Planetary Emergency or are we just entering the era of the Enternet?

A high level debate has emerged about the future of energy. The sides see two very different outcomes if energy use continues to grow.

Actually, the underlying debate is not so much about energy growth as it is about how we produce energy. One side asserts carbon based energy production is a problem that must urgently be solved by government intervention. The counter position is that the carbon problem will be solved very quickly by science, engineering and entrepreneurship. Government ought to get out of the way.

The adversarial spokespeople for each side are Al Gore and Bob Metcalfe. Both were part of the last great technology paradigm shift: the internet.

Al Gore entered congress in 1976 and made support for the first wide area packet switching network called ARPANET (which became the internet) a government priority. According to Gore, what worked for the internet will work for energy. The former Vice President of the US tells us if government does not intervene in the use of energy (or at least the way we generate it) the planet will fail to support life as we know it.

On the other side is Bob Metcalfe the inventor of a local-area networking standard he called Ethernet 36 years ago next month (May 22, 1973). Metcalfe also sees the internet model as the same model that will apply to energy but he has a different take. He sees a future of unlimited nonpolluting energy springing from invention and commercialization to satisfy consumer demand.

Gore advocates "Persuading individuals, families, communities, states, corporations and other organizations to begin to quickly and meaningfully reduce their own global warming pollution—and to offset the remainder—in order to become "carbon neutral." (Link: http://www.climateprotect.org/about/alliance).

Gore's powerful presentations have brought him more than a Nobel Prize - he may in fact have been partly responsible for changes of government in Australia and the US. Here is the latest "short version" of his presentation: (Link: http://www.ted.com/index.php/talks/al_gore_s_new_thinking_on_the_climate_crisis.html).

Please take a moment to watch it. I saw him do the original presentation at the Chautauqua Institution in New York three years ago. He is a better presenter now and he makes his arguments more powerfully.

Metcalfe's opposing view sees us leaping over the carbon problem and launching into the era of the "Enternet" where use of carbon based fuels are no longer a problem because the centralized power generation model they represent will fail to attract new investment. Here is Metcalfe's presentation: (Link: http://earth2tech.com/greennet-09-presentations/bob-metcalfe). Please watch it as well.

Former Vice President Gore is trying to bridge the divide between the positions. last week he urged US lawmakers to put aside differences and act quickly. A good report of his presentation and reactions to it are here: (Link: http://news.yahoo.com/s/ap/20090424/ap_on_go_co/us_climate_hearings_37). The text of what he said is here (Link: http://energycommerce.house.gov/Press_111/20090424/testimony_gore.pdf).

As for me, I think Metcalfe has it right – and this matters. Some of the most promising technologies I know about personally could find themselves fighting for investment against less promising technologies supported by influences that are misplaced if government intervenes by trying to pick winners.

If you would like to see the distributed generation model explained compellingly read Perfect Power by Robert Galvin and Kurt Yeager. This book published earlier this year explains how the microgrid revolution will unleash cleaner, greener, and more abundant energy.

Next week it will be my privilege to be on the same rostrum with Kurt Yeager, a former President of the Electric Power Research Institute (EPRI) at one of North America's most far thinking energy organizations: The Peak Load Management Alliance (PLMA) at their Spring Meeting in Annapolis.

I am introducing a panel on Electric Vehicles and Plug-in Hybrids: Effect on the Grid as the Vice President of Development of Aztech Associates Inc.

Aztech offers a way for consumers to watch their energy use, including vehicle charging, on an always-on In-Home Display or IHD. Aztech invented this term and today these energy monitors have become the face of the smart grid in tests and deployments across North America.

Innovative companies like Aztech, who created a new energy product category like the IHD without government investment, will lead us into Bob Metcalfe's era of the Enternet.

Greenspan’s Interview on 60 Minutes – they didn’t mention the Canadian Connection

There were tough choices for TV viewers tonight. The choices included Sunday Night Football (New England vs. San Diego), The Emmys and 60 Minutes with the Alan Greenspan interview.

I chose the Greenspan interview. If you are reading this blog you probably made the same choice.

Alan Greenspan is one of the fascinating characters of the second half of the 20^th Century and he remains influential today. He is famously inscrutable which made this evening’s interview so fascinating. Particularly interesting was what 60 Minutes left on the cutting room floor about his formative years.

