THE DAY AFTER TOMORROW
JUST ANOTHER ONE: Successive sanitary crises, affecting more and more people
Covid 19 is a worldwide sanitary crisis that will have, among others, huge economic consequences.
Some facts are very important: just think to the sanitary crisis we have been facing these last years : Sida, « mad cow », H5N1, H1N1, H7N0, SRAS, Ebola, Zika and Covid 19. If frequency is one key point, other ones are the spreading speed and the impact on worldxide population : These crises occur more more frequently and are affecting more and more people one after the other.
These recurent sanitary crises affecting, crisis after crisis, a gradual number of people, are generating an increasing collective awareness. Who does not feel concerned today? But an awareness of what ?
An awareness of the consequences and risks of globalization, an "ecological" awareness and the desire for a healthier life, an awareness that individual, life, nature should be at at the heart of the system, an awareness of the announced death of a breathless system which has failed to find solutions and which seeks by all means to survive….
Voices are rising around the world asking for change. This time : Enough is enough !
Have you never heard our elders saying that we need a good war to restore our society? If you think about it, isn't that what you just experienced? What lessons are we going to learn from it?
Time for changes : Now
The day after tomorrow will not look like the ones we have known before. But what are we talking about? What will it really be?
A new world, UTOPIA or REALITY?
First of all, we have to understand that it will be complicated because there are divergent interests : collective and particular, Capital and employees, rich developed countries and poor under development countries, etc.
Finding a global immediate solution is impossible but is it a good reason, hardly will we get out of the current worldwide crisis, to restart everything, as usual, as before ... to recover the loss of turnover , etc.
This time I think impacts and consequences in the collective memory will be difficult to erase and I do hope that things are going to change even if it is slowly, step by step.
Towards the end of a globalization economy?
Sell more to the greatest number and generate ever greater profits is what guides economic decisions. To achieve this, reduction of production cost is the key to be able to offer the customer the most attractive price.
A consequence was the relocation of production from the so-called « rich countries » to the « poor countries » to reduce the costs, much lower wages, attractive financial conditions (taxes, property prices, etc.) allowing to produce at lower cost. But these relocations also have environmental consequenses, increasing pollution in sone production areas... but not only
This economic reality has generated significant worldwide land, air and sea transport flows between raw materials production sites, manufacturing sites and consumption areas. The environmental consequences in terms of local and global pollution are significant. In the event of a sanatary crisis like the one we are experiencing, these international flows are one of the key factor of a uncontrolled, quick worldwide spread of diseases.
My purpose is not to question relocation process -it is an economic reality- but to highlight that it is one of the points of vigilance we will have to be attentive to. Finding a solution will not be easy !
The rise of ecological awareness was one of the highlights of the last crisis. I will take agriculture as an example. Questions arise: Should we, for example, be able to eat strawberries at any time of the year?
Couldn’t we return to a more eco-responsible consumption of local seasonal fruits and vegetables.
Everything is about reasonable decison and finding a balance between local production and imports. The sale of products locally, even outside the traditional large-scale distribution networks, ensuring producers a fair remuneration and providing customers with fresh, quality products is a new trend. In addition it is good for humans and the planet!
There is also a social and societal side to these crises, linked to differences between the poorest, always poorer and the richest always richer, between small and large companies, between employees, civil servants and liberal professionals, etc.
Until now the system could face and recover more or less easily, thanks to the huge middle class (at least in western countries) used as a buffer able to absorb, finance and forget any crisis. But this time it is very different : these recurrent crises ended up causing a stiring, not to say a boiling effect of this mass so far so passive. Voices are rising from all sides, more and more numerous to demand the transformation of our society.
Everything has changed… A forced march change !
Sanitary situation forced companies, even the ones until now so reluctatnt to changes, to implement a new way of working, raising home office as the new standard.
We don’t really see how could this change after the crisis? A step back is impossible, a whole category of office employees has been able to taste for the first time (sometimes) homeoffice and hopes that this will become an acquired advantage in the business world of tomorrow. Management will have to adapt to the new rules, those of the "liberated company".
For large cities, it is usual for employees commuting to work to spend 2 hours daily in transportation, and often more !
Teleworking make it possible for them to save these 2 hours without any impact on the company productivity.
It is source of an improvement in their daily life, unprecedented or almost, comparable to the introduction of paid holidays in 1936 (in France): A revolution in the world of work .
