Thriving in Turbulence Qube Global VisionConference - LondonSeptember 14th 2011    Rohit Talwar CEO - Fast Futurerohit@fas...
ContentsPresentation              p. 3About Fast Future         p. 86Background Materials      p. 97Image Sources         ...
Emerging Business Drivers• Total  Sustainability• Business  Models• Science• Emerging  Markets                      3
The World in 2015                    4
How do we get there from Here? Customer Continuous   New  Insight Innovation Business                      Models    5
Growth is not Guaranteed…                            6
…Thinking is Back in Fashion                           7
UK Economy             8
UK Property Trends                     9
A Dying Breed?                 10
Olympic Opportunity                      11
Scenarios for Europe                       12
Strategic Adaptability -  Prepare for Alternative Scenarios     8-10%                       Suspicious   Love is in       ...
Transformational Change?   It’s Only Just Begun                           14
10 Key Patterns of Change Shaping the Next Decade      Economic turbulence, a shift in wealth from west to east and politi...
Demographic Destinies 2 billion more people in 40 years –Demographics is Driving Economics         448    739 691         ...
Life Redefined –        Lifespans are IncreasingUnder 50’s have 90%chance of living to 100.Aubrey de Grey suggestswe could...
BCG’S 2011 Global Challengers and Emeriti: Origin Countries35   333025          202015              1410                  ...
New Industry Models and Mindsets                              19
Swoopo - The $17,739 iPad                            20
Access vs. Ownership                       21
Real Time / Predictive Analytics                              22
Think Like the Customer e.g. Open Innovation                          23
Complexity             24
Complex Systems                  25
Chaordic Systems                   26
Mess       27
28
TMT – Convergence and ImmersionTelephony                                     Connectivity•   Voice                        ...
Next Generation Smart Phones                           30
Daily Social Media Offers e.g. Twitter                                   31
Holographic Displays                       32
Augmented Reality atCopenhagen Airport                       33
Gesture Interfaces                     34
Touchable Holograms                      35
Interactive Surfaces                       36
‘Virtual Assistants’                       37
Ambient Intelligence                       38
3D Printing              39
Cloud Computing                  40
New Measurement Models / Tools                           41
Security           42
Are Biometrics the Answer?                             43
Where are the Opportunities?                           44
Combating Climate Change                           45
Innovative Recycling                       46
Green Buildings - $600Bn by 2015                                    47    Source: PR Log, December 2010
Green Skills DeficitFrom the end of 2012the Green Deal will belaunched, providing upto 200,000 jobsUK 3rd in global greenb...
Ultra-Quick Construction                           49
New Building Systems                       50
More Efficient Design                        51
Award Winning Concepts                         52
Wooden Cities?                 53
Floating Houses?                   54
2010 Turner Prize for Innovation in    Construction Technology                                 55
Self-Healing Concrete                        56
Fly Ash Concrete                   57
Wool and Seaweed Bricks                          58
Improving Indoor Air Quality                               59
The Need for ‘Systems Thinking’                             60
Future of Financing                      61
Future Growth Industries                           62
Science Based Future Jobs1. Body Part Maker2. Nano-Medic3. Pharmer of Genetically   Engineered Crops and   Livestock4. Mem...
Science Enabled Future Jobs11. Old Age Wellness Manager /    Consultant Specialists12. Space Pilots, Architects and    Tou...
Rising Infrastructure Spending• CIBC projects up to $35  trillion in public works  by 2030 (1)• Annual spend:   – North Am...
Reinventing Retail                     66
Opening Up Education                       67
Transforming Healthcare                          68
Green Transport Revolution                             69
New Energy Solutions                       70
Nanomaterials - $100Bn                         71
European Smart Grid - $200Bn+                                72
Bio-pharma - $300Bn+ by 2020                           73
Industrial Biotech - $650Bn+ by 2020                                 74
How are Leaders Responding?                          75
Make Time and Space for Change                             76
Be Magnetic              77
Create Tolerance of Uncertainty                             78
Broad Scans and Deep Dives                         79
Map the Development Timeline       for Your Sector                           80
Embrace Networks and Associations                              81
Incubate New Business Models                          82
Seek Breakthrough Innovations                           83
Conclusions - Crafting Strategy• Total Sustainability Agenda• Understand emerging  drivers• Pre-empt or respond?• Service ...
Thank YouRohit TalwarCEOFast Futurerohit@fastfuture.comTel +44 (0)20 8830 0766Mob +44 (0)7973 405145Twitter http://twitter...
About Fast Future                    86
Fast Future –            Retail and Real Estate              Industry Services• Live Events - Speeches, briefings and work...
Fast Future•   Research, consulting, speaking, leadership•   5-20 year horizon - focus on ideas, developments, people,    ...
Hotels 2020 – Objectives• Identify key drivers of change  for the globally branded hotel  sector over the next decade• Exa...
Convention 2020•   Global strategic foresight study to help the meetings industry prepare for    the decade ahead - Indust...
Future Convention Cities Initiative•   Members - Cities aiming to be global leaders in delivery of business events•   Focu...
Rohit Talwar•   Global futurist and founder of Fast Future Research.•   Award winning speaker on future insights and strat...
Designing Your Future           Key Trends, Challenges and Choices• 50 key trends• 100 emerging trends• 10 major patterns ...
Our Services                                       Bespoke research; Identification &                                     ...
Example Projects•   Public and private client research e.g. :     – Development of Market Scenarios, emerging trends and s...
Example Clients                  96
Background Materials             97
UK Economic Outlook                                                                                                    98S...
UK Economic Outlook                                                                                                    99S...
Public Sector Net Debt to GDP            Ratio                                                                            ...
Alternative Inflation Scenarios                                                                                           ...
Medium Term IndependentForecasts for UK Economy                                                                           ...
Projections of UK Age-Related Public Spending (% of GDP)                                                                  ...
E7 vs. G7       The contenders                                  Estimated overtaking                           Estimated o...
The Big 4 Share of Global GDP                  (PwC)% of global economy (ppp)                                             ...
HSBC: World in 2050 Source: HSBC: The World in 2050: Quantifying the Shift in the Global Economy, January 2011   106
107
Background Note OECD Debt                                        Country                                                  ...
0.5                                                                                                               1.5     ...
Background Note            GDP per capita, Real GDP,              Labour productivity                  Growth of real GDP ...
Fastest growing cities to 2025Growthp.a %                                  Hanoi Ho Chi                                   ...
Biggest city economies inGrowthp.a %                           2025                                                Shangha...
Average Disposable Income Growth            2010-2020   Page 113
Global Competitiveness Index    2010–2011 rankings  GCI 2010 - 2011 rank                Country/Economy                  G...
Global Innovation Index 2010     Country                                    GG 2009-10 Score                           Ran...
Innovative Cities                                                            Index         Cultural Human        Networked...
The Eurozone crisis - 3 Scenarios•    Baseline – the situation in 2011 so far…•    The initial issue of the European Finan...
Scenario 1 – Inflationary Debt               Spiral  •     Finance ministers gut the Commission‘s already weak economic   ...
Scenario 2 - Default•      Finance ministers and the European Parliament agree tough governance       package•      But at...
Scenario 3 – Federal Eurozone              Emerges•   A strong, federal ‗Eurozone‘ emerges.•   Eurozone members conclude t...
Population Change 2010-2030Source: Standard Chartered, reprinted in Business Insider, January 2011 http://www.businessinsi...
House Price Forecasts   •    Property values in the UK are set to fall 4.5% this year and 10.5% by the        end of 2015,...
House Price Forecasts   •    NIESR predicts real house prices - values after inflation has been taken        into account ...
New Construction•   Official figures revealed the sharpest fall in new orders for the construction    industry since 1980....
New Construction•   Areas in the south and west were hardest hit – with north London, Bristol    and the Medway in Kent su...
UK Investment Trends      •    UK real estate investors stayed cautiously positive in the second quarter of           2011...
UK Investment Trends      •    Robert Stassen, Head of EMEA Capital Markets Research at Jones Lang           LaSalle, note...
UK Investment Trends      •    Continued growth is expected in the second half of 2011, but investors           might be m...
Return Forecast      •    The All Property total return forecast for this year is 8%, down from Collier‘s           quarte...
Return Forecast•   ‗The strongest returns are expected in 2013 as the economy begins to    approach trend growth. From 201...
Geographic Variation                       131
Geographic Variation       •    London has been well documented as experiencing a boom in buy to let,            but there...
Geographic Variation     •     He believes that experienced investors are recognizing that           stagnant house prices...
Geographic Variation       •    ‗Capital growth is part of a medium to long-term investment, especially in            the ...
Buy-to-Let•   Investors in student properties have benefited from the imbalance between    the supply of accommodation and...