So here is the “rest of the story” as my parent’s Carefree, Arizona neighbor Paul Harvey used to say:

First, money for school was tight for Alan. It was mentioned in the interview that he toured with the popular Henry Jerome swing orchestra. It was not mentioned that he dropped out of Juilliard to join the band and earn some money for his education. He famously read books about economics in his room while his fellow band members boozed the nights away. The fact was he loved numbers. He devoured them in the form of baseball statistics, railroad schedules and while on tour his fellow band members noticed this and he ended up doing their taxes.

He earned enough to go to New York University for a BA and MA in Economics. He started on a PhD at Columbia University but he couldn’t afford the tuition and dropped out in 1951. 26 years later New York University conferred the PhD on him without requiring a dissertation – a good decision. I’ll bet some people at Columbia wished they thought of it first. I have a high school classmate that became the President of Columbia University who I know would have thought of it – but he wasn’t President in 1977.

With his education in place in 1951 he entered the world of work and started to have a social life. He fell in love and married a young Canadian art student from Winnipeg. Her name was Joan Mitchell (I do not believe she is related to his current wife Andrea Mitchell).

Joan came from a Winnipeg family that ran jewelry stores and her father was known to be tough and headstrong but allowed her to go to New York City for her education. My source for much of this information is Arthur Gillman, a famous “number man” in his own right whose knowledge about much of this is personal and whose family is from Winnipeg. Arthur’s family rented from the Mitchell’s and Arthur recalls in 1952 talking to Joan’s father about the new son-in-law and being told “He has promise.”

How Joan and Arthur’s grandparents ended up in Winnipeg is a fascinating story. It includes harrowing escapes from Russian persecution in those troubled times. The Jewish émigrés journeyed up the center of the North American Continent from Galveston, Texas following the Mississippi river system to cross the border into Canada all the while looking for places that would accept them. Land in Canada was free to those who would break the sod and put the land into production which is why Canada was the end of the journey. Émigrés dropped off along the journey to join Jewish enclaves in the cities along the way if they found opportunities.

In a future blog I will tell you how the journey eventually led to a key event that made the formation of Israel possible. Arthur has seen the stone memorial sent from the grateful nation of Israel to a synagogue in Kansas City that memorializes the event – but let’s get back to how this Canadian connection influenced Alan Greenspan and may have changed the course of American economic history.

Joan was not the only Winnipegger in New York City finding their way. Leonard Peikoff from Winnipeg was also a student at New York University and part of a group called “The Collective” that formed around the author Ayn Rand (Alissa Zinovievan Rosenbaum). Rand was also from a Russian Jewish family.

Peikoff and Joan knew each other. Joan introduced Alan to the group surrounding Rand and he became part of The Collective.

In the 60 Minutes interview Greenspan was asked about his nickname in the group “The Undertaker” and about Ayn Rand’s comment that he was a social climber. He seemed perplexed at the question.

Alan’s marriage to Joan only lasted from 1952 to 1953 but Rand became a friend and mentor to Alan who wrote for her “The Objectivist” newsletter.

Alan owes a lot to the Rand connection which gave him a platform to meet people of influence that would help him in his career. If he had not met and fallen in love with Joan and her friends had not introduced him to Rand he may have had a very different career and America might have had a different economic history for the last twenty years.

For those of you wondering, I switched to the game after the interview – New England won 38 to 14 but a fascinating ad kept popping up for the iPod Nano from Apple during the game. It featured an impossible to forget song called the “1234” Song and drove bloggers crazy trying to identify the “girl in the blue spangled costume.” It was Canadian singer/songwriter Leslie Feist and here are the complete lyrics – an appropriate love song for a blog about Alan Greenspan falling in love from yet another Canadian connection. He would appreciate a song whose title is all numbers!

One Two Three Four
Tell me that you love me more
Sleepless long nights
That is what my youth was for

Old teenage hopes are alive at your door
Left you with nothing but they want some more

Oh, you're changing your heart
Oh, You know who you are

Nokia makes it official - India has overtaken the U.S. to become the second-largest mobile phone market for Nokia after China.

