Productivity, performance and phraseology

Why tech firms flock to expensive cities  New evidence that agglomeration creates value comes from a review by the Brookings Institution of the US tech hubs. A report late last year, followed by a recent interview with the Wall Street Journal sets out how cities like San Francisco deliver higher tech productivity rates than other US cities. Report author Mark Muro puts this down to the close proximity of highly specialised workers in specialised businesses. The report finds that whilst higher personal productivity rates were found in top hubs for sectors such as manufacturing, the agglomeration benefit was much more in evidence in innovation industries. Typically, hubs have some form of academic operator at their core. The recent growth of Manhattan’s West Side was put down to (a) spillover effects from places like San Francisco and San Diego, (having exhausted their local talent pools), (b) the presence of nearby Cornell Tech, and (c) the rezoning for expansion of the West Side, led by the likes of Dan Doctoroff, which enabled for instance the development of Hudson Yards. Will this provide a runaway lead for the few superstar tech hubs? The author cautions that sometimes ‘even the winners don’t feel like winners’, and that local government needs to remain focussed on managing the negative side effects of agglomeration, such as affordability issues, congestion, and other talent attraction drivers. #technology #techhub

Making Feelgood Pay  The most obvious repositioning play for most shopping centres in the past few years has been to dial up the leisure component. But beyond diversifying the income, and filling in some voids, how can a leisure play impact on scheme performance? A recent publication by my Retail colleagues establishes how leisure can pay for itself. Firstly, it would be a mistake to think that the status quo can be maintained in a do-nothing approach. Shopping centres positioned as a destination (as opposed to local convenience) are in an increasingly competitive market, where differentiation counts. As competing centres look to clear capacity, a necessary intervention to stem rent erosion is often the first business case. At the other end, a major leisure extension of say 5,000 sq m with branded attractions and a cinema can significantly extend the geographic catchment limits, with corresponding footfall externalities and potential for improved demographics flowing into the principal retail offering. Before our current period of retail market stress, the same principles held true, and various historical academic papers have, for instance, found empirical links between entertainment orientation and performance outcomes (in 2006); that the dominant motivation to visit a mall is ‘to have fun’ (2007), and that ‘some people may now come to shopping centre without intending to buy a single thing’ (1991). Looking forward it is conceivable that for some centres the discussion might be about how much retail you want to introduce into your leisure mix, rather than the other way around. #leisure

One bed flats  Of all the real estate sectors, perhaps surprisingly, residential has changed at a slower pace over recent history. Many of us still live in products substantially created over 100 years ago. Cosmetic changes and technological upgrades (such as electrification) are minor influences on the inherently slow rate of obsolescence. Underneath this, however, there has been a fairly fundamental shift. In most Western countries, the number of adults living alone has increased massively during the past 50 years. In the US for instance it has doubled, and in countries leading this trend (such as those in Scandinavia) the proportion now sits at over 50%. A recent report by Our World in Data shows that this trend is clearly correlated with GDP per capita; living alone is a luxury afforded by wealth. For instance, the proportion is as a low as 1% in some low-income Asian countries. Whilst culture does play a part, it seems that as wealth increases, so does the propensity to live alone, and that this trend is building y-o-y. A further finding is that this is due to choice, and that choosing to live alone does not equate to loneliness. As people stay single for longer (also correlated with wealth) and as they shun flatmates (plenty of good reasons for this!), one-bed flats are likely to remain in demand in the coming years. #singleliving

Passive language  We Brits have developed the art of tact to a level where we might fairly be accused of being indirect in our language. This is particularly the case in business, where delicately sidestepping the prospect of offence has become an art. Occasionally therefore, it is necessary to provide a translation to the true meaning of our vocabulary for those naive to our language or to the world or work. A recent thread I stumbled across on Twitter, asking users to call out corporate phraseology in emails, provides instruction. For instance, ‘I’m a little confused‘, does not denote genuine bewilderment, but instead thinly concealed rage about something that clearly shouldn’t have happened. ‘I’m sorry, I think my last email wasn’t clear‘, actually means, ‘I’m not sorry; my email was very clear; why have you done the opposite you imbecile?‘. ‘Per my previous email, attached for your convenience‘, means, ‘You clearly couldn’t be bothered to read my last email, so now no excuses‘. On conference calls, ‘Sorry, I was on mute,’ translates as ‘Oops I haven’t been listening for the past 10 minutes and you’ve just found me out’. ‘Team – let’s make sure we’re aligned’, of course means ‘Get on the bus, or you’ll soon be getting your P45‘. And a simple ‘Regards‘ (no Best, Kind or Warm prefix) essentially means ‘I hope you burn in hell‘. Best regards, Richard. #language