Buy-to-Let•   Its research of 114 universities in England shows that there are a number of    university towns that will c...
Buy-to-Let                                                                                                                ...
Commercial Rental Growth      Forecasts                           138  Source: GVA, Q3 2011
Investment Market Outlook                                                                                139Source: GVA, Q...
The UK Property Sector                         140
House Price Could Rise 14% by                2015       •    The Centre for Economics and Business Research says house pri...
House Price Could Rise 14% by                2015       •    Shehan Mohamed, economist at Cebr, says: ―We forecast an aver...
UK Housing Forecasts                       143
UK Housing Forecasts       •    UK Ministers themselves expect to deliver and exceed the stated target of            150,0...
UK Housing Forecasts      •     The National Housing Federation has predicted home ownership in England            to slum...
UK Housing Forecasts      •     The average house price in England will meanwhile rise by 21.3 percent            over the...
Green Skills Deficit•   John Alker of the UK Green Building Council says that the green skills    deficit is the major cha...
UK 3rd in Green Building league•   Norway has topped a global league of green building for the second year in    a row, fo...
Background Note                                  Climate Change     •    According to a 2011 report released by consultanc...
Ecosystem Services and   Biodiversity Loss                         150
Background Note                                         Imperatives     •    ‗The UK‘s embedded and unconscious dependence...
Background Note                                           Imperatives      •    Despite the potential impact, research by ...
Background Note                                         Imperatives     •    ―When estimates in the study put economic imp...
Background Note                                         Imperatives           – Unpredictability in supply chain pricing a...
Background Note                                         Imperatives     •    Jon Williams, partner, sustainability & clima...
Background Note                     Global Challengers     •    In a January 2011 report, The Boston Consulting Group (BCG...
Background Note                                                            Talent     •     Having access to the best tale...
Background Note                                Skills Shortages     •    Half of employers (51%) are concerned they will n...
Background Note                                Skills Shortages     •    Despite the recession, nearly half of employers (...
Change on the Horizon?                         160
Change on the Horizon?•    A March 2011 report on housing demand up to 2025 by the Institute of     Public Policy Research...
Change on the Horizon?      •   2011 will see major changes to the framework within which housing          operates.      ...
Innovation In The Property Sector                               163
Ultra-Quick Construction       •    The most recent example of the striking capability of the Chinese building            ...
Ultra-Quick Construction       •    In addition the building uses several technologies to result in energy            effi...
Floating Houses?       •    The FLOATEC project research project is developing "amphibian houses―            that are desi...
Floating Houses?       •    The key to floating structures lies in their foundations, which are made up of            mult...
Floating Houses?       •    This modified polystyrene is inserted in multiple layers in between stratums            of com...
Wooden Cities?•   3 billion will need new affordable housing in next 20 years.•   100,000,000 effectively homeless worldwi...
Wooden Cities?•   Apart from the foundations, wood can replace the use of steel and concrete    in buildings and becomes t...
Green Buildings                  171
Installed PV as a Trend                          172
Installed PV as a Trend       •    Installations of PV systems in United Kingdom amounted to 96 Megawatts            (MW) ...
Green Buildings      •     Researchers at the Ningpo, China campus of the University of Nottingham            (UNNC) have ...
Green Buildings      •     The researchers say the material can be manufactured in a variety of            shapes and size...
Innovative Recycling      •     Mexicos Tubohotel, which opened in 2010, is a unique and affordable            holiday des...
Innovative Recycling      •     Because they are sturdy, waterproof, transportable, and perhaps only a little            b...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
Rohit Talwar   Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11  - presentation and background...
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Presentation to Qube's annual user conference on how firms across the property sector can survive and thrive in a turbulent future. Explores economic drivers, business trends, emerging technologies, future grwoth sectors, opportunities for innovation in property investment, construction and management and driving strategic change.

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Rohit Talwar Thriving in Turbulence - Qube Software Annual Conference - London - 14 09 11 - presentation and background materials

  1. 1. Thriving in Turbulence Qube Global VisionConference - LondonSeptember 14th 2011 Rohit Talwar CEO - Fast Futurerohit@fastfuture.comwww.fastfuture.com 1
  2. 2. ContentsPresentation p. 3About Fast Future p. 86Background Materials p. 97Image Sources p. 204 2
  3. 3. Emerging Business Drivers• Total Sustainability• Business Models• Science• Emerging Markets 3
  4. 4. The World in 2015 4
  5. 5. How do we get there from Here? Customer Continuous New Insight Innovation Business Models 5
  6. 6. Growth is not Guaranteed… 6
  7. 7. …Thinking is Back in Fashion 7
  8. 8. UK Economy 8
  9. 9. UK Property Trends 9
  10. 10. A Dying Breed? 10
  11. 11. Olympic Opportunity 11
  12. 12. Scenarios for Europe 12
  13. 13. Strategic Adaptability - Prepare for Alternative Scenarios 8-10% Suspicious Love is in Minds the AirGDPGrowth Dancing inIndia 6-7% the DarkandChina Road to Nowhere 1-2% Recession 0% 1-2% 2-3% GDP Growth Europe, the USA and Japan 13
  14. 14. Transformational Change? It’s Only Just Begun 14
  15. 15. 10 Key Patterns of Change Shaping the Next Decade Economic turbulence, a shift in wealth from west to east and political uncertainty are shaping the landscape Natural Society in Resource Demographic Transition Challenges Destinies Geo-political Generational Complexity Economic Crisis Crossroads and Power Shift RethinkingTechnology Talent,and Science Education, Training Enterprise 3.0 Global Internet Expansion 15 Source: Designing your Future – Key Trends, Challenges and Choices – Fast Future
  16. 16. Demographic Destinies 2 billion more people in 40 years –Demographics is Driving Economics 448 739 691 5231 344 1998 4157 729 1030 585 16 2010 2050 Source : United Nations
  17. 17. Life Redefined – Lifespans are IncreasingUnder 50’s have 90%chance of living to 100.Aubrey de Grey suggestswe could live to 500 or 1000What are the health,consumption and resourceimplications?What kind of opportunitieswill be created? 17
  18. 18. BCG’S 2011 Global Challengers and Emeriti: Origin Countries35 333025 202015 1410 8 6 5 5 4 3 3 2 2 1 1 1 1 1 0 18 Source: Boston Consulting Group, January 2011
  19. 19. New Industry Models and Mindsets 19
  20. 20. Swoopo - The $17,739 iPad 20
  21. 21. Access vs. Ownership 21
  22. 22. Real Time / Predictive Analytics 22
  23. 23. Think Like the Customer e.g. Open Innovation 23
  24. 24. Complexity 24
  25. 25. Complex Systems 25
  26. 26. Chaordic Systems 26
  27. 27. Mess 27
  28. 28. 28
  29. 29. TMT – Convergence and ImmersionTelephony Connectivity• Voice • Cellular• Messaging • Up to 14 bands• SIM card • WLAN/BT• Phonebook • GPS• Ring Tones • NFC• Security • FMData/ MultimediaEnterprise • Camera 8-16M • Camcorder• 100Mbps • 24M Color Display• Email • Memory (160GB)• IMS • Multiformat A/V• Browsing • HD Video/TV out• VPN • Games• PIM• Ecommerce Software (50-100M Tps) • Protocols • DRM• Payments • Middleware • Applications • User Interface • Minimize fragmentation 29
  30. 30. Next Generation Smart Phones 30
  31. 31. Daily Social Media Offers e.g. Twitter 31
  32. 32. Holographic Displays 32
  33. 33. Augmented Reality atCopenhagen Airport 33
  34. 34. Gesture Interfaces 34
  35. 35. Touchable Holograms 35
  36. 36. Interactive Surfaces 36
  37. 37. ‘Virtual Assistants’ 37
  38. 38. Ambient Intelligence 38
  39. 39. 3D Printing 39
  40. 40. Cloud Computing 40
  41. 41. New Measurement Models / Tools 41
  42. 42. Security 42
  43. 43. Are Biometrics the Answer? 43
  44. 44. Where are the Opportunities? 44
  45. 45. Combating Climate Change 45
  46. 46. Innovative Recycling 46
  47. 47. Green Buildings - $600Bn by 2015 47 Source: PR Log, December 2010
  48. 48. Green Skills DeficitFrom the end of 2012the Green Deal will belaunched, providing upto 200,000 jobsUK 3rd in global greenbuilding league 48
  49. 49. Ultra-Quick Construction 49
  50. 50. New Building Systems 50
  51. 51. More Efficient Design 51
  52. 52. Award Winning Concepts 52
  53. 53. Wooden Cities? 53
  54. 54. Floating Houses? 54
  55. 55. 2010 Turner Prize for Innovation in Construction Technology 55
  56. 56. Self-Healing Concrete 56