Last month this blog pointed out that an India-Africa axis is forming in world trade. For those who understood the importance of this development the decision of Nokia to build its hub in India will not come as a surprise. Read to the end of this entry for some thoughts on what this rise in the importance of India means to fellow Commonwealth country Canada and, by extension, to Kingston.

The Indian market has been growing at a fast pace. The country added 7.3 million cell-phone subscribers in June, taking the total to 185.1 million, according to the Telecom Regulatory Authority of India. Nokia made India the site of a manufacturing hub eighteen months ago which was considered unusual at the time. Most electronics makers have avoided manufacturing goods in India for export, citing a poor infrastructure but Nokia knew what it was doing.

The Indian factory produced 60 million handsets since it opened but only half of those cell-phones are sold in India, the other half were exported to the Middle East, Africa, South Asia, Australia and New Zealand, according to a Nokia spokeswoman.

According to the Washington Post there are now more than 2.4 billion cell-phone users worldwide, with more than 1,000 new customers added every minute. About 59 percent of users are in developing countries, making cell-phones the first telecommunications technology in history to have more users there than in the developed world. China has about 25% of the total users – the US only 10%.

The reason I say Nokia knew what it was doing is that cell-phone usage in Africa is growing faster than in any other region and India, with common British Commonwealth roots, is the natural business highway to Africa for Europe and Asia. African users jumped from 63 million users two years ago to about 152 million today, according to David Pringle, a spokesman for the GSM Association, a trade group that represents cellular companies whose customers account for 80 percent of the global total.

What is driving all this growth is that the cell-phone is now the indispensible “computer” of the developing world. Nokia understands this and Apple, with its iPhone, “gets it” as well making their decision to force all applications through the iPhone browser instead of permitting foreign code to reside in the iPhone itself a brilliant move – ignoring their carping critics about this move is their wisest course of action when you glimpse the worldwide opportunity. Browser-based applications are the inevitable future of software distribution which accounts for the reason Google is apparently developing their own browser.

The Washington Post article I mention above can be found at http://www.washingtonpost.com/wp-dyn/content/article/2006/07/08/AR2006070801063_pf.html.

To encourage you to read the Washington Post article here is an excerpt:

“As surely as the light bulb and the automobile before them, the cell-phone and text messaging are radically changing the way people live in the developing world. In widespread use for about five years in much of Africa, technology long taken for granted by the world's rich has made life easier, safer and more prosperous for the world's poor.”

“For the first time, millions of Africans are able to communicate easily with people who are beyond shouting distance. Farmers and fishermen, for example, use text messaging to check market prices, eliminating middlemen and increasing profits -- and preventing long trips to the market on days it is canceled.”

“In cities, cell-phones are becoming a basic tool of electronic commerce, allowing consumers to transfer money to merchants with a few presses on the keypad.”

I suggest you read the rest of the article to understand how pervasively the cell-phone has changed people’s lives in the developing world.

So, what does this mean for Canada and Kingston?

The answer is best put in the context of a speech I attended at the Economic Club of Toronto on Aug 8^th by Alan Rosling, the Executive Director of the Tata Group based in India. The sales of the Tata group represent 2.8% of the Gross National Product of India and they have been buying well known world brands such as Tetley Tea.

Rosling’s subject was “The Internationalization of India” and he argued the combination of global economic and demographic trends that have brought India and China out of the shadows is having a profound impact on India's interactions with the rest of the world.

He pointed to the emerging Indian affluent middle class, continued liberalization of the economy, a dynamic private sector and a deep pool of innovative, entrepreneurial and highly-skilled human capital that are driving the country's internationalization as both a producer and a consumer nation.

Rosling took Canada to task for not taking sufficient advantage of its Commonwealth heritage by engaging more with India. He compellingly argued that India is already a global economic force and will become increasingly significant in the future and the common heritage between India and Canada should make Canada more interested in an “Indian Strategy” than a “China Strategy.”

Rosling did not mention Africa specifically in his speech nor the fact that some skilled labour sectors in India are not as deep as once thought but when I asked him about Tata’s “Africa Strategy” he had a ready answer and pointed to impressive Tata moves in Africa. Tata is International as Rosling pointed out so it is not surprising if they source people for jobs worldwide – an option other companies in India may not have.

