The Big Fear is Recession – The Big Idea is Sustainability

Enough solar energy falls on built urban infrastructure to make it sustainable with respect to energy use. The construction industry is well placed to deliver that technology, the main component of which is a glass structure over concrete and other built infrastructure.

Many of us have experienced more than one boom and bust: there has been the house price boom, dot the com bubble, sub prime mortgage lending and now the Euro crisis. So here is a piece of ‘back of the envelope’ economics; each of those recessions really kicked off about twelve months after the oil price peaked – most notably and obviously the recession that followed nineteen seventies oil crisis. The price of the black stuff has proved a reliable indictor and the business world has behaved like a manic child in a large glass room. The child sets off running until it meets a wall and then, wallop, smacks its head into the glass. The kid sits on its backside for a while, rubbing its head and then stands up and starts running again: in another direction this time, if it has any sense. The wallop again, I think you get the idea. That’s the history of business in our boom and bust economy. The glass wall is the limit of sustainability: both economic and environmental.

This time is different – the number of times economists have said that during the last forty years. However this time it really is. When we were in our twenties and thirties getting up and running again presented little problem. Today there’s a lot of businessmen in their late fifties who, when they stop seeing stars, say, “Sod this for a game of soldiers, I’m retiring.” Consumers too are adopting the same mindset. If you are in the conservatory business a lot of your customers will be greying couples looking for somewhere to sun themselves during the autumn of their lives – people you would rather offer a lifetime guarantee to than a fifteen year one. These customers are on the defensive. While near zero interest rates makes borrowing money cheap it also wrecks pensions and cash investments. As I’ve mentioned in previous articles people are abandoning the idea of sunning themselves in conservatories because, for the same money, they can invest in the best deal in town – roof top photovoltaics. Overall all the signs point to our economy experiencing the sort of fear and clamming up usually seen before a full-blown depression rather than a short-term bust.

We also have another problem - the glass room has got a lot smaller. The period between busts has been getting shorter as more of the developing world buys into consumerism. Now even younger business people feel they are only a short sprint away from the point where commodity shortages will knock them down again. So it’s time to think outside of the (glass) box.

‘Thinking outside the box’ probably ranks up there with ‘going forward’ as the term most likely to persuade people to stop listening and start reading the label of the bottle of Highland Spring on the conference table. However:-

Did you know that 1.5% of the UK that has been built over? By ‘built over’ we are taking about concrete, tarmac and brick infrastructure. That should not surprise many of us as we have had a hand in doing this. The point is that enough solar energy falls on that 1.5% in a year to meet the whole of the UK’s primary energy needs: actually, enough to meet it a thousand times over. So basically if we could capture one thousandth of the energy that lands on built infrastructure the country would be self sufficient in energy and the limits of sustainability would be pushed back over the horizon. Actually it would be a tall order capturing just ten thousandth but the concept should interest anyone in the glass structure industry. It is this part of the building industry that not only creates built infrastructure but adds the layer of glass needed to keep solar energy trapped within it.

Turning built infrastructure into a power station sounds like an abstract concept: well actually at the moment it is. But big ideas are what we need when small ones no longer cutting the mustard. Most small and middle size companies have been locked out of the energy market for so long there is a widely held belief that this entirely the domain of big established players. That is also how the high technology market looked when companies such as IBM, Burroughs and ICL ruled supreme. It was the arrival of the microcomputer that proved a game changer and let small electronic companies grab a share of the action. Here are a couple of points that you may want to take on board from the rise of companies such as Apple, Dell and Microsoft.

Firstly, most successful business plans are written in retrospect and in the early eighties the market was so small you could make quite an impression with a handful of electronics and a good idea. No one then knew where the market would go and even the most outlandish dreams did not foresee a world where everything would end up going digital and into your pocket. So a lot of companies developed sophisticated computers but produced the manuals on a conventional typewriter. It was a while before two halves of this new industry; hardware and software got together and created the word processor. The hardware companies that failed to see they needed software spent the rest of their lives fixing pieces of silicon to fibreglass.

Secondly, just because you were well placed at the start of the IT revolution did not necessarily mean your management fully exploited that position. Olivetti should have cleaned up in the word processing market but did not break away from the traditional typewriter format for its word-processing product until it was too late.

So lets recap. We have a big, global, problem in that our economic system is no longer sustainable. Enough solar energy falls on built urban infrastructure to make it sustainable with respect to energy use. You are well placed to deliver that technology, the main component of which is a glass structure over concrete and other built infrastructure. You will need to sit down cross legged, Steve Jobs style, and say to yourself, “I’m not just in the conservatory and greenhouse business, I’m in the energy management business.’ Then all you need is the ‘software.’ Now it is time for the advertisement, and to click on this Steinkrug

Stay cool, maintain a clear view and have a good weekend.

Peter Kruger

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