Experimentation

The Localnet requires a certain critical mass to function at all. An absolute minimum of one town is needed just for a “pilot” system. This would involve perhaps 10,000 properties.

The up-front cost of developing the initial hardware, software and building designs will be in the millions but can certainly be kept below £10 million. If it doesn’t work, this is a drop in the ocean to have risked.
The initial deployment does not, itself have to be cost effective. Even if the system were optimised – with automated handling used where appropriate and so on, it would still not be representative of the final system as the unit costs of each component will be far higher than they will eventually be when the system is rolled out nationally and/or globally.

The initial deployments will therefore be less than “seamless” behind the scenes. It may be cheaper and more flexible to hire teams of people to manually fill, sort and label containers overnight than it is to develop automated handling systems. Until the system has been tried and we have learned how people actually use it; what the real take up rate of each service is; where the design flaws lie etc. there is no point trying to automate all of the processes. What is needed in the pilot sites is flexibility in the system to adapt as usage patterns emerge.
However, the pricing models (which themselves have to be piloted and refined) should reflect the projected costs of the service once it has been automated and rolled out in volume around the country. The pilot system will certainly run at a loss day in, day out but its role is not to make money. Its function is to teach us how many people do take up a laundry service that is made available at so many pence per shirt; how many people do stop using their cars when alternative transport is available at £X per day and so on.
If it does work, there will be many more millions of pounds spent refining the components in light of the experience gained in the first deployments. But by this time, there will be real data to back up the return on investment models. This will tell us, for example, whether it is worth making the delivery vans prettier and custom built instead of adapting an existing chassis and engine train as will inevitably have been done for the pilot.

Green-field sites

As with many great technology ideas, localnet is much easier to justify on a “green-field site” – and in this case that’s a literal description rather than a metaphor. Existing communities are, by definition, already served by their Post Office, dairies, local shops and so on. None of these is going to try and take over the roles of all of the others at once.

A new house or even a new housing estate doesn’t help much as the system only works when the very significant costs of the system can be amortised over several thousand households – and ultimately many millions.

In a rural or suburban location, this means we need to be building a new town or suburb – with perhaps 90% or more of the properties in an area a couple of miles square being built from scratch. In a high-rise city centre, it may only take a few blocks containing half a dozen skyscrapers to reach this critical mass.

Luckily, there are such opportunities available today where the system can be introduced as a differentiator – to encourage people to move there – before rolling out to the rest of the country once its benefits are proven and the initial investment has been made.

Eco-towns

The concept of “Eco-towns” is now fairly widespread though the level of hype versus real benefit is hotly debated. In the developing world, the focus is on sanitation and improved quality of housing – and there can be a huge difference between such an Eco-town and the surrounding habitations. In the developed world, however, the focus is on renewable energy, better insulation and so forth. The problem here is that such features can just as easily be applied to any new house being built in an existing town. Eco-town projects are struggling to differentiate themselves and lack a “big idea” that would actually make them a better place to live while being more eco-friendly. In fact, I suspect that the fear that you might not be allowed to own or drive a car as you wish could discourage people from wanting to move there

In the UK, each of the fifteen proposed eco-town projects is being proposed and evaluated as a standalone and largely independent project. They are all subject to scrutiny by a panel of experts but the guidance being given to all is almost wholly concerned with the literal meaning of “Green Infrastructure”.  These guidelines, very nobly and necessarily, mandate the inclusion of nature reserves, trees, parks and so on – which is understandable given that they have been produced by the Town and Country Planning Association (TCPA) whose members regulate the placement and design of static features. This framework certainly does not address the need for innovation in how the myriad of local services are to be provided – let alone a radical rethink of them all.

With ten or more towns being planned, comprising over a hundred thousand dwellings, this initiative presents an amazing opportunity for bold thinking. An Eco-town with Localnet is truly a step forward. If you agree, please let them know by contacting them via http://www.communities.gov.uk/housing/housingsupply/ecotowns/

In an Eco-town development, where the vast majority of houses and the shopping and other buildings are to be built from scratch, the incremental cost of building a localnet instead of the traditional piecemeal infrastructure will be a tiny proportion of the overall cost.

Prestige Developments

We have seen some amazing property developments over the last decade – particularly in the Middle East. The “Palm” and “World” developments off the coast of Dubai and the huge skyscrapers being built there are the most obvious examples.

As more and more such developments complete and the credit crunch tightens, however, an amazing location and view will not always be enough to sell the properties. Differentiating a development by offering a higher standard of living is a great way to sell more properties at a higher price.

The first skyscraper to offer localnet with a dumb-waiter delivery hatch direct to your kitchen should prove very attractive to all of us. Whether we’re fed up having to fetch our weekly shopping or keen to avoid a hundred paparazzi waiting for us to have to leave our penthouse, having rapid, affordable delivery on a par with the best room service in any hotel has got to be something worth paying for.

In a huge skyscraper, the cost of installing a localnet Dumb Waiter service is likely to be much less than 1% of the total cost yet could add significantly to the attractiveness of the development.