 18, 2010)

Is Dubai the world’s smartest city? Maybe not in the sense that it mortgaged long-term infrastructure with $100 billion in very short-term debt, but “smart” in a way IBM, Cisco and other tech heavyweights would be envious of. One advantage of building a city from scratch is that each of Dubai’s 60,000 modern buildings is equipped with the state-of-the-art in lighting, HVAC, and security systems—all of which can be wired to the Internet.

Last week at the Realcomm 2010 conference in Las Vegas, a Dubai software firm named Pacific Controls revealed it had beaten Cisco to the punch in creating the world’s first “smart city” by connecting 20,000 of those buildings – including the world’s largest mall and largest building – to a cloud-based platform capable of controlling each remotely. Using its software to track and fine-tune electricity usage in nearly half of these buildings (some 9,000 in all), Pacific Controls has managed to cut their power bills by 20%—and is willing to do the same for any building in any city in the world.

The company has succeeded in adapting software-as-a-service to offering cities-as-a-service in the form of “Galaxy,” which uses Java-based middleware and the Internet to connect building systems to its data centers, which can be located anywhere in the world. (One is in its LEED Platinum-certified headquarters in Dubai; the other in downtown Manhattan.) IBM intends to wire Dubuque, Iowa in a similar manner – incorporating municipal utilities into its system – and in instant cities across Korea, China and Saudi Arabia.

But Pacific Controls did it first, thanks in large part to a recent law decreed by Dubai’s ruling Sheikh Mohammed bin Rashid al Maktoum that all buildings in Dubai be monitored remotely in case of fire or public safety hazard. CEO Dilip Rahulan explained to me that building owners have rushed to sign up for Galaxy to be in compliance with the law – in addition to the 20,000 buildings his firm now controls, he is busy adding 120 a day. Those include the Dubai Mall at the base of the Burj Khalifa (which isn’t connected yet, but will be soon, he promises) and Dubai International Airport’s new Terminal 3, in addition to more than one hundred government buildings and four hundred vehicles retrofitted with GPS. In the event of an emergency, Galaxy will not only send an alarm to Dubai’s fire and police departments, but also track their arrival on the scene.

Rahulan founded Pacific Controls in Dubai in 2001, when it was already apparent that “real estate would take off exponentially there,” and also that “the Internet would be the backbone through which city services would someday be delivered.” His engineers in India and Dubai spent three years building Galaxy atop software originally used for transmitting telemetry data from aircraft (such as the last cryptic messages from the doomed Air France Flight 447, which vanished over the Atlantic last summer). For now, Galaxy’s use is limited to monitoring what he calls “the heartbeats of buildings,” but Rahulan hopes it will expand to encompass municipal systems such as Dubai’s power grids in his Quixotic quest to wring cost savings and lower energy use from the least sustainable city in the world.

Perhaps Rahulan’s most important insight, however, is that smart buildings and smart cities can be run from anywhere. For this reason, Pacific Controls has started looking farther afield for customers, starting with the campus of Saudi Arabia’s new King Abdullah University of Science and Technology – the world’s largest LEED Platinum project. The company has signed a deal with the Carrier Company to remotely control ten thousand of its commercial HVAC systems, and in the meantime is busy bringing buildings in China, the U.K. and U.S. online. The ability to expand in every direction at once is the reason the $100 million company is growing at a rate of sixty percent each year.

Why stop there? While in Vegas last week to speak at the annual Realcomm conference (which started discussing smart building a decade before IBM found its “Smarter Planet” religion) Rahulan met with representatives of the General Services Administration – the landlord of 8,500 buildings owned by the U.S. government. Perhaps Galaxy will be coming soon to the federal courthouse near you.

[Photo via Flickr/Christopher Walker]

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June 23, 2010  |  permalink

A Day In The Life

From YouTube: “The videoclip lasts 1 min 12 sec and represents 24 hours, a whole day of all flights. Each second represents one duration of 20 minutes. Each yellow point is an airplane with at least 250 passengers. Most flights from the USA to Europe start in the night hours, returning flight during the day.”