  57. 57. Fly Ash Concrete 57
  58. 58. Wool and Seaweed Bricks 58
  59. 59. Improving Indoor Air Quality 59
  60. 60. The Need for ‘Systems Thinking’ 60
  61. 61. Future of Financing 61
  62. 62. Future Growth Industries 62
  63. 63. Science Based Future Jobs1. Body Part Maker2. Nano-Medic3. Pharmer of Genetically Engineered Crops and Livestock4. Memory Augmentation Surgeon5. ‗New Science‘ Ethicist6. Vertical Farmers7. Climate Change Reversal Specialist8. Alternative Vehicle Developers9. Quarantine Enforcer 6310. Weather Modification Police
  64. 64. Science Enabled Future Jobs11. Old Age Wellness Manager / Consultant Specialists12. Space Pilots, Architects and Tour Guides13. Virtual Lawyer14. Avatar Manager / Devotees - Virtual Teachers15. Narrowcasters16. Waste Data Handler17. Virtual Clutter Organizer18. Time Broker / Time Bank Trader19. Social Networking Worker20. Personal Branders 64
  65. 65. Rising Infrastructure Spending• CIBC projects up to $35 trillion in public works by 2030 (1)• Annual spend: – North America $180Bn – Europe $205Bn – Asia $400Bn – Africa $10Bn 65
  66. 66. Reinventing Retail 66
  67. 67. Opening Up Education 67
  68. 68. Transforming Healthcare 68
  69. 69. Green Transport Revolution 69
  70. 70. New Energy Solutions 70
  71. 71. Nanomaterials - $100Bn 71
  72. 72. European Smart Grid - $200Bn+ 72
  73. 73. Bio-pharma - $300Bn+ by 2020 73
  74. 74. Industrial Biotech - $650Bn+ by 2020 74
  75. 75. How are Leaders Responding? 75
  76. 76. Make Time and Space for Change 76
  77. 77. Be Magnetic 77
  78. 78. Create Tolerance of Uncertainty 78
  79. 79. Broad Scans and Deep Dives 79
  80. 80. Map the Development Timeline for Your Sector 80
  81. 81. Embrace Networks and Associations 81
  82. 82. Incubate New Business Models 82
  83. 83. Seek Breakthrough Innovations 83
  84. 84. Conclusions - Crafting Strategy• Total Sustainability Agenda• Understand emerging drivers• Pre-empt or respond?• Service is the ‗killer app‘ 84
  85. 85. Thank YouRohit TalwarCEOFast Futurerohit@fastfuture.comTel +44 (0)20 8830 0766Mob +44 (0)7973 405145Twitter http://twitter.com/fastfutureLinkedIn http://www.linkedin.com/in/talwarwww.fastfuture.comwww.convention-2020.comBlog http://widerhorizons.wordpress.comSignup for our newsletters / Download past editions at www.fastfuture.comWatch a short video of Rohit at http://www.travelmole.tv/watch_vdo.php?id=14300Download the Hotels 2020: Beyond Segmentation Report athttp://www.amadeus.com/hotelit/beyond-segmentation.html 85
  86. 86. About Fast Future 86
  87. 87. Fast Future – Retail and Real Estate Industry Services• Live Events - Speeches, briefings and workshops for executive management and boards of retailers, property and construction firms, airlines, airports, hotels, venues, CVB‘s and associations• Future Insights - Customised research on emerging trends, future scenarios, technologies and new markets• Immersion - ‗Deep dives‘ on future trends, market developments, emerging issues and technology advances• Strategy - Development of strategies and business plans• Innovation - Creation of business models and innovation plans• Engagement - Consultancy and workshop facilitation 87
  88. 88. Fast Future• Research, consulting, speaking, leadership• 5-20 year horizon - focus on ideas, developments, people, trends and forces shaping the future• Clients – ING, ABN Amro, Laing O‘Rourke – Marks and Spencer – Airports - Aeroports de Paris / Schiphol Group – Vancouver Airport Services – Industry Associations – ICCA, ASAE, PCMA, MPI – Corporates - GE, Nokia, Pepsi, IBM, Intel, Orange, O2, Siemens, Samsung, GSK, SAPE&Y, KPMG, Amadeus, Sabre, Travelport, Travelex, ING, Santander, Barclays, Citibank, DeutscheBank – Governments - Dubai, Finland, Nigeria, Singapore, UK, US – Convention Bureaus – Seoul, Sydney, London, San Francisco, Toronto, Abu Dhabi, Durban, Athens, Slovenia, Copenhagen – Convention Centres – Melbourne, Adelaide, Qatar, QEIICC – Hotels - Accor Group, Preferred, – Intercontinental – PCO‘s - Congrex, Kenes 88
  89. 89. Hotels 2020 – Objectives• Identify key drivers of change for the globally branded hotel sector over the next decade• Examine the implications for:  Hotel strategy  Brand portfolio  Business models  Customer targeting  Innovation 89
  90. 90. Convention 2020• Global strategic foresight study to help the meetings industry prepare for the decade ahead - Industry-wide sponsors• Multiple outputs Nov 2009 – December 2011• Current studies on future strategies for venues and destinations 90
  91. 91. Future Convention Cities Initiative• Members - Cities aiming to be global leaders in delivery of business events• Focus - Maximising long term economic benefit of events• Core Activities - Research, sharing of expertise and best practices• Engagement Model - Meet four time a year prior to major industry events• Management - Initiated and co-ordinated by Fast Future 91
  92. 92. Rohit Talwar• Global futurist and founder of Fast Future Research.• Award winning speaker on future insights and strategic innovation – addressing leadership audiences in 40 countries on 5 continents• Author of Designing Your Future• Profiled by UK’s Independent Newspaper as one of the Top 10 Global Future Thinkers• Led futures research, scenario planning and strategic consultancy projects for clients in telecommunications, technology, pharmaceuticals, banking, travel and tourism, environment, food and government sectors• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De Beers, DHL, EADS, Electrolux, E&Y, GE, Hoover, Hyundai, IBM, ING, Intel, KPMG, M&S, Nakheel, Nokia, Nomura, Novartis, OECD, Orange, Panasonic, Pfizer, PwC, Samsung, Shell, Siemens, Symbian, Yell , numerous international associations and governments agencies in the US, UK, Finland, Dubai, Nigeria, Saudi Arabia and Singapore.• To receive Fast Future’s newsletters please email rohit@fastfuture.com 92
  93. 93. Designing Your Future Key Trends, Challenges and Choices• 50 key trends• 100 emerging trends• 10 major patterns of change• Key challenges and choices for leaders• Strategic decision making framework• Scenarios for 2012• Key futures tools and techniques• Published August 2008• Price £49.95 / €54.95/ $69.95• Email invoice request to rohit@fastfuture.com 93
  94. 94. Our Services Bespoke research; Identification & Analysis of Future Trends, Drivers & Shocks Public Speaking, In- Company Briefings, Accelerated Scenario Seminars and Workshops Planning, Timelining & Future MappingPersonal Futuring for Leadersand Leadership Teams Expert Consultations & Futures Think Tanks Identification of Design & Facilitation of Opportunities for Innovation, Incubation & Innovation and Strategic Venturing Programmes Investment Strategy Creation & Development of Implementation Roadmaps 94
  95. 95. Example Projects• Public and private client research e.g. : – Development of Market Scenarios, emerging trends and strategies for key clients – Government and OECD Scenario Projects – e.g. Migration 2030, Future of Narcotics, Chemical Sector, Family 2030 – Scenarios for the global economy for 2030 and the implications for migration – Designing Your Future (Published August 2008) – book written for the American Society of Association Executives & The Center for Association Leadership – Global Economies – e.g. The Future of China – the Path to 2020 – The Shape of Jobs to Come – Emerging Science and Technology Sectors and Careers – Winning in India and China – The Future of Human Resources – Exploiting the Future Potential of Social Media in UK Small to Medium Enterprises – Convention 2020 – the Future of Business Events – Future Convention Cities Initiative – Maximising Long-term Economic Impact of Events – One Step Beyond – Future trends and challenges for the events industry – Hotels 2020: Beyond Segmentation – Future Hotel Strategies – The Future of Travel and Tourism in the Middle East – a Vision to 2020 – Future of Travel and Tourism Investment in Saudi Arabia – Aviation and Airports e.g. Aviation 2030 95
  96. 96. Example Clients 96
  97. 97. Background Materials 97
  98. 98. UK Economic Outlook 98Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
  99. 99. UK Economic Outlook 99Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
  100. 100. Public Sector Net Debt to GDP Ratio 100 Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
  101. 101. Alternative Inflation Scenarios 101 Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
  102. 102. Medium Term IndependentForecasts for UK Economy 102 Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
  103. 103. Projections of UK Age-Related Public Spending (% of GDP) 103 Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
  104. 104. E7 vs. G7 The contenders Estimated overtaking Estimated overtaking dates based on GDP at dates based on GDP at PPPs MERs E7 vs G7 2017 2032 China vs US 2018 2032 India vs Japan 2011 2028 Russia vs Germany 2014 2042 Brazil vs UK 2013 2023 Mexico vs France 2028 2046 Indonesia vs Italy 2030 2039 Turkey vs Canada 2020 2035Source: PwC, January 2011 104http://www.ukmediacentre.pwc.com/News-Releases/UK-risks-playing-in-the-slow-lane-of-history-as-economic-power-shifts-from-the-G7-to-the-E7-fcb.aspx
  105. 105. The Big 4 Share of Global GDP (PwC)% of global economy (ppp) Source: PwC: January 2010 105 http://www.ukmediacentre.pwc.com/Content/Detail.asp?ReleaseID=3547&NewsAreaID=2 UK* - Fast Future calculation using IMF projections – www.imf.org/weo
  106. 106. HSBC: World in 2050 Source: HSBC: The World in 2050: Quantifying the Shift in the Global Economy, January 2011 106
