Living in an age of grey boxes

What does modern architecture tell us about our suburbs and society in today’s Australia?

If an era’s architecture tells us about the times, what do today’s houses tell us about modern society and values?

On Sydney’s North Shore lies a collection of old army bases, from the 1980s onwards the military started moving out and some of the land was handed over as national parks, other parts were converted into office parks or cafes while the disused married quarters were sold off to private home builders.

The old stores and administrative buildings have been adapted into artists’ studios and elegant, if expensive, offices. Overall, that’s been a success which has created quite a thriving businesses and creative community.

old army store converted into an art gallery
old army store converted into an art gallery

Many of the colonial officers’ and NCO’s quarters, impressive sandstone and wood structures, have become offices, restaurants or function centres. Although some are still looking for a purpose.

Old Colonial Military residence
Old Colonial Military residence

What happened to the functional three bedroom 1960s and 70s brick veneer homes that housed a generation of army brats is less encouraging and tells us much about the times in which we live.

A few of the old post World War II homes remain for Navy families in the still operating, and expanding, HMAS Penguin and these show us the houses that once lined Middle Head Road in Mosman.

old-mosman-military-family-home
1960s Mosman military home
old-mosman-militrary-family-home-2
Another old Mosman military family home

These are perfect examples of the functional family homes that covered Australian suburbia during the 1960s and 70s. While nothing exciting or particularly pretty, they were adequate for their task as baby boomers built their families in the post war prosperity.

When they were sold by the Federal government most those modest family homes on Middle Head were bulldozed to make way for the grey behemoths of the 21st Century.

new-grey-mosman-mansion
New grey mosman mansion

Like the Mc Mansions that crowd today’s suburbia, these feature four, five or even six bedrooms with on-suites, multicar garages and games rooms. Just as every child today has to win a prize, every room has to have a plasma TV.

These monuments to the modern consumerist economy triumphantly march along a road that once featured modest homes with gardens, trees and lawns.

Line of grey mosman mansions
Line of grey mosman mansions

In many ways these modern buildings represent the ethos of our time – grey, non-descript, poorly built, overcapitalised and dependent on cheap, never ending debt.

A striking aspect about them is their hostility to the pleasant surroundings and the 1930s mansions that make up most of the street. With their battleship grey, security features and blocky air raid shelter lines they look much more like some sinister military installations than the red brick army homes they replaced.

What’s also notable about these new buildings is many are empty. Some of them are being refurbished, only a few years after being built, and many are undergoing substantial repairs – a testament to  how Australian building standards have declined in the past two decades.

Strolling along Mosman’s Middle Head Road its hard not to imagine that if Dorothea Mackellar were writing her iconic My Country poem today, she would have included the lines;

I love a sunburnt country
a land of capital gains

The tragedy for Australia is those old three bedroom houses could have been used by a visionary government to help low income families in Sydney’s increasingly unaffordable suburbs.

However we don’t live in visionary times and government assets today exist to be sold off as quickly as possible to Australia’s rapidly growing rentier classes.

There was little chance those modest housing blocks would become anything more than expensive, over capitalised gin palaces for bankers and the city’s well connected business elite who are never slow to see a coal mine or old military property going cheap.

Architecture tells us a lot about our times and the abandoned Middle Harbour army base is a good commentary on the phases of Australian development through the twentieth Century and the beginning of this century.

The houses also tell how Australians see speculating on overcapitalised property as a safer investment than building the technologies and businesses necessary to prosper in this century. How that will turn out remains to be seen.

What will be interesting is how our great-grandchildren see us and our legacy when they look upon the grey, hostile buildings we built to celebrate our good fortune in the early 21st Century.

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Cutting the middle management fat

Cutting middle management is an imperative for business as markets change quickly.

No-one can say life is comfortable at Cisco when every two years the company engages on a round of job cutting that tends to keep employees on their toes.

While this year’s job cuts are relatively mild – only 4,000 as opposed to nearly 13,000 in 2011 – it’s notable the focus on culling middle management positions.

“We just have too much in the middle of the organization,”  the Wall Street Journal reports Cisco CEO John Chambers as saying.

One of the challenges for businesses is become more flexible when markets are rapidly changing. Having ranks of middle managers makes it harder for organisations to respond.

John Chambers and Cisco are reducing their middle management head count to respond to that need. Many other companies are going to have to do the same.

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Can Russia build a Silicon Valley?

Can Russia build its own Silicon Valley in Skolkovo?

Like many other countries, Russia is trying to build its own equivalent of Silicon Valley at Skolkovo on Moscow’s outskirts as Tech Crunch reports.

Across the world governments are trying to find a way to replicate Silicon Valley – from London’s Tech City to Australia’s Digital Sydney, the hope is they can create the same environment that built California’s success.

In some respects, Russia should be well placed to create their own Silicon Valley having had the same massive Cold War technology investments as the United Stated. The old Soviet system also left a deep scientific and mathematics education legacy.

As the Tech Crunch article points out though, the Russian financial and legal systems are working against the nation with most local startups looking at incorporating in offshore havens like Luxembourg and Cyprus rather than taking their chances with the local tax laws and courts.

If finance was the sole criteria for succeeding then Skolkovo would be almost guaranteed success with twenty billion US Dollars of private and government fundiing behind the project.

Funding alone though isn’t enough, and most industrial hubs are the result of happy accidents of transport, natural resources and skills being found in one region.

It might take more than a load of cash for Russia to build their own Silicon Valley, but with a shrinking and aging population the nation needs to find a way to diversify away from simply being an energy exporter.

Image courtesy of Skolkovo Foundation through Flickr

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Downward trends and demographics mark the end of consumerism

The age of ever expanding consumer spending is over, we have to start thinking of different ways

One of the features of the late Twentieth Century economy was how consumer spending came to dominate the economy – as manufacturing moved offshore, mines closed down and agriculture became largely automated, many developed nations’ growth came from retail spending.