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June 23, 2010  |  permalink

“I’m living in airports these days.”

No Secrets,” The New Yorker, June 7, 2010:

“...WikiLeaks is not quite an organization; it is better described as a media insurgency. It has no paid staff, no copiers, no desks, no office. [Julian Paul] Assange does not even have a home. He travels from country to country, staying with supporters, or friends of friends—as he once put it to me, “I’m living in airports these days.” He is the operation’s prime mover, and it is fair to say that WikiLeaks exists wherever he does.”

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June 22, 2010  |  permalink

Having our Kindles and our conscience, too.

Over at The Atlantic, James Fallows has begun connecting the dots of recent events at factories in China:

—-> This same Foxconn, scene of the suicides, is where the newly discounted Nooks and Kindles come from—plus iPads, iPhones, and lots of other stuff. <--- A reader in China wrote just now to ask: Do Americans even think about the connection? Relentless price pressure on Chinese suppliers, all the more so now that, largely in response to U.S. government demands, the RMB is rising again? Relentless expectation of falling prices in U.S. stores? The Foxconn-suicide story is ambiguous, with many hypotheses about the cause. But the price pressure on these suppliers is unmistakable.
The answer is: no, of course we don’t think about. And of course we expect prices keep falling—through the miracle of Moore’s Law and clever 23-year-olds’ software, not manufacturing economies of scale. We want cheaper iPads and “fair trade” iPads, minus the sweatshops, never mind the fact that it’s impossible to move Apple’s supplier base to the US without doubling or tripling the price. The solution, as I’ve pointed out, is to all but liquidate the worst offenders on the Chinese coast and move the factories inland, where wages are low enough to keep factories competitive even with the rising RMB. Everything is connected.
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June 15, 2010  |  permalink

Foxconn Goes West and North

As expected, Foxconn appears to be shifting production to its factories in western and northern China rather than pay the 66% wage increase it recently granted its Shenzhen employees in the wake of ten suicides this spring. The Taiwanese computer-industry trade paper Digitimes (and others) quotes the Chinese-language China Times. From the report:

The Foxconn Group, after announcing wage hikes for employees at two production bases in Shenzhen, southern China in early June, has been shifting a large portion of the production lines from Shenzhen to its production bases in Tianjin, northern China, and Wuhan and Chongqing, western China, according to a Chinese-language China Times report.

The two production bases in Shenzhen currently have 400,000 employees in total and will be combined into one, with only a few relatively profitable production lines to remain, the report pointed out.

As the minimum monthly wages in Tianjin and Wuhan are currently 920 yuan (US$135) and 900 yuan respectively, the moves are to reduce labor costs because Foxconn may not raise wages for workers in the two places, the report analyzed.

According to other China-based reports, Foxconn began to stop recruiting new employees in Shenzhen on May 29.

It’s important to keep in mind that Foxconn was already building or expanding factories in Chongqing and Wuhan ahead of expected wage inflation. The public outcry over the suicides isn’t the cause of the shift so much as the catalyst.

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June 14, 2010  |  permalink

And….. We’re Back.

Hola, amigos. I know it’s been a long time since I rapped at ya, but I’ve spent the last few months finishing my book. (Sorry, the Jim Anchower opener was irresistable.) In all seriousness, Aerotropolis: The Way We’ll Live Next is finally finished (or as finished as any book on current and future events can be) and on track for February publication. In the meantime, I’ve been keeping busy with trips to Beijing, Shenzhen, Chicago (twice), Atlanta (twice) and Las Vegas (for a convention, of course). Along the way, I flew to Wrigley Field and back for Opening Day, spoke at the annual Airport Cities conference, attended the All-China Gaelic Games, moderated matches at the High School National Championship Tournament of Quiz Bowl, was a groomsman in a wedding, partied at the Ace Hotel with Mr. China (pictured with me in the Ace’s photo booth below), and spoke at the Realcomm 2010 conference in Vegas. (CityCenter 2010 = Dubai 2006.)


