In March, Saranac Partners welcomed clients to a lunch hosted by Thomas Sevcik, Co-Founder and CEO of Arthesia Group, a consultancy which provides strategic insight on cities. Thomas’ talk centred on the evolution from ‘Cities 1.0’ to ‘Cities 2.0’, and the opportunities this is creating:

‘Cities 1.0’

• After the growth of cities in the first half of the 20^th century, they declined in the 1960s/70s as affluent groups left for suburbia
• Cities regenerated in the 1980s, eventually resulting in the rise of ‘world cities’ in the 1990s/2000s, inhabited by an increasingly well-connected global elite, who have more in common with each other than they do parts of their own countries

Challenges facing ‘Cities 2.0’

• The dichotomy between ‘made money’ and ‘make money’ cities: cities concerned with tourist infrastructure, second homes, restaurants and museums, versus cities focused on industry and therefore mass transportation, schools, hospitals and other services
  • ‘Made money’ cities becoming more transient and based around tourism & leisure – in Kensington & Chelsea, for example, 40% of properties are not permanently occupied
• The rise of the ‘intermediate’ city:
  • ‘Donut-shaped’ cities with a very dense inner ‘zone 1’ based around leisure and tourism, surrounded by residential communities
• The ‘digitisation’ of cities and how the interaction between virtual and physical spaces changes interaction within cities
  • The interconnectedness of marketing and place traditionally very important: for example, one would visit a shop and encounter another during the same visit; further, areas can become known for the provision of certain types of products
  • However, with the rise of digital marketing, place becomes less important. If a pop-up shop is to be primarily marketed on Instagram, it does not need to be in a prime location

Functions with a possibly higher value in the future

• ‘Storage plus’: high-end storage for luxury car collections, art collections – there is a growing demand for these to be accessible
• Farming/urban agriculture: the exploitation of vertical space
• Showrooms & brand experiences: people are increasingly concerned with ‘experiencing’ the brand, but purchasing the products themselves online

And lower

• Office space
• Car parking
• Mid-market hotels, due to the rise of Airbnb and others

The New Frontier

• ‘Para-cities’, ‘special purpose zones’ and ‘private cities’
• Urban areas built to serve particular industry/manufacturing, complete with infrastructure and amenities
• These may be accompanied by distinct legislative systems set up for special purposes

Opportunities

• Building the intermediate city
• New land use and new mixes of land use
• Non-human, automated uses of buildings, such as agriculture and storage