  107. 107. 107
  108. 108. Background Note OECD Debt Country 2010 deficit, % of GDP 2010 public debt, % of GDP Germany -5.3 54.7Levels (2010) France -8.6 60.7 Italy -5.4 100.8 United Kingdom -13.3 59 Austria -5.5 42.9 Belgium -5.6 85.4 Czech Republic -5.6 5.3 Denmark -5.4 1.6 Finland -4.8 -46.4 Greece -9.8 94.6 Hungary -4.1 62.1 Ireland -12.2 38 Luxembourg -4.3 .. Netherlands -5.9 36.5 Poland -7.8 32.4 Portugal -7.6 62.6 Slovak Republic -6.3 13.3 Spain -8.5 41.6 Sweden -3 -13.1 108Source: OECD, 2011 https://spreadsheets.google.com/ccc?key=0AonYZs4MzlZbdDZsU2k2VEQ2elkwcnNDOTNHS3ZwRkE&hl=en#gid=0
  109. 109. 0.5 1.5 2.5 3.5 0 1 2 3 4 Latvia Estonia Ireland Romania Slovakia Lithuania Hungary Poland Bulgaria Slovenia Sweden Cyprus Finland Austria Czech Rep. Netherlands Denmark France UK Belgium SpainSource: Economist Intelligence Unit, January 2011 http://country.eiu.com Portugal Germany Greece Italy 109 2011-2030 Annual GDP Growth (%)
  110. 110. Background Note GDP per capita, Real GDP, Labour productivity Growth of real GDP per head Growth of real GDP Labour productivity growth 2011-20 2021-30 2011-30 2011-20 2021-30 2011-30 2011-20 2021-30 2011-30 Brazil 3.7 3.3 3.5 4.4 3.7 4.1 2.8 3.0 2.9 Russia 3.7 3.2 3.5 3.3 2.7 3.0 3.5 3.5 3.5 India 5.8 4.4 5.1 7.3 5.6 6.5 4.8 3.9 4.3 China 6.5 4.1 5.3 7.0 4.3 5.7 6.3 4.3 5.3 Canada 1.7 1.7 1.7 2.6 2.5 2.5 1.9 2.3 2.1 France 1.3 1.7 1.5 1.7 1.9 1.8 1.4 1.8 1.6 Germany 1.8 1.4 1.6 1.8 1.3 1.5 1.7 2.2 1.9 Italy 1.0 1.4 1.2 0.9 1.1 1.0 0.9 1.8 1.4 Japan 1.2 1.8 1.5 0.8 1.1 1.0 1.6 1.9 1.8 UK 1.0 1.4 1.2 1.7 2.0 1.8 1.4 1.4 1.4 USA 1.6 1.9 1.8 2.5 2.7 2.6 1.6 2.3 2.0 110 Source: Economist Intelligence Unit, January 2011 http://country.eiu.com
  111. 111. Fastest growing cities to 2025Growthp.a % Hanoi Ho Chi Minh City Changchun Addis Guangzho Ababa u Xian Lucknow Economy in $ billion (2025) Bubble size denotes size of economy in 2008Source: PwC ‗Which are the largest city economies in the world and how might this change by 2025? 111
  112. 112. Biggest city economies inGrowthp.a % 2025 Shanghai Mumbai Sao Paulo Buenos Aires Mexico City Moscow Chicago New Paris L. York Tokyo A Economy in $ billion (2025) Bubble size denotes size of economy in 2008Source: PwC ‗Which are the largest city economies in the world and how might this change by 2025? 112
  113. 113. Average Disposable Income Growth 2010-2020 Page 113
  114. 114. Global Competitiveness Index 2010–2011 rankings GCI 2010 - 2011 rank Country/Economy GCI 2009 - 2010 rank 4 United States 2 5 Germany 7 6 Japan 8 12 United Kingdom 13 15 France 16 16 Australia 15 22 Korea 19 27 China 29 44 Indonesia 54 51 India 49 58 Brazil 56 63 Russia 63 114 Source: WEF, 2010-2011 http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf
  115. 115. Global Innovation Index 2010 Country GG 2009-10 Score Rank Iceland 4.86 1 Sweden 4.85 2 Hong Kong 4.83 3 Switzerland 4.82 4 Denmark 4.72 5 Finland 4.66 6 Singapore 4.65 7 Netherlands 4.62 8 New Zealand 4.60 9 Norway 4.59 10 US 4.57 11 UK 4.42 14 Australia 4.28 18 Korea 4.24 20 115Source: INSEAD, Confederation of Indian Industry http://www.globalinnovationindex.org/gii/main/reports/2009-10/Rankings_09-10.pdf
  116. 116. Innovative Cities Index Cultural Human Networked Rank City Country Score Assets Infrastructure Markets 1 Boston United States 29 9 10 10 2 Paris France 29 10 9 10 3 Amsterdam Netherlands 28 9 9 10 4 Vienna Austria 28 10 10 8 5 New York United States 28 9 9 10 18 Hong Kong Hong Kong 25 7 9 9 19 Melbourne Australia 25 9 9 7 20 Tokyo Japan 25 8 8 9 27 Seoul Korea 24 7 9 8 28 Sydney Australia 24 8 8 8 116Source: 2thinknow Innovation Cities™ Program: www.innovation-cities.com
  117. 117. The Eurozone crisis - 3 Scenarios• Baseline – the situation in 2011 so far…• The initial issue of the European Financial Stability Facility (EFSF) was well received and the emergency meeting of Eurozone heads of government grudgingly agreed to increase the size of the EFSF/ESM both as measures to reassure investors• After what amounted to the failure of its debt auction in early April, Portugal realised that the future costs were unsustainable.• The new European Banking Authority has started the 2011 round of bank stress tests, but stated that banks do not need to make provisions against Eurozone government bonds held in their ‗banking book‘.• will investors be able to add back their own assumptions of losses and test the capital strength of the banking system?• Will this reveal the fatal flaw in the process?• Eurozone governments have committed to preparing contingency plans for the results of the formal tests, but they are unsure whether these will convince investors of sovereign and bank solvency.• There is also the problem of banks that face a failure of a major counter-party in the inter-bank or derivatives market. http://www.europesworld.org/NewFrancais/Accueil/Article/tabid/190/ArticleType/articleview/ArticleID/21831/language/en-US/Default.aspx 117
  118. 118. Scenario 1 – Inflationary Debt Spiral • Finance ministers gut the Commission‘s already weak economic governance proposals, and so make it clear to investors that collectively the Eurozones governments are unwilling or unable to enforce serious fiscal discipline. This weakness may become all too apparent from the probable stand-off with the European Parliament and the ECB. • Capital flees the Eurozone and short and long-term interest rates rise significantly in an attempt to prevent the import of rising inflation as the euro weakens. Extra interest costs add extra strain onto budget deficits and locks in the debt spiral.http://www.europesworld.org/NewFrancais/Accueil/Article/tabid/190/ArticleType/articleview/ArticleID/21831/language/en-US/Default.aspx 118
  119. 119. Scenario 2 - Default• Finance ministers and the European Parliament agree tough governance package• But at an risk state rejects the harsh measures called for and baulks investors leading to default . Steadier states fear a domino effect in other weakened states• Potential losses are vast as demonstrated by the stress tests and we see a spate of bank nationalisations.• Some Eurozone members leave the EU and revert to their past currencies, based on large and overly competitive devaluations• Fury in other Eurozone states quickly leads to the breakdown of the political and economic union.• The EU ceases to operate as an organised political system http://www.europesworld.org/NewFrancais/Accueil/Article/tabid/190/ArticleType/articleview/ArticleID/21831/language/en-US/Default.aspx 119
  120. 120. Scenario 3 – Federal Eurozone Emerges• A strong, federal ‗Eurozone‘ emerges.• Eurozone members conclude that it is in their best interest to avoid a collapse of the euro and decide that anything and everything must be done to save it• They agree an economic governance package that goes well beyond the Commission proposals and helps steady the bond markets.• Tougher regulation ensures that the banking system will not become over-exposed again.• Members agree a vastly engorged EU rescue fund• At risk states will be encouraged to take assistance at an early stage rather than when disaster is at door• Collective guarantees ensure recovery in the bonds market• Europe becomes a little insular in this period, focusing on getting its house in order, enlargement is put on hold and relations with non-Eurozone members are cooled.• After a couple of years members finances have improved sharply and the Euro strengthens, reducing the risk of importing inflation and improved regulations reduce the risk of a repeat o f the crisis 120 http://www.europesworld.org/NewFrancais/Accueil/Article/tabid/190/ArticleType/articleview/ArticleID/21831/language/en-US/Default.aspx
  121. 121. Population Change 2010-2030Source: Standard Chartered, reprinted in Business Insider, January 2011 http://www.businessinsider.com/standard-chartered-supercycle- 1212030-2011-1#
  122. 122. House Price Forecasts • Property values in the UK are set to fall 4.5% this year and 10.5% by the end of 2015, in real terms, according to the National institute of Economic and Social Research (NIESR). • The five-year slump in real terms - after inflation has been taken into account - is the longest period of decline since records began in the 1960s. • It would see house prices consistently fail to beat inflation over the period. • The prospects for the housing market are very weak indeed over the next five years and that will weaken economic growth very significantly, said NIESR economist Ray Barrell. It will be the longest period of falling house prices that we have seen, he added. • There was better news in the mortgage market with loans for house purchases up from 46,708 in February to 47,557 in March, according to figures from the Bank of England.Source: This is Money, May 2011 http://www.thisismoney.co.uk/money/mortgageshome/article-1722171/House-prices-to-fall-for-the-next-5- 122years.html
  123. 123. House Price Forecasts • NIESR predicts real house prices - values after inflation has been taken into account - will fall 4.5% this year and an average of 1.5% a year for the subsequent four years. It follows a 3% rise last year when prices were boosted by the Bank of Englands £200bn money-printing programme. • Paul Diggle, property economist at research group Capital Economics, said NIESRs gloomy house price forecasts were still too optimistic. • He added: The housing market is not going anywhere at all at the moment. Prices are flat but we think the housing market has considerably further to fall. Prices are over-valued, perhaps to the tune of 20%. • Robert Gardner, chief economist at Nationwide, said: A strong rebound in the market remains unlikely as the recovery is still expected to remain modest by historic standards. In our view, the most likely outcome is that house prices will continue to move sideways or drift modestly lower through 2011.Source: This is Money, May 2011 http://www.thisismoney.co.uk/money/mortgageshome/article-1722171/House-prices-to-fall-for-the-next-5- 123years.html
