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Rovelli, Pink Floyd, Copernic©us, and Adams
Easy, (Free) Rider

“Life is what happens when you are busy making other plans.”

John Lennon

Follow The Entrepreneur – Investor Summit in Mykonos 2022 (globalftenetwork.com)

The Pandemic has produced many changes. Some are temporary, like masks. Some appear permanent, like Working from Home (WFH). More than that, the Pandemic did not occur in a vacuum. It interrupted life but, as ever, life has a habit of happening anyway.

The covariance of our plans pre-Covid and the implications for life post-Covid are likely to be the defining characteristic of economics for decades to come.

Take demographics and transport.

At present, much of the workforce of the G7 spends a proportion of its working week at home. While the data is not yet complete, it is clear that a significant proportion of this workforce intends to make WFH a permanent feature for part of the week. This feature alone has altered the demographics on which much economic planning is based.

Add to this the accelerated development of Electric Vehicles (EV), both from regulatory and production perspectives.

By 2035, you will not be able to buy anything other a new EV in Europe and North America. Acknowledging this, OEMs (Original Equipment Manufacturers or car producers) have accelerated their design and production of EVs.

So, we are likely living in different places than before the Pandemic, more likely to be spending some of our working time at home, and mandated to buy an EV when we want to buy a new vehicle by the middle of the next decade.

The transition to EVs was long planned. Life, in the shape of the Pandemic, happened and we must now acknowledge the issues created by this confluence of events.

Centrally, a clear implication of this confluence is a change in the balance between Mass and Personal Transit. For decades, the impact of car emissions has been mitigated by encouragement to use mass transit systems (MTS). Reasonably, this allowed that, for a similar emission, more people could be transported.

What if there are no more emissions from personal vehicles? What if, on that basis, MTS were more polluting than the car on our driveway? What if we could work in offices where our vehicle was parked outside and our commute to work was alone, accompanied by our own sounds, and within our own environment?

We are not alone in asking these questions. We suspect that anyone waiting for a train or bus on a Monday morning to take them to an office from which they will only have to return is asking exactly the same question.

What if I could work from home and drive to work when I need to go to the office?

In the United Kingdom, the ramifications of this question are already starting to appear. On 13 September 2022, The Guardian newspaper reported on a Freedom of Information request it had made as to the dispositions of house builders towards EV charging points. The results appeared in several other newspapers as the house builders, whose economics have benefited from the move to WFH in different places, were reluctant to add to their cost bases by installing charging. Indeed, it would appear that they would prefer that homeowners made their own decisions, at their own cost.

In economics, this attitude is often referred to as the “Free Rider” where economic actors take advantage of universal service provision without paying for it. It is a market failure and, as such, is often cited as a basis for Government provision of the service.

The issue, as we see it, is that the transition to EV is beset with Free Riders throughout the process. The scale of the move, changing decades of transport choices, is seen at the macro level best addressed by treasuries and Governments who have the ability to decree and pay for the national infrastructure required to make the transition a fact.

And yet, these very Governments are still dealing with the fall out from the Pandemic, not least in attempting to contain the inflation caused by the spending required without recourse to interest rates necessary to address it.

Thus, we are on our own, if only for now. Absent help from industries who are happy to “ride” free on Government spending and Governments which are no longer “free” to spend as they did in 2020 and 2021, the transition to EV will be home grown and driven by rugged individualism.

The future of mobility is unpredictable save that it is not going to be like the past. Our session, at the forthcoming FTE Mykonos (Follow The Entrepreneur – Investor Summit in Mykonos 2022 (globalftenetwork.com), will examine how the macro could be overtaken by the micro. Specifically, we will look to how entrepreneurs, long the engine of growth, will once more provide the answers the commanding heights of our societies seem incapable of answering.

About Scott Fulton

Scott Fulton is an economics graduate and a capital markets specialist. From 1988 until 2000, he worked within London’s equity capital market as an Extel rated analyst in the Building and Construction sector for, amongst others, Bank of America Merrill Lynch, Credit Suisse and ABN Amro. From 2000, Scott moved into financial public relations and investor relations (“FPR” and “IR”). He was the director responsible for IR and M&A at Financial Dynamics (now FTI), Citigate Dewe Rogerson (CDR), Just Retirement plc (now Just Group) and Asda Burson Marsteller (UAE). On returning from the Gulf in 2015, Scott re-joined investment analysis at Whitman Howard (recently sold to Panmure Gordon) before moving into Proxy Solicitation, specialising in M&A, at Equiniti plc. Through his professional career, Scott has focused on and developed skills in investor relations

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