:: Carry-on ::

Saturday, July 10, 2004

I bought a Palm V PDA in 1999. It was top-of-the-line then, with a blazing fast 33-mhz "Dragonball" processor and expansive 160x160 pixel monochrome screen. I put it to good use too, storing up contact information and downloading news to read in a small darkened room while showing college freshmen clips of "Halloween" and "America's Funniest Home Videos". But it quickly succumbed to the rapid change inherent in its industry, and a couple years later it was junk. Now I have a Treo 600 with an "ARM" processor five times as fast and a color screen. Plus it's a phone to boot.

No one bats an eye at this. First there was unavoidable obsolescence, then designed obsolescence. Now there's presumed obsolescence. Needs change, available solutions change, costs change.

Take the apartment building I stare at from my living room window as an example: the needs - the base living requirements - serviced by that building to its residents have not changed dramatically in the past fifty years. The supply of alternatives is vast - should one absolutely require an elevator, one may simply up and move (well, perhaps nothing is "simple" when it comes to the real estate market in my neighborhood, but still...). The cost of either upgrading the existing units or razing and reconstructing the whole building is enormously expensive. The end result is a marginally obsolete structure (no elevator, built-in A/C, and so forth) with a sufficient number of substitutes to make renovation or reconstruction unjustifiable given the expense. The landlords lust after the higher rents they could charge for those shiny new spaces but realize modernizing has its costs and they have a steady income as it stands. Stasis it is.

Normally substitutes offer incentive to compete. If Coke tastes better, Pepsi gets to work saturating their syrup with more sugar and secret spices. Yet it's important here to remember that unlike electronics, cars, and soft drinks, the number of takers for Manhattan real estate is for all intents and purposes infinite, making the demand shockingly inelastic (i.e. unaffected by shifts in price point and quality). Produce a shoddy dishwasher and your sales will drop. Put a 200 square-foot basement studio apartment / rat-burrow on the market for $1000 a month on the corner of Wooster and Prince and it will be leased in a matter of hours.

Airports are immensely fascinating in that they are subjected in a singular manner to the interplay of all the forces above. Airports are, with rare exceptions, local monopolies (even the three largest cities in the U.S., all of which have multiple international airports, stratify them to target differentiated clusters of routes) operating in what is nationally and internationally a hyper-competitive market. Even while fighting fiercely for domestic cargo routes, the same airport may fail to address myriad international customer (either the airlines or their passengers) complaints despite no shortage of substitutes, relying on the inexhaustible demand for overseas travel. Each must cater to tourists and businesspeople staying for a brief while, locals who will pass through dozens of times each year, and passengers transferring flights who will never set foot outside the terminal, and may well never return. The rate of industrial change is not as breakneck as mobile phones or semiconductors, but it is constant and pressing. New planes require wider runways, security enhancements necessitate physical reconfiguration, and the evolving practical concerns of travelers (Wi-Fi access, modern parking structures) must be catered to. Almost every change brings with it a burdensome cost, but none more so that expansion or relocation. To paraphrase 50 cent, airports love space like a fat kid love cake, and that space has become increasingly rare. Acquiring new land on which to build has become a financial impossibility. Only one major airport and 19 new runways have been built in the entire United States in the past 25 years. Yet they can't just stand still.

So airports renovate. And remodel. And rebuild. But they never replace themselves entirely. They simply can't afford to fall back on the old American panacea of sprawling outward to the frontier, or tossing out that old Palm V in the garbage. Resource scarcity, like the residents of the apartment building across the my alley, keeps them where they are, but encroaching obsolescence, like my PDA situation, motivates them to upgrade constantly. They straddle a deep divide, impossibly static and irrepressibly dynamic. People could learn a thing or two from airports (coincidentally there's been only one of me built in the last 25 years as well).

Posted by morland @ 05:07 PM

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