  124. 124. New Construction• Official figures revealed the sharpest fall in new orders for the construction industry since 1980.• The Office for National Statistics found that new orders were 16.3% lower in the second quarter on the previous three months and 23.2% lower than in the same period last year.• Analysts said they had been expecting the figures to show a slowdown across the construction sector – but were shocked by the sheer scale of the slump.• Cuts to government school building along with other infrastructure projects were partly to blame, according to experts, though private sector housebuilding remains muted and the building of retail outlets and shopping centres has almost ground to a halt. Source: Guardian, September 2011 http://www.guardian.co.uk/business/2011/sep/02/uk-construction-new- 124 orders-fall
  125. 125. New Construction• Areas in the south and west were hardest hit – with north London, Bristol and the Medway in Kent suffering some of the largest falls. The north-east also suffered heavily – with new orders in Tyne and Wear dropping by almost half on the previous quarter.• A survey of construction industry purchasing managers found a similar picture, with employment down for the third month in a row. The survey showed the sector was continuing to expand, albeit slowly, but with lower margins and confidence at its lowest for eight months. 125 Source: Guardian, September 2011 http://www.guardian.co.uk/business/2011/sep/02/uk-construction-new-orders-fall
  126. 126. UK Investment Trends • UK real estate investors stayed cautiously positive in the second quarter of 2011 as UK prime property continued to capture interest, according to the July Jones Lang LaSalle UK Investor Confidence survey. This is despite Q2 2011 UK investment volumes falling 24% over the quarter, following a stellar Q1 2011 performance that was boosted by the £1.6-billion Trafford Centre transaction in Manchester. • Investors do not expect the current tight supply market conditions to change, with 43% of respondents anticipating an excess of buyers over the next 12 months, up from 42% in Q1 2011 and 34% in Q2 2010. However, investors appear to be more willing to look outside London as only 56% expect their new activity to be in London and the South East compared with 69% a year ago. 126Source: Europe RE, July 2011 http://www.europe-re.com/system/main.php?pageid=2616&articleid=18553
  127. 127. UK Investment Trends • Robert Stassen, Head of EMEA Capital Markets Research at Jones Lang LaSalle, noted: ―Whilst there has been a widening disconnect between investment activity in Central London and the rest of the UK over the first half of 2011, key city center and town center locations are beginning to enjoy a surge in interest from domestic investors, particularly for retail assets. • ―However, this is yet to be translated in to transactions as regional investment volumes are still relatively low.‖ There was no material change in planned activity for the next 12 months with 73% of respondents expecting to be net buyers, up marginally from the 70% recorded in Q1 2011. 127Source: Europe RE, July 2011 http://www.europe-re.com/system/main.php?pageid=2616&articleid=18553
  128. 128. UK Investment Trends • Continued growth is expected in the second half of 2011, but investors might be moving down the risk curve with an increased percentage opting for less risky (core or core+) strategies (48% vs. 42% in Q1 2011), while the percentage opting for higher risk value added strategies dropped to 36% from 42% in Q1 2011, while highest risk opportunistic strategies remained at 16%. • Stassen concluded: ―These results underline that, despite the constraints on suitable prime investment grade product, investors still appear reluctant to explore opportunities within the secondary market, but might be considering better quality assets outside the London market‖. 128Source: Europe RE, July 2011 http://www.europe-re.com/system/main.php?pageid=2616&articleid=18553
  129. 129. Return Forecast • The All Property total return forecast for this year is 8%, down from Collier‘s quarter two forecast of 8.4% due to the rise in negative sentiment and the increased likelihood of a near term ‗double dip‘ recession in Europe and the United States. • Currently, interest in prime real estate assets remains strong across commercial segments, it says. Sub 3% retail transaction yields have been recorded in London on Old Bond Street (Cartier) and in Knightsbridge (Rolex). Despite falling bond yields, Central London pricing may be finding a base. • Central London office demand for new space has been steady with further rental growth expected due to supply constraints. Some 13 requirements, active and potential, of over 100,000 square feet are focused on the City. Demand for medium sized units of 10,000 to 40,000 square feet, has also been steady with supply also limited. 129Source: Property Wire, September 2011 http://www.propertywire.com/news/europe/uk-commercial-property-market-201109065529.html
  130. 130. Return Forecast• ‗The strongest returns are expected in 2013 as the economy begins to approach trend growth. From 2012 to 2016, we expect All Property to have an annualised 7.9% return led by the City of London offices and a rebound in shopping centres further along the horizon,‘ says Rahim Jiwani, Property Economist at Colliers International.• ‗All Property equivalent and initial yields have fallen slightly in the year to date and may see further marginal compression by year end as rental growth trends begin to strengthen. Rental growth for All Property over the 12 months ending in July nudged positive for the first time since October 2008, according to the July IPD Monthly Digest. Rental growth for 2011 is forecast to be 0.1%, but will strengthen over the next couple of years at an annualised 2% from 2012 to 2016,‘ he added. 130 Source: Property Wire, September 2011 http://www.propertywire.com/news/europe/uk-commercial-property-market-
  131. 131. Geographic Variation 131
  132. 132. Geographic Variation • London has been well documented as experiencing a boom in buy to let, but there is some evidence to suggest that real estate investors are now looking further North where prices are cheaper. • Experienced investors are now looking elsewhere to capitalize on the current market and according to Platinum Portfolio Builder, the North on England is generating greater interest. • Nick Carlile, who is Founding Partner of Platinum Portfolio Builder and has worked in the property construction and investment industry in and around Yorkshire since the age of 16, believes that renewed faith in the market has sparked a surge of interest. • ‗Even though a 25% deposit is still required, this is more achievable on a £100,000 property in the North than on say, a £250,000 plus property in the South, where prices are still considerably higher,‘ said Carlile.Source: Property Community, August 2011 http://www.propertycommunity.com/property-in-the-uk/real-estate-investors-in-uk-looking- 132north.html
  133. 133. Geographic Variation • He believes that experienced investors are recognizing that stagnant house prices and high demand for rental properties from those who cannot afford to make a purchase, are making investments more accessible with greater security of a good return. • ‗The north, versus the south, offers much greater opportunity to buy more than one property, building a portfolio over a faster period of time. If managed correctly, it has the potential to return much higher returns than in the South where yields are often half what is achieved in the North,‘ he explained. • ‗Having made many such investments myself in Yorkshire, I believe investing in property here has many opportunities. Of course, there are thousands of micro markets in the UK and this is just one, but successful property investing is about understanding these micro markets,‘ he added. • He pointed out that regional towns and cities in Yorkshire benefit from high yields, robust rental income and strong prospects of future capital growth, offering ideal conditions for those with money behind them or a decent deposit.Source: Property Community, August 2011 http://www.propertycommunity.com/property-in-the-uk/real-estate-investors-in-uk-looking- 133north.html
  134. 134. Geographic Variation • ‗Capital growth is part of a medium to long-term investment, especially in the current market, so rental yield is crucial. Yorkshire offers a secure buy to let investment from a more affordable starting point. There is more scope to purchase properties with a significant discount; on average we achieve 26% below survey value for our clients with an average gross yield of 8.9%. Typical yields for London are said to be around the 4% mark due to much higher property prices,‘ he said. • Platinum Portfolio Builder has recently seen an 18% increase in the number of clients wanting to invest in the last quarter, in particular from investors based overseas. • ‗There seems to be a distinct improvement and renewed faith with investing in property and 2011/2012 is offering the prime time to do so. During 2010 the discount achieved equaled to over two million in equity for the benefit of our clients and shows the strength of such investments in the North of England,‘ he added.Source: Property Community, August 2011 http://www.propertycommunity.com/property-in-the-uk/real-estate-investors-in-uk-looking- 134north.html
