It all feels the same doesn’t it? Just like the good old days. Deals a plenty, MIPIM packed, champagne flowing and networking like crazy. It’s not the same though. The pre-Lehman days might look like they are returning, but they’re not. This time it really is different. A series of tech megatrends is set to have an enormous impact on society, and in turn the real estate industry. The days of property being primarily a people business are coming to an end.
First off, smartphones and tablets have ripped computing off the desktop and made it a mobile experience. That alone will transform the workspace as the need for a fixed desk becomes redundant. Without that anchor traditional space planning dies. Perhaps even the ‘office’?
The rollout of 4g and increasingly ubiquitous WiFi means that what is now possible when out and about is transformed. When you can get 28mb downloads on the London Underground you realise anything is possible. It will soon be that where you happen to be will have no impact on the services you can use. Don’t bank on the theory that regardless of connectivity, people like to be on top of each other. That only applies up until connectivity gets fast enough to replicate the experience. Wait and see.
The Internet of Things, where everything becomes a remotely monitored node on the network is set to have an economic impact of $2.7 – 6.2 trillion over the next 12 years, according to McKinsey. And much of that involves tech enabling the built environment to operate more efficiently. Property and facilities management will be transformed. And will probably involve a lot less people, albeit much more highly skilled.
Couple the above trends with the increasing use of ‘The Cloud’ to store data and software applications and you have the ingredients of a massive shift in the way people will use real estate. Simply put, no one is anymore tied to a single location to do their work. Everyone can have, on demand, the very best, most up to date software, and access to all their data, wherever they are. In this environment what real estate is ‘fit for purpose’? This year, or in 5 or 10 years time. Does one go for maximum flexibility? Or planned obsolescence?
And if all this potential change to how we use real estate wasn’t enough, what about how technical advances are going to impact on the work we actually do? According to Eric Schmidt, Chairman of Google, a broad range of jobs that once seemed beyond the reach of automation are in danger of being wiped out by technological advances. It used to be that computers were only really good for automating work of a 2+2 = 4 type. Repetitive, structured processes. But recently they have moved well beyond this and now have exceptional capabilities in analysing unstructured information, pattern recognition, natural language processing and machine learning.
It’s said that accounting and legal services may be particularly vulnerable in this new world of computing. The managerial desire to replace labour with capital being what it is, one can only guess at how much space these businesses will need in the future. To cap it all, more and more data is becoming common knowledge. Governments are slowly realising the value in making the data they control publicly available. Big Data is flavour of the month. Surely it is not long until all property data has that Glasnost moment, and becomes open and transparent.
And then the data will be consumed by that self same increasingly sophisticated software and analysed to death. Automatically. Wither research departments? Maybe this is why Google has just invested $50,000,000 in auction.com; perhaps they believe online automation is the future of broking?
As tech superstar Marc Andreessen has said “Software is eating the world.” And that will include how the real estate industry works as well as how real estate is consumed. And when that happens, property will shift from being a people business to a tech one.
PS: You’ve probably heard that a computer can beat any chess Grand Master, but did you know, in what is termed freestyle chess, a Grand Master paired with a computer can beat any computer on it’s own. So, for now at least, we’re still masters of the universe!
Image credit: Thampapon