Today’s release of retail spending figures by the Australian Bureau of statistics shows how that economic model too has come to an end. A post on the Macrobusiness blog illustrates the steady, structural decline of retail spending in Australia.

ScreenHunter_10 Aug. 05 11.36

Since 2000, the rate of growth has been declining, only low interest rate policies over the last two years has kept retail sales at a steady level.

Those businesses whose business models are built on the assumption of high growth rates have a big problem – its no coincidence it’s the department and clothing stores are among the loudest complainers about taxes, labour costs and rents as they see their sales and profits shrinking.

Basically the Twentieth Century era of consumption has come to an end as households have maxed out their credit cards. Now that many of those households are now older, they simply don’t need to spend as much anyway.

With the demographic, economic and cultural changes now happening in society it’s a bad time to be planning on massive expansions in household spending and debt as we say in most western countries from the 1960s onward.

It’s time to think different, and be a lot smarter about getting consumers to buy your products. The era of the 72-month interest free deal is over.

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Is Australia falling behind on the internet of everything?

Australian businesses are falling behind the rest of the world in using the Internet of machines says Cisco

Last Friday Cisco Systems presented their Internet of Everything index in Sydney looking at how connected machines are changing business and society.

Cisco Australia CEO Ken Boal gave the company’s vision of how a connected society might work in the near future with alarm clocks synchronising with calendars, traffic lights adapting to weather and road conditions while the local coffee shop has your favourite brew waiting for as the barista knows exactly when you will arrive.

While that vision is somewhat spooky, Boal had some important points for business, primarily that in Cisco’s view there is $14 trillion dollars in value to be realised from utilising the internet of machines.

Much of that value is “being left on the table” in Boal’s words with nearly 50% of businesses not taking advantage of the new technologies.

Boal was particularly worried about Australian businesses with Cisco lumping the country into ‘beginner’ status in adopting internet of everything technologies along with Mexico and Russia, with all three lagging far behind Germany, Japan and France.

cisco-country-capabilities-internet-of-everything

In Boal’s view, Australian management’s failure is due to “the focus on streamlining costs has come at the cost of innovation.”

This something worth thinking about; in a business environment where most industries only have two dominant players and the corporate mindset is focused on maximising profits and staying a percentage point or two ahead of the other incumbent, being an innovator itsn’t a priority – it might even be a disadvantage.

For Australian business, and society, that complacency is a threat which leaves the nation exposed to the massive changes our world is undergoing.

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What happens when the power goes out?

How would you cope if the electricity was turned off?

Cisco gave a media and analyst briefing earlier today on the Internet of everything looking at how various technologies can help with tasks ranging from reducing traffic accidents to improving productivity which I’ll write up later.

One of the analyst’s questions though is worth pondering – “what happens when the power goes out?”

For most of the industrial processes discussed by Cisco and the panellists, this would be a hassle but most of the systems would, or should, be designed to fall back to a default position should the power fail.

On a much bigger scale though this is something we don’t really think through.

In modern Western societyour affluent lifestyle is based upon complex supply chains that get the food to our supermarkets, fuel to our petrol pumps, water to our taps and electricity to our homes.

Those chains are far more fragile than we think and few of us give any thought to how we’d survive if the power was off for more than a few hours or if the shop didn’t have any milk and bread for days.

It’s one of the fascinating thing with the end of the world movies. When the meteorite hits or aliens take over then our power and food supplies probably have only 72 hours before they dry up.

After that, you’ve probably got more to worry about your neighbours trying to steal your hoard than being ripped to pieces by zombies.

Most of us probably wouldn’t cope without the safe, comfortable certainties which we’ve become used to.

One thing is for sure — if the power does fail, then most of us will have more to worry about than whether our smartphones are working or whether our geolocating, internet connected fridge is tweeting our wine consumption.

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Gen Y and the need for building new businesses

As baby boomers struggle to maintain their living standards, the burden will fall on younger generations to build future businesses.

The retirement of the baby boomers has been an demographic inevitability, but it’s interesting how policy makers and the population in general have ignored the ramifications of this despite the first boomers now aged beyond 65.

One of the consequences of this is we may see an entire generation being forced to become self employed entrepreneurs.

Illustrating this point are two stories from the US over the last few days; John Mauldin’s dissection of where US jobs are going and Zero Hedge’s 35 facts that should scare American baby boomers.

The 35 facts really boil down to one thing, that an affluent, middle class retirement at 65 when average life expectancy is 78 is an illusion for most people – neither their bank accounts or the state treasury can support that sort of spending.

Which is the point of John Mauldin’s column, that over 50s are taking most of the available US jobs as they can’t afford to retire.

For those over 50 who’ve fallen out of the workforce due to unemployment or illness, getting back into the workforce is proving to be tough and for many of those folk their later years are going to be a struggle.

Equally, as Mauldin points out, the younger generation is being locked out of the jobs being hogged by the over 50s.

Another aspect to that is those employed Gen-X’s and Y’s hoping to get a crack at a seniors manager’s job or their name on the partner’s list are going to find a longer wait as the boomers hold on for as long as they can.

Those young ‘uns need those high salary jobs too, a Westpac report on US student debt posits that crippling education costs are making it harder for graduates to participate in the workforce and affects their spending power when they do find a job.

What’s clear is existing government, corporate and social structures are beginning to struggle with the realities of the changing workforce and its demographic composition.

On a personal level, those Gen Xs, Ys and boomers who are locked out of the workforce have to find a new way to participate in the economy. It’s probably those locked out of today’s workplaces who will build the businesses of the future.

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