I would love to take a look at Tata’s human resources long range plan. I would not be surprised to find Canada targeted for many reasons – not the least of which could be the closing of employment opportunities for Canadians in the US for political and security reasons offering alert International companies like Tata a unique opportunity to successfully recruit in Canada.

Rosling pointed out that Tata is likely to be as important a force in such industrial sectors as the Automotive Sector as China will be and by inference it did not take much of a leap to see India and China succeeding Europe and Japan as entries into the North American automotive market.

Tata Motors Limited, formerly known as TELCO (TATA Engineering and Locomotive Company), is India’s largest passenger automobile and commercial vehicle manufacturing company. It is the world's 5th largest commercial vehicle manufacturer. A little research into Tata’s recent automotive initiatives uncovers the stunning (in my opinion under reported) announcement of a £1,250 ($2,650 CAD) compressed air powered “world car” to be in production next year according to the Economic Times on August 21. The reference is here: http://www.autoindustry.co.uk/news/21-08-07_1. The price point will move up if it is exported to Europe and North America but it may still be the least expensive alternative for many users and it produces virtually no pollution at all.

Could Tata offer this vehicle in North America? Maybe, but the point of entry would as likely be Mexico as Canada (how do you heat the passenger cabin for one thing?). It should be noted the motor was developed in France by a company headquartered in Luxembourg.

But Tata and other Indian companies are factors in the automotive space in other ways that could impact Canada immediately. They make parts. In the age of just-in-time manufacturing these parts need to be put into containers in the right sequence for assembly line use.

Think back to Kingston’s strategic position at the headwaters of the St Lawrence River and the role Kingston could play with a purpose built integration and sequencing facility plus the value added satellite facilities that could surround it.

Kingston is looking at a historic opportunity to re-capture the historic position the city held a century or more ago when rail, canals and roadways made Kingston one of the most important centres of commerce in Canada. It can happen again. In fact, it is being discussed actively – bookmark this blog because you may read about such developments here first.

Update regarding Greenspan at BOMA's 100th

Bloomberg posted the following article: http://www.bloomberg.com/apps/news?pid=20601068&sid=a35MnKF6LHZQ on Greenspan's BOMA appearance.

Question 1: If energy price is the means to bring down consumption as Greenspan said and that means people will wish to travel less to control their costs, what is the future of the 1 hour plus commute?

Question 2: If we are half way through the liquidity bubble from foreign savings coming into the US as Greenspan said permitting real estate deals to happen and companies to be funded, what will happen as this easy money disappears?

Clue: I was the Executive Vice President at the Pittsburgh Chamber of Commerce when the oil embargo happened - I know what the reactions were in Pittsburgh at that time and I think it offers some clues for "tomorrow" in a more energy price sensitive time with higher interest rates and tighter borrowing.

I will address the details in a future Entry. In the meantime I thought you might like to see the Bloomberg take on Greenspan's BOMA speech.

Thoughts on International Trade from Kingston, Ontario – July 28, 2007

International Trade Shifts – implications and possibilities for strategic investment (buckle up – this will take some concentration and it may change your view of the world)

Preamble:

Among the presentations at the BOMA International 100^th Anniversary Celebration in NYC was one from James Reeb, a consultant at Cushman and Wakefield who teaches at Penn State and the University of Pennsylvania, on “The New Age of Trade: Globalism and Industrial Real Estate” – an odd topic for an audience of office building owners and managers. It turned out to be an inspired choice:

The Pivotal Concept – get this and the rest will be easier to understand:

The most startling statement made by the presenter (and the one which galvanized my attention) was that in the world of goods and services real estate is no longer a driver – other costs, such as the costs of labor and distribution, have succeeded real estate as the principal drivers. Real estate is now mostly a tactical decision – not a strategic one.

Ergo: The Golden Age of Real Estate is over:

This means the golden age of real estate (build it and they will come) is over with few exceptions. Cities have been left littered with building detritus being picked over by landlords who scrabble for any tenant available in the last few decades – we have all observed this but stay tuned to better understand it. The malaise that results from downgraded real estate use has been blamed on suburbanization and perimeter malls but it now turns out the underlying causes are systemic and global and happening at an accelerating pace.

