GAR 2015 Main Report

200

Part III - Chapter 10

10.1 Comparative advantages or

contingent liabilities?

Disaster risk is rarely made explicit to investors and is often only discovered in the event of a disaster. This risk not only affects large businesses, but also impacts the national economies that receive investments, small and medium enterprises, and the labour force. Thus, hidden contingent liabilities come bundled together with the comparative advantages offered to business investors.

The Slough Trading Company Limited was founded in 1920, and in 1925 it established one of the world’s first industrial estates on the western outskirts of London, United Kingdom. By providing ready-made factory buildings with art deco style offices on the street side, dedicated rail connections and its own power station, the Slough Trading Estate rapidly attracted business

investment. By 1932, high-profile companies like Citroen, Gillette, Johnson & Johnson, Mars and Berlei had set up shop on the estate, which currently accommodates 400 businesses across a wide range of sectors, including automotive, food processing, engineering, biotechnology, pharmaceuticals, logistics, information technology and telecommunications. Ninety years after its establishment, it is still Europe’s largest industrial estate under single ownership.1

In many ways, the Slough Trading Estate ushered in a modern era of footloose, spatially flexible, economic and territorial development no longer constrained to specific places by the availability of raw materials, energy (especially coal), sea or canal transport, and labour. The estate prefigured a model of flexible accumulation (Harvey, 1989

Harvey, David. 1989,The Condition of Postmodernity: An enquiry into the origins of cultural change, Cambridge and Oxford, UK: Blackwell Publishers.. .

) in which investment was attracted to locations through a combination of objective advantages, such as plug-and-play factory space, purpose-built power and communications infrastructure, access to markets, and a large skilled work force, as well as through aesthetic and other intangible values. The art deco design that characterized many industrial and residential buildings in Slough during the inter-war period certainly projected an image of unashamed modernity that, 90 years ago, was a perfect fit for the ethos of this emerging model of economic development.

In today’s globalized economy, countries and cities in all regions compete to attract foreign direct investment (FDI) using the same mix of objective advantages, including low labour costs, access to

Figure 10.1 Art deco faade on the Berlei offices in Slough Trading Estate (now demolished)

(Source: http://modernism-in-metroland.tumblr.com/ost/46923045449

[accessed 11 January 2015].)

As economic investment continues to flow to locations offering comparative advantages for capital accumulation, there will be a continuous increase in the exposure of economic assets to earthquakes, tsunamis, storm surges, floods and other hazards.

While several countries now seek to include disaster risk in their public investment planning, the limited availability of appropriate risk information and weak capacities at the local level still present serious constraints. And given the growing interconnectedness of urban systems, global supply chains and financial flows, disaster risk will become increasingly systemic.

	200 Part III - Chapter 10 10.1 Comparative advantages or contingent liabilities? Disaster risk is rarely made explicit to investors and is often only discovered in the event of a disaster. This risk not only affects large businesses, but also impacts the national economies that receive investments, small and medium enterprises, and the labour force. Thus, hidden contingent liabilities come bundled together with the comparative advantages offered to business investors. The Slough Trading Company Limited was founded in 1920, and in 1925 it established one of the world’s first industrial estates on the western outskirts of London, United Kingdom. By providing ready-made factory buildings with art deco style offices on the street side, dedicated rail connections and its own power station, the Slough Trading Estate rapidly attracted business investment. By 1932, high-profile companies like Citroen, Gillette, Johnson & Johnson, Mars and Berlei had set up shop on the estate, which currently accommodates 400 businesses across a wide range of sectors, including automotive, food processing, engineering, biotechnology, pharmaceuticals, logistics, information technology and telecommunications. Ninety years after its establishment, it is still Europe’s largest industrial estate under single ownership.1 In many ways, the Slough Trading Estate ushered in a modern era of footloose, spatially flexible, economic and territorial development no longer constrained to specific places by the availability of raw materials, energy (especially coal), sea or canal transport, and labour. The estate prefigured a model of flexible accumulation (Harvey, 1989 x Harvey, David. 1989,The Condition of Postmodernity: An enquiry into the origins of cultural change, Cambridge and Oxford, UK: Blackwell Publishers.. . ) in which investment was attracted to locations through a combination of objective advantages, such as plug-and-play factory space, purpose-built power and communications infrastructure, access to markets, and a large skilled work force, as well as through aesthetic and other intangible values. The art deco design that characterized many industrial and residential buildings in Slough during the inter-war period certainly projected an image of unashamed modernity that, 90 years ago, was a perfect fit for the ethos of this emerging model of economic development. In today’s globalized economy, countries and cities in all regions compete to attract foreign direct investment (FDI) using the same mix of objective advantages, including low labour costs, access to Figure 10.1 Art deco faade on the Berlei offices in Slough Trading Estate (now demolished) (Source: http://modernism-in-metroland.tumblr.com/ost/46923045449 [accessed 11 January 2015].) As economic investment continues to flow to locations offering comparative advantages for capital accumulation, there will be a continuous increase in the exposure of economic assets to earthquakes, tsunamis, storm surges, floods and other hazards. While several countries now seek to include disaster risk in their public investment planning, the limited availability of appropriate risk information and weak capacities at the local level still present serious constraints. And given the growing interconnectedness of urban systems, global supply chains and financial flows, disaster risk will become increasingly systemic.	Page 1 Page 10 Page 20 Page 30 Page 40 Page 50 Page 60 Page 70 Page 80 Page 90 Page 100 Page 110 Page 120 Page 130 Page 140 Page 150 Page 160 Page 170 Page 180 Page 190 Page 191 Page 192 Page 193 Page 194 Page 195 Page 196 Page 197 Page 198 Page 199 Page 200 Page 201 ->Page 202 Page 203 Page 204 Page 205 Page 206 Page 207 Page 208 Page 209 Page 210 Page 211 Page 212 Page 213 Page 214 Page 220 Page 230 Page 240 Page 250 Page 260 Page 270 Page 280 Page 290 Page 300 Page 310