the urban frontier

Image @NASA

The development business is a beautiful thing. Its ambitions shape cities, and cities enable the brilliance of mankind. Developers are in the city-building business—the human potential enablement business. That business is evolving in a very dynamic way, causing uncertainty and creating new opportunities. In rapidly changing situations, there is utility in reasoning from first principles.

The built environment is a complex, technological system. It is inseperable from the broader patterns of technological progress. Thinking about how technology progresses can prompt insight into how the built environtment evolves.

For most of human history, we were foragers. The economics of foraging was defined by nomadic, hunter-gatherer tribes that produced little to no energy surplus. All energy was consumed in the plight to survive. There were no major permanent settlements. All that changed around 10,000 years ago with the agricultural revolution.

The agricultural revolution was a multi-thousand-year transition period that introduced the agricultural age. Think of the agricultural age as a roughly ten-thousand-year economic supercycle. Agricultural land use generated a small energy surplus. This enabled the first significant permanent settlements, and eventually, economic surplus and trade growth.

Agricultural economies grew and evolved very slowly for thousands of years, until the 18th century, when the pattern was disrupted. The Industrial Revolution was the first major period of economic transition. It marked the end of the agricultural age and the start of the industrial age. Think of the industrial age as the second economic supercycle. Industry 1.0 technologies (steam power, mechanization, and ironworks) ushered in a new economic paradigm driven by industrial technologies. The agricultural economy continued to grow, but the prime mover of economic value creation shifted from agriculture to industry.

Roughly a century after industry 1.0 moved the economy into the industrial age, industry 2.0 technologies (electricity, telecommunications, and steelworks) intensified industrial development. The next fundamental shift, however, arrived in the mid-20th century with the computer revolution.

Industry 3.0 technologies (computing, networks, and electronics) marked the end of the industrial age, and the beginning of the information age—the third economic supercycle. The agrarian and industrial economies continued to grow, but information became the prime mover of economic value creation. Information technologies integrated agriculture and industry and created a new global information economy.

Now, we are in the midst of another transition period. The fourth economic supercycle is beginning.

This is one interpretation of the pattern. Each revolution adds to the energy surplus of civilization, enabling a new layer of technology-driven economic growth on top of the existing economy. Each revolution shifts civilization into a new economic supercycle, the total economic pie grows substantially, and the new paradigm fundamentally redefines how people live.

On average, civilization is better off with each revolution. The paradigm shifts, however, are destabilizing. They cause chaos and introduce novel risks that existing firms and individuals are not always well-equipped to mitigate. Some firms from the previous cycle ultimately fail, and some people lose their jobs. This is creative destruction.

Despite the pattern, it’s very difficult to make any predictions in this space; technology and the economy are chemistries of infinitely recursive, complex adaptive systems.

Complexity aside, it’s not unreasonable to posit that we are on the cusp of the next economic supercycle. What that supercycle may look like is a separate topic. For now, it’s just worth pointing out that due to the increasing pace of technological innovation, this transition period is likely to be more disruptive than the computer revolution that brought on the information age.

The coming era is likely to be extremely dynamic for the built environment. There is constructive interference beteen the waves of industry 1.0, 2.0, 3.0, and 4.0. The possibilities this implies for new appraoches to development are many. New domains will open.

Progress in augmented reality will enable the extension of finite physical built space into infinite digital space. The resulting spatial experience will be a seamless integration between the built environment and the internet. Progress in virtual reality will enable entirely new spatial environments. These changes may unlock new captial market dynamics for virtual space built on cryptonomics.

Progress in material science, engineering, and architecture will enable super-high-performance structures. Progress in robotics and advanced fabrication will fundamentally retool the construction industry. This technical progress will catalyze experimental new jurisdictions — first in existing cities, then in startup cities, and eventually, off-world.

This physical/digital, on-world/off-world spatial environment is the urban frontier.