Not that this cannot be remediated locally to some extent. Sometimes inspiration strikes and adaptive building re-use can bring about successful transformations – usually at lower economic value than the prior use. But these efforts at adaptive re-use usually fail if they are not accompanied by shared vision between the city and the landlords. An example of where this succeeded is the transformation of the sewing lofts near the docks in New York City now converted to the “Gallery District” successfully. The city provided the signage and zoning to encourage the transformation – but few cities have the scale to pull this off and while it commands lots of local attention it is a side show in the larger context – fighting over a shrinking pie is less satisfying then opening a new bakery!

So, in a world moving at the pace of the Internet, which changes are useful to watch and anticipate if a city is to prosper? Put another way, how can the impact of disintermediation be minimized and reintermediation be seamlessly introduced?

First, to have meaningful dialogue, everyone involved must be retrained to think in terms of the new drivers. For example the cost of a leasing a building should no longer be measured in traditional dollars per square foot. A warehouse, for example, should be measured in cents per pallet position (including the costs of putting the pallet in position, storing it and pulling it for redeployment) not in dollars per square foot of floor area. Looked at this way a building with a cost of $5 per square foot can lose a tenant to a building costing $10 per square foot if the pallet positioning costs are less in the more costly building. You cannot make useful decisions as a developer, owner or a city using the old measuring tapes. It is like measuring in “cubits” when the world uses “meters” – the translation takes too long and the translation is actually more complicated than this analogy.

Thinking “Over the Horizon”:

Sticking with warehousing let’s look over the historical horizon of local and regional real estate markets to see the context in which the decision to rent a “warehouse” building is made today.

First, it is useful to think in terms of continents when considering an overview of goods and services. The best preparation for this is Google Earth. The breathtaking first view of Google Earth is as an observer from space “flying” down to a location, passing over continents and seas to hover over your desired destination.

Using the same “fly over” method in your mind’s eye to view today’s world of economic geography and looking at continents in terms of the level playing field of buying power and not currency (expressed for convenience in USD) North America has 14 Trillion in purchasing power, 24 “European” states also have 14 Trillion in purchasing power and China and India combined have 14 Trillion in purchasing power as well but Asia has significantly more when Japan and city states like Singapore are included.

So the tipping point has already been passed. The world is now officially “Asian” in terms of purchasing power without regard to the vestigial thrashings of the US as a “Superpower” or Europe’s aspirations of regained influence. It is no longer a matter of “when” but “what now?”

First, the impact of having passed the tipping point is that Asia has started changing from a producing area to a consuming area and this is reflected in wages. In Shanghai China wages went up 17.8% last year in real terms – put in North American perspective that would be like raising the average salary from $30,000 to $35,340 in one year! The resulting purchasing power means European boutiques like Versace and Gucci are closing New York stores and opening multiple Asian stores because this is where the profits are.

Labor Shortages determine where components are made:

Asia is running into labor shortages – no matter how surprising this discovery may be. At first China spilled over into Viet Nam and Indonesia looking for low cost (trained and skilled) labor. They soaked up this labor early in the current decade. Now Indian entrepreneurs are going to Africa to open factories and their contracts are coming from China. China is essentially outsourcing to Africa using Indian intermediaries. The pace of this outsourcing to Africa is expected to increase and the biggest change in Africa will not come from Foreign Aid but from training of the labor force by Indian entrepreneurs looking for profits.

This puts the Middle East in perspective doesn’t it? In fact it explains places like Darfur differently and one looks longingly at much of the Palestinian labor force that is going to waste. But let’s stick to the subject and that is the impact of these changes in the distribution of goods and services. For those interested, read “Workforce Crisis” by Ken Dychtwald for a more detailed treatment.

The new shipping paradyne will open new infrastructure investment opportunity:

You need to know one more geo-economic fact before I move on (still with me?). That is that the new Panama Canal is nearing completion and it is as well positioned today to change the world for the transportation of goods as it was 100 years ago when it first opened. Today 5% of the goods of the world pass through the canal but this is about to radically change in two ways:

1. Today goods and parts are packaged in “boxes” and an island is being built off shore in Panama to rationalize the sequencing of these boxes to make final distribution to integrators and final markets in other parts of the world more efficient. “Boxing” when combined with RFID (Radio Frequency Identification) tags make it possible to do enroute what used to be done in warehouses at destinations.
2. The big shipping containers we have all seen (called TEU’s for "Twenty-foot Equivalent Unit") are becoming more sophisticated and at destination points you need storage for between 3 – 4 TEU’s per warehouse door because they are now an integral part of the supply chain. Read “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger” by Marc Levinson for a more detailed treatment.

