DARING TO DREAM-INVENTIONS AND TECHNOLOGY
I don’t think of myself as an “inventor”. Certainly not in the way Nikola Tesla or Leonardo da Vinci were. But I do have a very curious mind and I am always striving for improvement.
This is actually how Ian and I came up with the Calnan Flack Economic Cycle Action Plan. For us what was missing in the area of Land Economics was how investors could practically apply the knowledge. This graphical representation of the cycle sets out the action’s investors should take throughout the cycle. It serves as our framework of thinking to ensure we make logical, appropriate decisions regardless of the emotion in the markets at any time.
It’s something that we are very proud of and have based our entire business on.
We believe in the cycle. We love teaching how the cycle must manifest and if you have been reading our blogs regularly you must have noted our bias for new technology and new inventions.
In fact I’ve been asked so many times why I write a lot about technology when Calnan Flack is an investment company?
Well, I’ll tell you what. The fact is I have a curious mind that is always fascinated with new things, new ideas and new ways of doing things. Though some of my friends would say my brain is full of useless crap!
Like the fact that Elisha Graves Otis of the famed Otis Elevator Company did not actually invent the elevator as many think, but rather invented something perhaps more important! See Elisha invented the “Elevator Brake” that stopped the elevator slipping when stopped at an upper floor. This of course eventually made high-rise buildings, well higher, and of course, ensured that this invention has continued to be capitalised back into the land price in spades.
But there is another reason why I’m interested and why I will keep talking and writing about new technology – TECHNOLOGY is a major driver of the Credit induced Cycle.
I believe that all these new innovations show how creative we are as human beings. And we know it will always manifest in improved productivity and hence increased land prices.
This brings to mind the Wright Brothers – Orville and Wilbur.
What many people don’t know about these brothers is before they got into the aviation caper, they had a number of successful start-up businesses. Innovation was in their blood. From a highly successful print shop and newspaper businesses, to their participation in the new bicycle craze!
However, the most amazing thing about these fellows was how they changed the history of aviation forever. Their experiments with flying led them to invent the world’s first successful airplane.
They made the first controlled, sustained flight on December 17, 1903, four miles south of Kitty Hawk, North Carolina.
Orville Wright, a high-school drop-out piloted the first powered airplane which rose 20 feet above a wind-swept beach. The flight lasted 12 seconds and covered 120 feet.
On the same day in another test flight, Wilbur Wright made another flight that lasted 59 seconds and covered a distance of 852 feet.
And from those trial-and-error days of trying to find ways to fly, the Wright brothers’ flying machine became the first fixed-wing aircraft.
According to aviation history records, although not the first to build experimental aircraft, the Wright brothers were the first to invent aircraft controls that made fixed-wing powered flight possible.
Like Elisha Otis they improved upon existing aircraft and cemented the fact that aircrafts would become part of the future.
Without any formal pilot training, the adventurous and inventive brothers used their mechanical skills they gained by working in their printing press, bicycles and other machinery businesses.
So, by improvising on what they already knew from their bicycle business, they experimented and pursued their belief that an unstable vehicle like a flying machine could be controlled and balanced with practice.
For me, the Wright brothers’ experiments in flying was solid evidence of man’s relentless pursuit of creativity and innovation.
What’s also interesting about the flying experiments and invention of the first airplane was that no one took any notice of it. It’s as if it never happened.
No one was interested at all.
Apparently, the Wright brothers sent a telegram to their father and asked him to let the media in Ohio know about their test flights. But the newspapers at that time didn’t write anything about it.
The Dayton Journal refused to publish the story, saying the flights were too short to be important.
Can you believe that?
The momentous event that would change the history of aviation (and land prices!) forever almost went unnoticed because no one thought it’s that important.
How the world has changed with Twitter, Facebook, Instagram and YouTube!
Eventually, the test flights got some small media coverage due to a ‘leak’ from the telegraph operator who sent the information to other newspapers. And of course, without any interviews or details from the Wright brothers, the article was inaccurate. But at least they got some press.
Eventually the Wrights issued their own factual statement to the press to try and straighten out the story. Nevertheless, the flights did not create public excitement—if people even knew about them—and the news soon faded.
What a shame!
Increasing demand for travel
There has been relentless technological advancement and continual improvement in aviation since that momentous day in 1903. All of which has ALWAYS manifested back into the land price.
Probably one of the greatest aviation examples of this is the airport.
And I’m not talking about Los Angeles (LAX) or Heathrow, Beijing (PEK) or even Dubai (DBX).
But rather Gander International Airport -YQX.
Gander what?! I hear you say….
Believe it or not, but C1950 this was the busiest airport in the world, handling some 13,000 aircraft annually and over a quarter million passengers.
Have you ever been there? Seen the sights?
I doubt it, as this airport is located in a country more famous for its dogs, than the aviation industry.
“Welcome to Newfoundland, Gander International Airport -YQX”
As you can imagine the infrastructure spend on the world’s busiest airport was enormous. The surrounding flow-on effect was massive for the economy and surrounding real-estate.
