Published On: Mon, Nov 5th, 2012

Can New York Recover? Why the answer will sadly be no! Sandy

Robert Paterson has a great post today about the aftermath of Sandy on New York City, in which he argues that the city will never be the same again.  It is a good argument and worth thinking about:

 

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50 million people left their villages in Europe to come to America. But their idea of America was not the farming heartland but this, the ultimate symbol of the new industrial world.

Millions of country boys and girls also left their rural hamlets for the big industrial city too. And this was the best city to go to if you had any ambition.

New York embodied all that was attractive about the industrial model. The density created opportunity. It was efficient.  It created a very dense network based on face to face. Just like this.

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This image by Valdis Krebs shows me the attraction of the big city and of all big cities, New York is the great face to face attractor. Look at how each business sector has its own hood.

Diamond
This is 47th Street. Every sector has its own version. Wall St. 42nd St, Madison Ave.

So bearing this in mind what does Sandy mean?

New York’s vibrant face to face communties depend on a highly centralized industrial system. The power, the gas, the food all are supplied by a system that is very brittle. New Yorkers are utterly dependent on this brittle systems as so many are discovering this week.

Now can New York afford to defend these brittle systems, the subway, the electrical systems, the roads, the gas supplies, the just in time food supplies? To repair the existing damage will cost billions. To simply build a bigger wall will cost more and still expose the city to a bigger storm and then an even bigger collapse – as New Orleans found out. To reinvent New York is I think beyond the imagination of most people.

Can New York bear the costs of even a rebuild? Not just the dollar costs but the new insurance and banking burdens that are inevitable? Can New York afford the create fortress New York? My bet is that it cannot. My bet is that as the costs of defense rise, those that can move will start to move. It will be the sharpest organizations and the smartest people that will start to move.

They can do this because of this.

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Today you can have the community and the density of interactions that were once only possible in a great city like New York on the web. Provided that your part of the web is not located in a vulnerable place like say New York!

Once 20% of the best have left, New York is going to start to wither. This is how all great industrial organizations will wither. Once 20% of us stop buying drugs from big pharma, or food from the supermarket, or the print edition of the New York Times, the fixed costs of the organization kill it.

Mayan
Not long ago America had many great cities. But then, the destruction they caused to their local environment became too great and the people left. They had too. Once enough had left, the rest had to leave too. Cities are not eternal.

I think that industrial models for cities and for organizations are at the tipping point. I think that there is a case to be made that New York, the symbol of all that was great in the Industrial Era, has suffered a mortal wound. I think that New York is today a new symbol of what is to come for all the great industrial organizations. I think that all organizations that are based on this model will go the same way.

The pattern looks like this. Events will take place that will take away 20% of the topline. The embedded fixed costs will then eat away at what is left. We see this now in media.

Corporate-Earnings
So long as the Times holds onto the press and the paper, it has to die. It cannot generate the revenues to keep the machine going.

This is the tragedy that will unfold in the next decades. But this does not have to be a return to the jungle as in Mayan times. This could be a wonderful opportunity – just as New York was in 1880 but in a new way.

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Today millions are leaving the industrial world, just as their great grand parents left the Shetl or the Irish village. They too are going to a place where the beacon of Liberty shines forth and offers them the same deal. The deal is liberty and the opportunity to be who you really are.

It is of course the connected human world based on the return of the artisan who in this new world is connected to not only her local community but to the world.

Robert Paterson’s website is great and he has also published a number of books.  Go check it out.

 


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