...When the consensus expects one thing to happen, quite often the exact opposite ends up occurring.
...Karen Harris is the Managing Director of Bain & Company's Macro Trends Group. Karen and her team at Macro Trends...
...her pioneering work on the declining cost of distance...this is one of the most critical concepts to grasp going forward...
...How would the world change if the cost of distance fell dramatically and greatly reduced the importance of location?
Technology is enabling a post-urban world
...“The catalyst for this historic shift [are] new technologies that have pushed the cost of distance to the tipping point. Robotics, 3-D printing, delivery drones, logistics technology and autonomous vehicles....
...Data from The World Bank ....the cost of transporting goods by air and ocean freight has dropped substantially over the past 40 years. Going forward, autonomous vehicles and delivery drones are expected to reduce the cost of transporting goods by a further 75%, according to Macro Trends.
...what would happen to urban economies and real estate prices if millions of people decided to leave?
...As the cost of distance declines, companies will be able to deliver economic output at smaller scale.
Today, a 6,000–8,000 square-foot Apple store requires a population of roughly two million people...with service robotics, an Apple store will potentially be able to thrive in a population center with 200,000 inhabitants instead of 2 million.”...
Automation is also changing the business model of casual dining outlets like McDonalds and Burger King. ... to reduce their break-even costs by 30%,...
On the surface, automation is bad for jobs. For example, Macro Trends estimate that by employing service robots, casual dining outlets could reduce staff from 25 to 8 people. However, as automation will enable businesses to operate at a smaller scale and scope, it may create jobs net-net.
low-cost, rural living with a city wage
As more businesses open locations in less dense, rural areas, these areas will become more attractive places to live....the absence of an office greatly reduces overhead costs. Best of all, each one of us gets to work from wherever we please....
Karen and the Macro Trends...“The declining cost of distance has the potential to trigger a major lifestyle shift away from city centers, ...we would expect the move out of US urban centers between 2010 and 2025 to rise to about 6% of the population per decade, or up to 24 million people in total by 2025.
... urban real-estate prices, which are notoriously high across the globe, could plummet as demand falls.
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