I’ve recently become very interested in Nassim Taleb’s idea of The Black Swan. The Black Swan is an unforeseen and unpredictable event that has an enormous impact on society. There is no way to predict the coming of a black swan event, but history has shown us again and again that these events occur with regularity. What is unknown is when.
Many, through hindsight, have suggested that some events like the financial crisis of 2008 were predictable, but we all know even with hindsight that timing the event was impossible. Therefore even the most minor of the events remain completely unpredictable. As a quick aside I don’t agree that a Black Swan Event can be a positive event such as the birth of the internet since the impact is far to long term for my definition. Only a devastating event has enough impact to change the “known” landscape in an instant.
The reason I bring this up is one of the interesting ideas that goes along with this is the notion of collective blindness leading up to the event. I personally think that to a large degree we have seen collective blindness as a contributing factor to why we had the financial crisis. Everybody enjoyed the endless growth, but nobody was willing to step back far enough and ask whether it was sustainable and what would happen when the music stopped.
Taleb’s basic theory is that all consequential events come from the unexpected. So thinking of all of this, I find it fascinating to look at the current state of the golf design business. I was reading about the level of work in the Far East and reflecting on how many architects are concentrated and busy in this region. A high percentage of that work is being done in China with a large percent of that on Hainen Island in particular. I kept thinking about this concentration of architects and projects and wondering what if the music stopped tomorrow?
What would happen to the golf design business if the government of China “enforced” the ban on new golf courses? What if the real estate market collapsed since nobody appears to play the game?
Last year we saw the moratorium on golf in China enforced. Many courses were plowed under to return to farming. Currently the government is reviewing the courses that were built illegally and deciding what to do with them. Things have definitely changed ... for now? … for the long term? … we just don’t know that answer and it will not come any time soon.
In my mind when I wrote the first piece, I thought was the next shoe to drop for golf course architecture was a complete stop to golf development in China. The financial crisis was obviously the first and will be the most meaningful for this generation because it has impacted the access to capital for projects. It was a generational event for golf course architects. The impact of China is more regional in nature, but that does have a spillover effect.
On the high end, people like Bill, Tom and Bill are busy because that end of development never goes away. We need to keep sight of the fact that they are the exception, not the rule. So let’s talk about the other 99% of architects. The China based firms have laid off their employees and will see another round of new architects entering into the competitive fray.
In 2009-2010 (this is an estimate on my end based upon personal relationships) I figured about a quarter of the architects ended up having to find a new profession through necessity. In 2015, I see another similar period where competition goes up exponentially and some will not find enough work.
I do think the design/builders may do fine since they have more options for survival, but all the new architects will face a very Darwinian atmosphere where few will thrive. I expect by the end of 2016 it’s quite likely we will see another 25% forced to look at other industries.
So is that it? Is that the great (and perhaps necessary) thinning of the herd?
I don’t think it is.
Perhaps it’s my deep love of writers like Cormac McCarthy but I don’t think we’re done. The Financial Crisis wasn't predictable. China couldn't be predicted because there was no transparency in the process. While we knew it was based upon the early speculation of a transitioning society, we also knew that progress would be controlled and that meant stops and starts along the way. The only revelation was nobody mentioned water as a potential factor in slowing or stopping golf development in China
Which brings me to the point I wanted to talk about. Is access to water the next Black Swan Event looming over golf architecture? I don’t think it will impact everywhere, but it will in regions where the resource is scarce. I think the next Black Swan Event will be a moratorium on new golf development in locations where water is transferred from another watershed to meet the needs where water is short. I see California being first, but other Southwestern states will eventually follow.