The New Core

I recently moderated a lively session of ULI’s Global Exchange Council, which included membership and ULI Global Trustees from Asia as well as Europe and (mostly) eastern USA.

Moving beyond the general COVID discussion, we observed structural changes that challenge our ideas of centrality and physical connection. These include Urbanization (city regions becoming more relevant than nations), Demographics (migration/living longer), Technology (platform systems that dissolve geographic boundaries), and Climate (global temperature rise, extreme weather events).

How are these structural changes shifting our behaviours and our social contracts? What are the implications of these shifts for urban land and core real-estate?

I invited Parag Khanna (Founder and Managing Partner of Future Map, the data and scenario-based strategic advisory firm) to make an initial presentation.

Introducing some of the themes of his upcoming book Move; the Forces Uprooting Us and Shaping Humanity’s Destiny, Parag noted that we are currently experiencing

multiple disruptions simultaneously and that we ‘don’t have the luxury of picking our disruptions’. He framed his comments in the language of Human Geography and outlined the distinction between long-term trends and short-term signals. Major disruptions and structural changes reconfigure global population and economy; we are arriving at an inflection point that will define ‘settled geography’ in the future. Parag introduced ‘Climate Oases’; as resilient geography becomes more precious, its value will appreciate. Existing global cities will make significant investments in climate resilience in order to remain competitive in their search for talent and capital. Four billion global youth will be on the move; disruptions and structural changes will induce mass migrations on a scale never experienced before. Environmental and economic changes will create oasis zones in a range of emerging geographies, which in turn anticipates redistribution of global wealth and opportunities.

I invited two guests to respond before opening up to the wider GEC forum.

Ceon van Oostrom (Founder and CEO of Edge Technologies) noted that he was fundamentally an optimist. While he appreciated the extent of the challenges, he also believed that emerging technologies - for example carbon capture and smart grids – will allow core real estate to mitigate and adapt to ongoing disruptions. He introduced the idea of ‘Paris-Proof’ buildings, able to meet the challenges identified at the 2015 COP 21 meetings in Paris.

Sean Chiao (Global Executive for AECOM’s ‘Buildings + Places’ practice) picked up on the themes of Human Geography and emphasised not just ‘what’ but also ‘who’. Rising middle class populations in emerging regions in particular from Africa and Asia, will define future norms. Roughly 75% of ‘Generation Alpha’ (first generation born entirely within the 21st century) reside in Africa and Asia in 2020. Most human population growth comes from these two continents, as nations in Europe and the Americas tend to have too few children to replace themselves.

GEC participants at the session discussed a range of related issues. One particular concern: how will settled regions accommodate shifts in cultural identity. Ultimately, global governance will have to recalibrate the social contract and re-establish the norms of shared experience.

Meanwhile, engaged conversations continue to encourage diverse perspectives; ULI’s Global Exchange Council offers its own opportunity to share valuable experience, which in turn begins to suggest how the global social contract may evolve.