  135. 135. Buy-to-Let• Investors in student properties have benefited from the imbalance between the supply of accommodation and the high demand for university places in the UK.• According to the Knight Frank Student Accommodation Index, total returns for student property across England and Wales were 13.5 per cent in the year to December 2010, and 8.41 per cent in London.• Average yields were 6.25 per cent a year.• However, property experts have warned of a growing divergence in the investment performance of student accommodation – with some university towns forecast to perform better than others, as a result of the government‘s reform of university funding in 2012.• Savills, the property agent, believes the changes will lead to a market where there are distinct winners and losers, making it essential that investors research locations more carefully than before. 135Source: FT, August 2011 http://www.ft.com/intl/cms/s/2/c45d8874-ce4e-11e0-99ec-00144feabdc0.html?ftcamp=rss#axzz1XCQ2Wnwz
  136. 136. Buy-to-Let• Its research of 114 universities in England shows that there are a number of university towns that will continue to provide attractive returns, such as Exeter, Brighton, Manchester and London. These are still rated as ―buy‖ locations. But it has also identified ten universities towns where demand will weaken, due to a combination of funding reform and the inability to attract full-time and foreign students.• Rental demand can also be affected by the growing trend for more students to live at home and commute for economic reasons – a trend that is expected to accelerate with the raising of tuition fees.• Research from LV= found that the number of stay-at-home students is set to more than double by the year 2020, to reach 793,000 – which represents 47 per cent of all UK higher-education students. 136Source: FT, August 2011 http://www.ft.com/intl/cms/s/2/c45d8874-ce4e-11e0-99ec-00144feabdc0.html?ftcamp=rss#axzz1XCQ2Wnwz
  137. 137. Buy-to-Let 137Source: FT, August 2011 http://www.ft.com/intl/cms/s/2/c45d8874-ce4e-11e0-99ec-00144feabdc0.html?ftcamp=rss#axzz1XCQ2Wnwz
  138. 138. Commercial Rental Growth Forecasts 138 Source: GVA, Q3 2011
  139. 139. Investment Market Outlook 139Source: GVA, Q3 2011 www.gva.co.uk/WorkArea/DownloadAsset.aspx?id=12884909144
  140. 140. The UK Property Sector 140
  141. 141. House Price Could Rise 14% by 2015 • The Centre for Economics and Business Research says house prices will increase by 14% over the next four years. • It predicts house prices will drop 1.3% in 2011 but then gradually rise between 2012 and 2015, up 2.4% in 2012, 3.4% in 2013, 3.6% in 2014 and 4% in 2015. • The ongoing shortage of housing, a gradual increase in the availability of mortgage finance and a prolonged period of loose monetary policy will cause the upsurge in house prices, it says. • Cebr says house building will remain depressed for the next four years and this, combined with population growth, will result in an increasing shortage of accommodation. • It says this is likely to elevate house prices, making home ownership less affordable and placing further pressure on the rental market. • Cebr also predicts that the base rate is unlikely to rise above 2% before 2015.Source: Mortgage Strategy, August 2011 http://www.mortgagestrategy.co.uk/housing-market/house-prices-will-rise-14-by-2015-says- 141cebr/1036500.article
  142. 142. House Price Could Rise 14% by 2015 • Shehan Mohamed, economist at Cebr, says: ―We forecast an average of 110,000 new homes to be built every year over the medium term. • ―This is significantly lower than the 225,000 homes that need to be created every year to keep pace with current housing needs, population growth and the trend towards reduced household sizes.‖ • Douglas McWilliams, chief executive of Cebr, says: ―We do not expect a house price boom, but the housing shortage is likely to push prices gently upwards. • ―Because we have revised down our forecast for economic growth from 2012 to 2015, we have also cut our forecast growth in house prices to 2015 from 15.8% to 14.0%. • ―By 2015, our updated forecast price for the average house is £200,700. The previous peak level was £191,200 in 2007.‖Source: Mortgage Strategy, August 2011 http://www.mortgagestrategy.co.uk/housing-market/house-prices-will-rise-14-by-2015-says- 142cebr/1036500.article
  143. 143. UK Housing Forecasts 143
  144. 144. UK Housing Forecasts • UK Ministers themselves expect to deliver and exceed the stated target of 150,000 new homes by 2015. • Appetite for the Affordable Homes Programme has surpassed expectations, with 146 providers sharing almost £1.8 billion to build 80,000 homes under the programme - putting the Government on track to deliver up to 170,000 new homes by 2015, and safeguarding some 80,000 jobs in construction and related trades. • The programme allows social housing providers to charge a rent of up to 80 per cent of the local market level, and use the additional income to support delivery of more affordable homes. Providers may also offer flexible tenancies to new tenants.Source: Property Talk Live, 18/07/2011, http://propertytalklive.co.uk/social-housing/6999-new-affordable-homes-programme-set-to-exceed- 144expectations
  145. 145. UK Housing Forecasts • The National Housing Federation has predicted home ownership in England to slump to just 63.8 percent over the next decade, the lowest level since the mid-1980s. • The Federation argues that huge deposits, combined with high house prices and strict lending criteria, have sent home ownership into decline. • In England, the proportion of people living in owner occupied homes could fall from a peak of 72.5 per cent in 2001 to 63.8 per cent in 2021, the Federation forecast. • In London, the majority of people living in the capital will rent by 2021 with the number of owner occupiers falling from 51.6 per cent in 2010 to 44 per cent by 2021, it added. • The North East will be the only English region to see any increase in owner occupier numbers over the next decade, rising marginally from 66.2 per cent to 67.4 per cent, the Federation predicted. 145Source: This is Money, 30/08/2011, http://www.thisismoney.co.uk/money/mortgageshome/article-2031434/Housing-market-crisis-home-ownership-tumbles-house-prices-soar.html
  146. 146. UK Housing Forecasts • The average house price in England will meanwhile rise by 21.3 percent over the next five years from £214,647 in 2011 to £260,304 in 2016, according to Oxford Economics, who were commissioned to produce the forecasts. • Average rents in the private sector are forecast to increase sharply by 19.8 per cent over the next five years fuelled by high demand and a shortage of properties. • Oxford Economics predicted that means rents would increase on average in England from £486 a month in 2011 to £582 a month in 2016, meaning tenants would be paying £1,152 more a year in total. 146Source: This is Money, 30/08/2011, http://www.thisismoney.co.uk/money/mortgageshome/article-2031434/Housing-market-crisis-home-ownership-tumbles-house-prices-soar.html
  147. 147. Green Skills Deficit• John Alker of the UK Green Building Council says that the green skills deficit is the major challenge facing the construction industry, but suggested that once professionals have knowledge of sustainability, they can integrate it into all of their work.• From the end of 2012 the Green Deal will be launched, providing up to 200,000 jobs, but requiring good skills in retrofitting homes to a high standard of energy efficiency. 147 Source: SAP Designs, April 2011 http://www.sapdesigns.co.uk/article36.html
  148. 148. UK 3rd in Green Building league• Norway has topped a global league of green building for the second year in a row, followed by Brazil in second place and then the UK, which climbs to third place for the first time.• The 2009 Royal Institute of Chartered Surveyors (RICS) Global Zero Carbon Capacity Index is based on International Energy Agency(IEA) data and covers 34 countries looking at factors such as energy efficiency in households, offices and transport, as well as investment in renewable energy and policies to reduce carbon consumption from buildings.• The building sector – both residential and commercial – currently accounts for around 40% of emissions, more than either the transport or industrial sectors.• The UK has climbed a place in the league since last year, mainly as a result of the new policies introduced by the previous government, including zero- carbon housing, the Code for Sustainable Homes and tightened building regulations. 148 Source: UCL, July 2010 http://www.ucl.ac.uk/news/news-articles/1007/10071901
  149. 149. Background Note Climate Change • According to a 2011 report released by consultancy group Mercer, along with the World Banks International Finance Corporation, climate change will significantly impact the transportation, construction, and manufacturing industries over the course of the next 20 years. • In fact, the report states that damages caused by climate change could cost over $8 trillion globally by 2030. 149 Source: AutoBlog, March 2011 http://green.autoblog.com/2011/03/03/why-green-cars-matter-climate-change-could-cost-8-trillion-by/