It will also help you to know that when the canal opens the time in transit from Asia to the densely populated East Coast of the US will be the same by sea or West Coast port and rail. 23 days either way but the cost by sea is less and the contention of rail car availability is avoided.

Mexico and Canada will be big winners:

So where will all these parts made worldwide head in a time when sustainability and carbon footprint dictates that the finishing of goods be near their final destination but labor efficiency is a consideration? The answer is Mexico and Canada.

Mexico for the final integration of parts for consumer goods because it has low cost labor and is strategically between Asia and Africa where parts will come from and is poised on the southern border of the US for easy transportation by truck and rail. Canada will serve the same purpose for business goods that will make use of Russian and Eastern European skilled labor combined with electronics from Asia – Canada is poised on the northern border sandwiching US consumers and businesses who, it turns out have a labor shortage of their own (possibly to be exacerbated by choking off illegal worker entry) and will not be likely to object to this arrangement. These components for integration will be best shipped down the St Lawrence River to ports like Toronto where high skill labor is still available at better rates than US labor and where technology is more quickly adopted than in the US.

Not only Toronto but Hamilton and Windsor will be affected. These cities will see million square foot integration facilities built but the contention of large ports combined with better sequencing make regional cities like Kingston, Ontario excellent locations for 250,000 sq ft purpose built integration, sequencing and value add facilities. Kingston, if it takes up the opportunity, could return to its roots as the historic shipping, consolidation, integration and sequencing railhead associated with river and barge traffic from the St Lawrence River a hundred years ago.

By “purpose built” I mean 300 foot clear span facilities with multiple story height close to appropriate labor pools of people willing to work for $11-$12 an hour on shift work – 70% woman.

A 250,000 foot facility would be best built near a brownfield site where drop containers can be stored like cars in a valet parking lot, near rail, highway and it wouldn’t hurt to be near a small container port. Most existing space in places like Kingston cannot be made to work for the new requirements – trying is a waste of time.

I am going to end here for now but by shifting context to intellectual labor similar changes are afoot for other property types such as office buildings. I will get to these in future blog entry.

Alan Greenspan and Michael Buckley, Director of Real Estate Development Program, Columbia University, Graduate School of Architecture

Dispatch from Manhattan, New York – July 23, 2007

Alan Greenspan set the tone for the convention with an analysis of the real estate market worldwide and Michael Buckley drove home the points with two follow-up sessions that went into the specifics.

Preamble: BOMA International has fulfilled the Mission to represent real estate interests worldwide with 20 National BOMA’s (the most recent Russia) and 17,000 members. When I turned over the gavel in 1984 we had 3,500 members and about five national affiliates. In consequence the scope of real estate analysis has expanded. With this in mind, here is a brief summary of what was said:

Alan Greenspan:

The former Chairman of the US Federal Reserve concentrated his analysis on what he sees as a one-time historic shift in the history of the world. Until the end of the cold war most of the developed world was in a market economy and Russia and the developing world was under a command economy. With the end of Russian dominance the developing world is now making the shift to join the market economy with these results:

1. International wage competition is holding down wages in the developed world (jobs to India) and has resulted in high productivity plus accelerated development in the developing world (the fastest development in world history by quite a margin).
2. This high productivity permits unusually low interest rates and internationalization makes large companies even more resilient because they are insulated from local (read US, UK, etc) fluctuations in markets. When local markets are stagnant international companies can switch resources to places that are growing such as Asia or South America.
3. As a consequence of high productivity and low interest rates money is available (lots of money) to acquire assets and real estate is an asset class that can absorb a lot of money. It is a good time to be a developer – but not so good to be an owner.
4. Historically owners saw 20% returns from institutional grade commercial buildings – today that is down to 10%. Developers, on the other hand, can sell buildings for very high multiples.
5. Important safety tip from Greenspan: we are about half way through the impact of internationalization and signs are starting to show that we are reaching the apex of the economic shifts. Example, once we would train international students in our universities and they struggled to stay in the developed world. Today they want to go home because their opportunities are bigger at home.
6. A very significant result of this shift of talent to the developing world is that these countries do not have safety nets. Along with high growth they have high “real” saving (savings from income, not cash from tapping into appreciated real estate).
7. And where do they invest the savings? In the developed world! Meaning that over time the ownership of the very large companies is shifting to “world ownership” without much allegiance to the country where they are incorporated and theoretically regulated.
8. Thus, wisdom dictates caution in making decisions that assume the status quo will continue more than a few years – the world in changing very fast.

