27 APR 2018
As technology continues to shift employment patterns, and the skills required to succeed, is the industry ready to adapt and flourish?
It is often noted, paraphrasing Bill Gates, that people tend to overestimate the short-term effects of technological change, while at the same time underestimating its long-term impact.
Artificial Intelligence (AI) is becoming more sophisticated allowing many tasks that form key aspects of people’s working lives to be automated.
It was in this context that Dr David Higgins of Birmingham University addressed real estate professionals in Sydney about the landscape of disruptive technology in the industry.
The Fourth Industrial Revolution, or Virtual Revolution, is changing the way people think, communicate and act.
This concept, largely associated with Klaus Schwab (Executive Chairman of the World Economic Forum), has been associated with the effects of digitisation and AI on the economy, as well as biological technologies.
Essentially, the boundaries between the real world, virtual world, and machinery are breaking down – changing the way humans live and work. Technology is becoming embedded in societies in new ways, with breakthroughs in a number of fields, including robotics, AI, quantum computing, Internet of Things, 3D printing and autonomous vehicles.
These changes are reflected in behavioural relationships and the major restructuring of market economies and business activities.
But how does this relate specifically to the impact on the real estate industry? Major opportunities and risks can be divided into short, medium, and long-term impacts.
An example of short-term impact is digital presence – for profile, individuals need to build and manage their digital presence through a multitude of online platforms.
Companies, such as retailers, can combine information from individuals’ online, paperless transactions and facial recognition, providing a wealth of information to retailers.
The positive impact includes a faster and more targeted retail experience, and personalised offerings. However, the negatives can include serious privacy issues, potential profiling, and identity theft.
Those in real estate also need to be aware of the effect these changes can have on the configuration of shopping centres – will they become more like showrooms with a leisure focus?
In the medium-term category are technologies such as autonomous vehicles.
For example, autonomous trucks offer many potential advantages, including simpler and more cost-effective supply chains, less congestion and pollution, and improved road safety.
Nevertheless, the effects on real estate could be major. The locations servicing the transport industry will reduce and change focus. And there’s the potential for much logistical real estate to become obsolete – it is not simple for warehouse facilities to change use.
One of the most relevant long-term impacts of digitisation for real estate is the potential of Blockchain technology.
The technology associated with Blockchain can provide real-time access to shared data in a secure manner. Real estate listings could be centralised, the storage of title records could be simplified, and efficiency and security in the transaction process could be increased.
The potential for the real estate industry is clear with more information available instantaneously and with more transparency. It could also allow for reduced transaction times and better market liquidity.
However, there are significant issues with governance and accountability in the process, including its attractiveness to criminals for laundering money through digital currencies. The impact on professional service professions could also be significant.
As the real estate industry begins to embrace technology that can offer efficiency, improved safety and security, the potential negative consequences must also be considered.
The skills required to succeed in the industry are shifting, with professionals needing to offer different kinds of value in their offerings. How organisations and individuals adapt to changing technologies will determine their success in The Fourth Industrial Revolution.