A quick calculation shows that these 2 hours gained every day represent over 14 weeks of “work” in transport every year!
Transportation between home and work is one of the black spots, source of stress and other illnesses, for many employees in large cities. Tele-working is a way to avoid crowded public transport during rush hour.
However, employees are ready to go to work in offices nearby their home, at walking or cycling distance for example.
Cities will have to adapt to these modes of transport. It is possible !
In the Paris area, on one of the busiest road, between Porte Maillot and the La Défense business district (one of the most important in Europe), with a traffic of more than 100,000 cars par day, a cycle road has just been built. Not perfect and controversial, this cycle road is the living proof of the change in progress...
Another consequence of the installation of these cycle ways on the space previously dedicated to cars is the limitation of automotive traffic and therefore the reduction of pollution and the improvement of the living conditions in the neighbourhood.
We could even dream that this transformation could be accompanied by a green policy : new green spaces. A greener, less polluted, less noisy city, all for the best!
A new world or the clone of the past. The impact on the city and the real estate world
If teleworking is the new normal, it will be necessary to re-think the head offices, their function, their organization, their layouts ...
Employees are not going to work 100% from home, they will come to the office when needed. It seems obvious that Flex Office will become the rule for office organization and that the need for meeting rooms and videoconferencing tools, among others, will explode.
As HomeOffice becomes the new standard, with new operating guidelines established by each company,
the downsizing of head offices surfaces due to reduction of workstations will be a necessity linked with a reorganization of spaces to fullfill representation purposes, meetings, conferences, or social events needs, … Flexibility will become the key word !
It involves a revolution in spaces and working methods integrating an opening offices to the outside world.
I would take the example of an office building, which I visited recently in the new business district of Bratislava in Slovakia. This multi-user, energy efficient, building not only takes into account the latest digital technologies, but has nice workspaces with contemporary design, user services at the forefront of what we can do but it also incorporates principles of flexibility by offering co-working spaces on the first levels open to external users and resident companies. It thus allows companies to rent spaces for working groups, for teams dedicated to new projects launchings, for meetings or to punctually welcome more employees, etc.
It is a model which deserves closer study and which, in my opinion, corresponds to the future needs of businesses. We could eventhink a bit further and integrate housing in the same building…
For the company, there is a financial gain linked to the reduction in office space and therefore in rent, charges, consumption (heating, air conditioning, lighting, water, etc.), taxes, cleaning maintenance, investment in furniture and fittings, etc. but also in terms of transport when the company contributes to the transport costs of its employees, in terms of catering when it contributes to the canteen costs, etc
Endely real estate costs will no longer be calculated per square meter, as it is too often the case today, but per workstation which is the true reference value.
Some companies are already planning to finance teleworking spaces, co-working spaces nearby employees home from the savings made on corporate abandoned office spaces. Some have already done it !
In the end downsizing office space should lower the cost of offices for companies but will generate a commercial real estate crisis due to the the huge number of project under construction, the stock of vacant premises, and decrease on demand, … We could also see it as the opportunity to turn these buildings in someting else…
The industrial real estate is more resiliant due to increasing e-commerce volums, which is a worldwide longlasting trend and shouldn’t be as heavily impacted as the offices sector.
If during the crisis, employees were forced to work from home, lot of them consider that their home are not done for it.
A consequence for the housing real estate will be for developers, architects, etc. to take it into account and to find solutions to the work from home trend.
A first idea could be to create on the ground floor of each new apartment building project a common space dedicated among other things to teleworking. A modular, convivial space managed by the co-owners or a dedicated management company, which would be equipped with workstations and a videoconference space, etc.
Why not imagine this modular space able to be transformed in the evening into a classroom where students could help/give lessons to local children or in a space for association activities,… and on weekends a space that could also be reserved for a birthday party, a neighborhood meeting, the possibilities are endless …
These spaces, integrated into the heart of the city and its inhabitants, could be the source that will revitalize these dormitory cities of the first or second ring of the big metropoles by creating local jobs and perpetuating the installation of local shops. It will bring back activities that has moved to business office areas to be nearby their office clients.
The reflection can be pushed further with the creation of intergenerational buildings integrating among other things the concepts of co-living and many others.
As you can see, it will also have an impact on these big co-working spaces in the heart of large cities, which could be splitted up in smaller ones as close as possible of employees housing areas. It will of course be necessary to set up protocols linked to data protection and confidentiality, for example.
Thank you for reading this article, feel free to comment, share … discussion is open