Michael Buckley drove these points home in the course of about four hours of relentless hammering on specific examples of national strategic investment in real estate - investment only able to be done in countries recently under command economies. For example, the shift of the equivalent of the entire population of Europe to the Pearl River Valley of China has resulted in China becoming the world’s workshop – made a bit easier by restricting family size and thus permitting woman to augment the mature workforce. Singapore’s very specific “purchase” of the world’s scientific talent for their laboratories is another example. Buckley taught at MIT and experienced this first hand. Promising talent would be offered what they really cared about – million dollar research budgets as well as good lifestyles if they moved to Singapore.

So where does all this take us? Greenspan managed to deliver his rather upbeat message sounding like he was at the funeral of a friend. Buckley came off like a fire inspector warning everyone to take basic precautions because a fire could happen at any time. I have seldom heard good news delivered with so many warnings.

Bottom line? This is a good time to get ready for the changes to come like the ant that is storing away food for the winter. The problem is that not enough people (read cities and universities) are taking this long view – and you need to be one of them to profit from the future and avoid the slippery slope that awaits the unprepared.

BOMA’s 100th Anniversary

Dispatch from Manhattan, New York – July 22, 2007

The residents of the largest city in America found themselves consulting their calendars instead of their watches last night as New York’s harbor was lit with a fireworks display equal to any US Independence Day Celebration in recent memory.

The fireworks were not the result of a 4^th of July time warp but a celebration of the 100^th Anniversary of the Building Owners and Managers Association International.

The kick off for the celebrations was held at the site of the former World Trade Center where the world’s tallest buildings from 1973 – 1978 once stood at 1,368 feet and 1,352 feet respectively. Chicago’s Sears Tower took over the title at that point.

The fact that this event was held at the site of largest disaster to befall a tall building was not a coincidence. 3,000 owners and managers of high rise building (over 10 stories) around the world were there to witness the birth of a new monument to the determination to recreate, in these troubled times, a new building on the site for future generations to see and remember this era.

The new Freedom Tower is rising from its foundations on the World Trade Center site as a statement of the indominatable need of a culture to be remembered.

This need to be remembered is very old. Witness the ancient Stonehenge and the biblical Tower of Babble (a Ziggurat in ancient Babylonia).

The Great Pyramid of Giza was built around 2500 B.C. and held the title with its 481 feet until the Eiffel Tower in Paris was built in 1889 at a height of 985 feet, or 1,023 feet including the flag pole. In 1931 New York's Empire State Building held the title at 1,250 feet – over a quarter of a mile high. Chicago's Sears Tower is 1,451 feet tall. The CN Tower in Toronto is 1,815 feet tall and like the Eiffel tower is unoccupied – I dedicated the CN Tower in 1976 as one of my first duties as the Chief Staff Officer of BOMA International. Malaysia's Petronas Towers is 1,483 feet tall.

The Middle East will regain the title for the world’s tallest building for the first time since the Great Pyramid with the Burj, a 1,680-foot skyscraper still under construction in oil-rich Dubai that claimed the title only a few days ago and has become the world's tallest building, surpassing Taiwan's Taipei 101 which has dominated the global skyline at 1,667 feet since 2004.

The Burj in Dubai is expected to be finished by the end of 2008 and its planned final height has been kept secret. The state-owned development company Emaar Properties, one of the main builders in rapidly developing Dubai, said only that the tower would stop somewhere above 2,275 feet (nearly double the height of the Empire State Building, eclipsing the CN Tower and close to a half mile high) setting a new high mark for the incomplete Freedom Tower to shoot for.