  150. 150. Ecosystem Services and Biodiversity Loss 150
  151. 151. Background Note Imperatives • ‗The UK‘s embedded and unconscious dependence on environmental resources, largely unaccounted for and unvalued in market terms, will mean no sector or business will escape unaffected by changes to the availability of environmental goods and services,‘ says PwC. • Business blind spots on future consumer behaviour, reporting, valuation and regulation are already emerging. Unpredictable pricing and supply chain scenarios made business action on environmental conservation ―the economically rational thing to do.‖ • Water used in food and drink production, timber for packaging, furniture and paper, productive land for fruit and vegetables, and fibres for clothes, are amongst just some of the biodiversity and ecosystem ‗services‘ whose economic value and protection is examined in the study. 151 Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as- unchecked-environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
  152. 152. Background Note Imperatives • Despite the potential impact, research by PwC for the TEEB study, found that of the world‘s largest 100 companies - including many UK household names - only two see biodiversity loss as a strategic business risk. Only 18 companies made any mention of biodiversity or ecosystems in their annual report. In high – dependency or impact sectors including food producers and primary industrial sectors, nine identified it as a key sustainability issue. • Regional differences in business perceptions of the threat are also stark. Over 50% of CEOs in Latin America and 45% in Africa see declines in biodiversity as a challenge to business growth. In contrast, less than 20% of their counterparts in Western Europe share such concerns, dropping to 15% in the UK. • Malcolm Preston, CEO, sustainability and climate change, PricewaterhouseCoopers LLP said: • ―Current business strategies and plans in the UK are biting the hand that feeds stable consumer prices, business prospects and long term investor security and returns. 152Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as-unchecked-environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
  153. 153. Background Note Imperatives • ―When estimates in the study put economic impact of biodiversity loss at between $2-4.5 trillion annually, you realise that this is not just about environmentalists and scientists, but economically rational conservation that protects the long term prospects for business. • ―That means putting more value on the resources that supply and sustain UK business, including companies and projects the financial services sector is investing in.‖ • Focusing in on issues for UK companies ranging from SME suppliers to large corporate, to international financial services companies and pension investors, contributors from PwC to the UN study highlighted five potential blind spots for UK business to focus on: – Possible changes in corporate reporting to recognise resources that are material to the business‘s future, that will require auditing and assurance 153 Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as- unchecked-environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
  154. 154. Background Note Imperatives – Unpredictability in supply chain pricing and availability, with knock on affects for consumers of price rises and product availability – Consumers disregarding products that do not take ethical and environmental considerations into account – Investors expecting more data, and factoring in more value for resources that supply and sustain businesses and funds they are investing in – New environmental regulations, tax and subsidy reforms as new analysis gives governments better valuation and pricing measures for biodiversity; the introduction of new markets such as UK based habitat banking or other environmental market mechanisms. 154 Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as- unchecked-environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
  155. 155. Background Note Imperatives • Jon Williams, partner, sustainability & climate change, PricewaterhouseCoopers LLP said: • ―We‘re effectively in an environmental recession for which few businesses appear to have a real accounts or a recovery plan. Identifying and managing the risks that arise from our impact on biodiversity in the UK is not about greenwash, or CSR, it‘s about the economics and security of supply and demand, and in a shorter time frame than climate change.‖ 155 Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as- unchecked-environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
  156. 156. Background Note Global Challengers • In a January 2011 report, The Boston Consulting Group (BCG) identifies 100 so-called emerging global challengers, about half of which could qualify for inclusion in the Fortune Global 500 within the next five years. • The 100 challenger companies grew annually by 18 percent and averaged operating margins of 18 percent from 2000 through 2009. • Overall, the global challengers generated revenues of $1.3 trillion in 2009. BCG notes that if these new challengers ‗…continue on their current growth path, they could collectively generate $8 trillion in revenues by 2020—an amount roughly equivalent to what the S&P 500 companies generate today.‘ Source: Boston Consulting Group, January 2011 156 http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-70018
  157. 157. Background Note Talent • Having access to the best talent continues to be a challenge for CEOs and business leaders—with 97 percent of CEOs in PwC‘s annual global CEO survey saying that having the right talent is the most critical factor for their business growth (1). • In its annual May release of 2010, Manpower noted that 9 percent of UK employers are having trouble filling vacancies (2), despite an 8 percent unemployment rate in the three months to January 2011 (3). Source (1): PwC, ‗Talent Mobility 2020,‘ 2010 http://www.pwc.com/gx/en/managing-tomorrows-people/future-of-work/pdf/talent-mobility- 2020.pdf Source (2): Manpower, May 2010 http://www.manpower.com/investors/releasedetail.cfm?ReleaseID=471751 Source (3): Office for National Statistics, March 2011 157 http://www.statistics.gov.uk/cci/nugget.asp?id=12
  158. 158. Background Note Skills Shortages • Half of employers (51%) are concerned they will not be able to fill posts requiring the right graduate level or higher skills in the coming years, and a third (32%) dont believe it will be possible to fill intermediate level jobs, requiring skills equivalent to A level. A third (30%) of employers predict the need for lower-level skills will decrease, while just 17% say it will increase. • The survey formed the CBI report, Ready to grow: business priorities for education and skills. • Asked how satisfied they were with school and college leavers employability skills, two-thirds (68%) of employers were dissatisfied with levels of business and customer awareness, over half (57%) were unhappy with self-management skills, and over two-fifths (44%) with young recruits ability to solve problems. Source: HR Magazine, May 2010 158 http://www.hrmagazine.co.uk/hro/news/1017856/employers-struggle-recruit-skilled-staff-post-recession-war-talent-rages
  159. 159. Background Note Skills Shortages • Despite the recession, nearly half of employers (45%) say they are already having difficulty recruiting staff with skills in science, technology, engineering and maths (STEM), with manufacturers and science-related businesses having the most difficulty finding highly-skilled people to fill their posts. Even more companies (59%) expect to have difficulty finding STEM-skilled people in the next 3 years. • Employers are concerned about the basic skills of their current workforce. The biggest problem is with IT skills, where two-thirds (66%) of employers report concern. But half of employers are also troubled by employees basic literacy (52%) and numeracy (49%) skills. • In the past year alone, a fifth of employers have arranged remedial training for young people they have recruited from school or college, in literacy (18%), numeracy (18%), and IT (22%). When it comes to the existing workforce, employers are also providing basic training in literacy (22%) and numeracy (18%), with the need for IT training even higher (43%). Source: HR Magazine, May 2010 159 http://www.hrmagazine.co.uk/hro/news/1017856/employers-struggle-recruit-skilled-staff-post-recession-war-talent-rages
  160. 160. Change on the Horizon? 160
  161. 161. Change on the Horizon?• A March 2011 report on housing demand up to 2025 by the Institute of Public Policy Research, predicts the average demand for new homes in England will total 252,017 per year, and demand for social housing will rise in most regions, whether the economy recovers or continues to struggle.• It claims demand for all housing tenures will rise by between 20 to 25 per cent, or more than 30,000 each year, in the east of England, with the north west seeing the lowest increase of between 9 and 15 per cent. Source: Inside Housing, March 2011 161 http://www.insidehousing.co.uk/news/development/east-of-england-to-top-demand-for-housing-in-next-20-years/6514016.article
  162. 162. Change on the Horizon? • 2011 will see major changes to the framework within which housing operates. • The changes range from planning and affordable housing to funding and mortgage finance. • 2011 will be a year of adaptation and innovation for the UK housing industry but participants will step up to the plate.Source: King Sturge, 2011http://www.kingsturge.co.uk/news/~/media/Events/Property%20Predictions/2011/KING%20STURGE%20PROPERTY%20 162PREDICITONS%202011%20FULL%20PAPERS%20FINAL.ashx
