Global Assessment Report on Disaster Risk Reduction 2015
Making development sustainable: The future of disaster risk management

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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)
[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.
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