At Calnan Flack, we continually talk about how the price of land is intrinsically linked to its locational advantage.
And Gander International Airport was PERFECTLY placed as a refueling stop for Transatlantic flights.
Post-1945 Pan-American World Airways, Trans-World Airline, Trans Canada Airlines (later Air Canada), and British Overseas Airway Corporation (later British Airways) ALL commenced regular Atlantic air service and ALL Refuelled at Gander.
In the late 1930s, the sight of the world’s busiest airport was just forest! No inhabitants. No roads. No infrastructure. Just natures dirt.
But that all soon changed when we conquered Transatlantic flights – with the need for a fuel stop!
Once again nature and the natural locational value of a perfectly placed fuel stop for a Transatlantic flight placed Gander on the map.
World War 2 only expedited Gander’s locational importance, a strategic location to ensure the rapid movement of troops and supplies across the Atlantic. Gander International Airport played an important part in the 2nd World War not only militarily but also for the local economy.
During the war, unemployment was essentially zero in Gander but rationing did manage to stifle any immediate property boom. However, post 1945 it quickly made up for lost time. By 1950 a committee was formed with representatives from the Newfoundland Government, the Federal Department of Transport and the ALL IMPORTANT Central Mortgage and Housing Corporation. Their focus none other than housing……
It was decided that the best solution for workers and the economy would be to completely rebuild the city of Gander much closer to the airport – and that’s exactly what they set about doing!
But with every boom, there is a BUST and with the arrival of the Jet Age, let’s just say passengers chose to now fly direct, rendering Gander natural locational advantage as obsolete as the Sony Walkman.
In December 1957 MICHAEL P. MURPHY fatefully wrote in the “Atlantic Gradian”
“The economy of the town will perhaps always depend to a great extent on the maintenance of the airport and the planes that are constantly arriving and departing there.”
Sadly no one much flies to Gander anymore
Sadly no one much flies to Gander anymore. There is simply no reason you would and the world’s once busiest airport is just a shell of what it used to be….
It’s just another example of how technology (productivity gains) are ALWAYS built into (and out of!) the land price!
Improvement in air travel has continued. It’s quicker, more convenient and cheaper than ever, meaning more people are traveling each year.
The International Air Transport Association (IATA) expects 7.2 billion passengers to travel in 2035, a near doubling of the 3.8 billion air travelers in 2016.
According to the CEO of IATA, “Demand for air travel over the next two decades is set to double. Enabling people and nations to trade, explore, and share the benefits of innovation and economic prosperity makes our world a better place.”
This means a direct impact on the tourism industry which translates into higher land valuations and for those properties catering to tourists.
Overall, we’re seeing a lot of investment in hotels, resorts and other types of properties due to the increasing flow of travelers.
It all must manifest back into the land price.
Circular Runway Anyone?
Just as the Wright Brothers introduced man to the technology of air travel, we have continued to advance. Transatlantic flights, Jets and now Jumbos, Superjumbos and Dreamliners…
This interesting new idea caught my attention recently. It’s about circular runways. The idea was proposed by Dutch engineer Henk Hesselink who works at the Netherlands Aerospace Center.
It may sound like one of those ‘it doesn’t make sense’ or ‘are you crazy’? kind of thinking at the moment, but…..
Hesselink believes that a circular runway will be more efficient than the normal straight ones. Mind you, he said three (3) planes can land and take off at any given time on a circular runway. That means less waiting time. No need for your plane to go in circles for half an hour.
That will be fantastic.
A circular runway is also good for the environment as there will be less fuel burn and less noise, that’s according to Hesselink. Oh did you notice that they don’t require as much land?….
But, despite the promise and potential of this circular runway idea, it hasn’t flown. As with anything new and out of the usual of what people know, Hesselink’s circular runway proposition has a number of detractors.
Despite funding from the European Commission and some military tests in previous years, no one has actually built a circular runway yet.
Hesselink may have been a few years ahead of his time when he first came up with the circular runway proposal. But now it seems that his idea may finally fly. There seems to be more interest coming from drone makers and operators. They want more efficient and faster arrivals and deliveries for their packages.
For me, all these innovations, new technologies – out of this world thinking and ways of doing things are all positive in the long-term.
It doesn’t matter if they become a reality or not.
The fact is all the thought processes, the research and focus spent on all these things and technology will always have other applications.
They will manifest in some positive ways on how we live. Ultimately, they will all contribute to improving the quality and value of assets.
For example, there’s so much efficiency in the way we travel now. And the movement of cargo from one country to another has also seen so much improvement and efficiency.
And it won’t stop there. Take a look at this, Solar Impulse 2, the first solar-powered plane to make a around-the-world flight. It makes my mind boggle as to the possibilities – and looks a little like a single wing version of the Wrights “Magnificent Flying Machine”…
Dare to dream
So next time you’re called to board, you can appreciate how all the innovations and technology are making your travel much faster and more comfortable.
And for all the new technologies, innovations and disrupters that are still to come, it’s best that we keep an open mind.
Welcome and embrace them as they will always go back and contribute to the value of our assets.
Let’s dream big!