Weekly Updates
Weekly Updates
- A stranded asset is an asset that loses its value earlier than expected, normally because of changing economic structures. The fourth industrial revolution is already turning previously secure investments into liabilities.
- Real estate has some obvious stranded assets. The number of malls in the US is falling and vacancy rates are rising as people do the boring bits of shopping online. Office vacancy rates in the US and London are at a 20-year high, as flexible working becomes embedded in our culture.
- Education is a different type of asset, and may become a stranded asset. The “STEM” subjects (science, technology, engineering, and mathematics) could be vulnerable. STEM skills have traditionally become obsolete more quickly than other skills. It is easier for technology to replace the absolute skills of STEM than other more abstract subjects. Much of computer coding already has the look of a stranded asset, and other STEM skills may follow.
- This is a challenge for policymakers looking to smooth the path to a brave new world. There is no point building infrastructure that connects stranded real estate assets to an economy that no longer cares. Similarly, education needs to offer flexibility, and less scientific subjects (including, of course, economics) may be more important in creating future economic success.
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