  163. 163. Innovation In The Property Sector 163
  164. 164. Ultra-Quick Construction • The most recent example of the striking capability of the Chinese building industry took place in Changsha, Hunan province a few months ago. • Chinas Broad Group showcased their rapid building technology by constructing the 15-story Ark Hotel in less than six days. Using a team of 200 workers the structural framework was erected in just 46.5 hours and the external cladding and internal non-structural surfaces were completed in another 90 hours. • The Ark Hotel used one sixth the material of an equivalent sized building with a cost saving of 20% while still being able to withstand a 9.0 magnitude earthquake. 164Source: Gizmag, 10/08/2011, http://www.gizmag.com/15-story-hotel-built-in-less-than-6-days/17711/
  165. 165. Ultra-Quick Construction • In addition the building uses several technologies to result in energy efficiency five times that of comparable buildings. This includes triple pane windows, external solar shades, 6 inches of thermal insulation, heat recovery ventilation, and LED lighting systems. The plan is to construct 15 similar structures in China and 30 more in other countries. • However, the foundations and other below-ground construction were completed prior to starting the clock and the construction system makes significant use of prefabricated components produced in a dedicated factory. 165Source: Gizmag, 10/08/2011, http://www.gizmag.com/15-story-hotel-built-in-less-than-6-days/17711/
  166. 166. Floating Houses? • The FLOATEC project research project is developing "amphibian houses― that are designed to float in the event of a flood. • This technology would be of immense benefit to low-lying countries such as the Netherlands and small island-states in the Indian and Pacific Oceans, that are at the risk of disappearing in the next 100 years due to rising sea levels. Thus these states could maintain their claim to statehood through the use of artificial, floating structures. • The lead research partner in the FLOATEC project is Dura Vermeer, a Dutch company that over the past 12 years has become a market leader in the floating building market. • FLOATEC is a European R&D project underwritten by EUREKA, an intergovernmental network established to support market-oriented R&D and innovation projects by industry, research centres and universities across all technological sectors. 166Source: Gizmag, 01/09/2011, http://www.gizmag.com/floatec-floating-house-project/19670/
  167. 167. Floating Houses? • The key to floating structures lies in their foundations, which are made up of multiple layers of light plastic foam supporting the concrete. However, the technology used up until now has had limitations as there is a maximum size and weight beyond which a structure loses its buoyancy and simply sinks. • To solve this problem Dura Vermeer teamed up with Spanish company, Acciona Infrastructures, and a Spanish engineering consultancy, Solintel, to develop a new way to build floating structures that were simpler, more solid and used lighter materials. • The new building method they developed uses expanded polystyrene (EPS), which Blon says is, "the same kind as is used for packaging and which people are familiar with: little white balls glued together." 167Source: Gizmag, 01/09/2011, http://www.gizmag.com/floatec-floating-house-project/19670
  168. 168. Floating Houses? • This modified polystyrene is inserted in multiple layers in between stratums of composite and concrete and divided into beam-like modules that can easily be assembled into a bigger supporting structure a bit like building blocks. The modules are arranged in a floating grid into which the concrete is cast. • Blom says that the new technology is much cheaper than traditional methods as there is a reduction in the amount of material used. "Smaller blocks can now support bigger structures and, in the end, the cost of the whole building is reduced," he said. 168Source: Gizmag, 01/09/2011, http://www.gizmag.com/floatec-floating-house-project/19670
  169. 169. Wooden Cities?• 3 billion will need new affordable housing in next 20 years.• 100,000,000 effectively homeless worldwide. Means 100,000 new houses per day.• Modular, containers, rammed earth, are great ideas but… these are rural or suburban solutions, but we need solutions for the 50% who live in urban areas(70% by 2050, mostly in developing world).• 3 tonnes of concrete are produced per person per year globally• Needs: 1) Reduce carbon emission & 2) Remove carbon from system• Wood is lighter and has a much smaller carbon footprint, indeed it can even store carbon.• New technology which involves heating and pressing pulp into large sheets could create a product that is stronger then steel. Source: TED, accessed info via scienceforums.net, March 2011 169 http://www.scienceforums.net/topic/55923-wood-the-best-material-for-skyscrapers/
  170. 170. Wooden Cities?• Apart from the foundations, wood can replace the use of steel and concrete in buildings and becomes the new structural backbone of the skyscraper!• Wood weights half as much as concrete which improves the strength of the building in an earthquake• Wood buildings have survived earthquakes better than heavy steel and concrete buildings• Can lead to an enormous reforesting business worldwide, and an enormous sequestration of Co2.• As a material the wood is more expensive but …• It so drastically reduces the labour costs associated with buildings as it can go up so much faster. It takes a week to pour a concrete floor in a skyscraper before the next floor can be constructed. Wood skyscrapers can build 6 floors a day. Source: TED, accessed info via scienceforums.net, March 2011 170 http://www.scienceforums.net/topic/55923-wood-the-best-material-for-skyscrapers/
  171. 171. Green Buildings 171
  172. 172. Installed PV as a Trend 172
  173. 173. Installed PV as a Trend • Installations of PV systems in United Kingdom amounted to 96 Megawatts (MW) in 2010, up an astounding 1,500 percent from 6MW in 2009. Starting from a nearly negligible level in 2009, the expansion dramatically outpace the growth of the next fastest-growing nation – Spain – which rose by approximately 730 percent in 2010. • The United Kingdom in 2010 adopted attractive Feed-in-Tariffs (FIT) to promote PV adoption. • While growth in the United Kingdom is expected to slow down from such a blistering rate after 2010, PV installations will continue to rise in the 50 Percent range for each year through 2014. 173Source: Design Spark, 01/02/2011, http://www.designspark.com/content/fastest-growing-solar-market-2010
  174. 174. Green Buildings • Researchers at the Ningpo, China campus of the University of Nottingham (UNNC) have created a new heat-regulating material that could be used to cut the heating and cooling costs of buildings. • The non-deformed storage phase change material (PCM) can be fixed so that it starts absorbing any excess heat above a pre-determined temperature and releasing stored heat when the ambient temperature drops below the set point. 174Source: Building4Change, 11/08/2011, http://www.building4change.com/page.jsp?id=905
  175. 175. Green Buildings • The researchers say the material can be manufactured in a variety of shapes and sizes, even small enough so that it can be sprayed as a microscopic film to surfaces in existing buildings. • The researchers at UNNCs Centre for Sustainable Energy Technologies say the novel material possesses a larger energy storage capacity with faster thermal response than existing materials and could be cheaply manufactured. • They believe it has the potential to save up to 35 percent of energy in a building and could also be used to enhance the efficiency of solar panels and LED lighting. 175Source: Building4Change, 11/08/2011, http://www.building4change.com/page.jsp?id=905
  176. 176. Innovative Recycling • Mexicos Tubohotel, which opened in 2010, is a unique and affordable holiday destination created from recycled concrete tubes. • The original pipe hotel concept comes from German architect, Andreas Strauss, who created Dasparkhotel in 2006. The T3arc architects drew inspiration from Strauss and expanded on the idea to create two-story triangular modules. • By stacking one tube on top of two base tubes, they were able to create a striking visual display without impacting the surrounding natural environment. • The Tubohotel offers 20 concrete rooms, each measuring 2.44 m wide and 3.5 m long (8 ft x 11.5 ft) and is simply furnished with a queen size bed, desk light, fan, and under-bed storage. • Unfortunately they couldnt come up with an idea to squeeze in a bathroom but guests have access to two communal bathhouses located on the hotel property. 176Source: Gizmag, 10/08/2011, http://www.gizmag.com/mexicos-recycled-concrete-tube-hotel/19142/
  177. 177. Innovative Recycling • Because they are sturdy, waterproof, transportable, and perhaps only a little bit smaller than some low-rent apartments, disused shipping containers have become very popular for conversion into low-impact buildings. • Past efforts have included using them as emergency housing, trendy relocatable bachelor pads, pop-up shops and portable restaurants. 177Source: Gizmag, 29/06/2011, http://www.gizmag.com/building-made-from-65-shipping-containers/19069/

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