I also wrote. Fast Company sent me to the 18th Annual Congress for the New Urbanism in Atlanta, where David Byrne talked about bicycles, the directors of the Centers for Disease Control told us the suburbs are killing us, HUD Secretary Shaun Donovan swore anyone wanting grants from his department would have to follow LEED-ND criteria, Peter Calthorpe unveiled a plan to save the world and Andres Duany unveiled his own to survive the collapse of complex society after it. (Oh, and Jim Kunstler flew down from New York to bury air travel yet again.)

Meanwhile, the near-future I tried my best to describe in Aerotropolis ever-so-slowly came closer to being the present. I don’t have the time or the space (that you’ll tolerate, anyway) to cover everything that’s happened in the past few months, but let’s catch up a bit.

» Continue reading...

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March 28, 2010  |  permalink

How To Become An Air Warrior In 25,000 Miles Or Less


I was on NY1 recently explaining the fastest way to get upgraded to First (where I’ll be sitting on my flight to Chicago tomorrrow).

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March 19, 2010  |  permalink

Too little, too late.

In today’s NYT, David Brooks uses the British writer Philip Blond as his ventriloquist dummy to make the liberal’s case for “three big areas of reform: remoralize the market, relocalize the economy and recapitalize the poor.” Brooks elegantly summarizes the corrosive effects of increasing returns to scale:

Then there was the market revolution from the right. In the age of deregulation, giant chains like Wal-Mart decimated local shop owners. Global financial markets took over small banks, so that the local knowledge of a town banker was replaced by a manic herd of traders thousands of miles away. Unions withered.

The two revolutions talked the language of individual freedom, but they perversely ended up creating greater centralization. They created an atomized, segmented society and then the state had to come in and attempt to repair the damage.

Blond’s/Brooks’ solution?

This would mean passing zoning legislation to give small shopkeepers a shot against the retail giants, reducing barriers to entry for new businesses, revitalizing local banks, encouraging employee share ownership, setting up local capital funds so community associations could invest in local enterprises, rewarding savings, cutting regulations that socialize risk and privatize profit, and reducing the subsidies that flow from big government and big business.

As a liberal/progressive, politically I can get behind this, but it still doesn’t address the issues of scale. Any industry in the business of producing bits will trend toward scale and consolidation, because it makes too much sense not too. I don’t see how localized consumption—when overconsumption is what got America into this mess—is going to make much of a difference. Disagreements are welcome in the comments.

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About Greg Lindsay

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Greg Lindsay is a journalist, urbanist, futurist, and speaker. He is the director of applied research at NewCities and director of strategy at its mobility offshoot CoMotion.  He is also a partner at FutureMap, a geo-strategic advisory firm based in Singapore, a non-resident senior fellow of The Atlantic Council’s Foresight, Strategy, and Risks Initiative, and co-author of Aerotropolis: The Way We’ll Live Next.

» More about Greg Lindsay

Articles by Greg Lindsay

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The State of Play: Connected Mobility + U.S. Cities

Medium  |  May 1, 2017

The Engine Room

Fast Company  |  January 19, 2017

The Collaboration Software That’s Rejuvenating The Young Global Leaders Of Davos

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What If Uber Kills Public Transport Instead of Cars

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The Office of the Future Is…an Office

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Now Arriving: A Connected Mobility Roadmap for Public Transport

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Why Every Business Should Start in a Co-Working Space

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Can the World’s Worst Traffic Problem Be Solved?

The New Republic  |  January/February 2016

Hacking The City

Fast Company  |  September 22, 2015

We Spent Two Weeks Wearing Employee Trackers: Here’s What We Learned

Fast Company  |  September 21, 2015

HR Meets Data: How Your Boss Will Monitor You To Create The Quantified Workplace

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Which Contacts Should You Keep in Touch With? Let This Software Tell You

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5 Global Cities of the Future

Global Solution Networks  |  December 2014

Cities on the Move

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Engineering Serendipity

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Sin City vs. SimCity

Harvard Business Review  |  October 2014

Workspaces That Move People

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