Our clients, colleagues, and the media ask us all the time – where is the future of real estate headed, and how can I stay ahead of the curve? To begin answering that question, JLL hosted an event at The Logan Hotel on October 3: “Disruptive Innovation and the Future of Real Estate.”
Joined by Marcus Shingles, an insightful futurist and the CEO of Xprize, we sought to understand the technological and cultural shifts that will propel our industry and society forward over the next few decades – and sooner. Together, we learned:
Growth is Exponential: While people are programmed to think in a linear way, that is not how technology is evolving. Instead, computing power is doubling every 18 months. This trend, known as Moore’s Law, is powerful and one that no war, economic downturn or historic event has affected. As a result, the technological advancements of the 21st century will not be on par with the 100 years of progress from 1900-1999. Rather, they will be comparable to 20,000 years of progress, were it to occur at the same rate.
“Uber Yourself Before you Get Kodaked”: In other words, understand the difference between a competitive advantage and a disruptive one. For your company to stay competitive, you only have to be 10% better than your competition. To be truly disruptive, cultivate “moonshot thinking” and strive to be 10x better. The perfect example? Airbnb. In just four years, the company’s disruptive model allowed them to offer guests 650,000 rooms in 192 companies – all without owning a single hotel.
Innovate on the Fringe, Not In the Core: Your core business is designed to mitigate risk. It’s how you’ve survived this long. Unfortunately, innovation cannot happen in a vacuum. For this reason, new ideas, services, products should be launched independently under their own jurisdiction. Once an idea shows promise, it is tempting to absorb the new offering into your core business in order to allocate more resources towards it. Resist this urge. Instead, allow the innovation to grow and thrive until the “fringe” becomes the core.
The Smartest People in the World Don’t Work for You: Soon, companies like Uber won’t be the only ones who rely on the sharing economy to do business. The future of firms will be crowd-sourced, as it becomes faster, smarter, and cheaper to tap into the freelance market for top talent. If this is true, firms will slowly dissolve and one day down the road, marketing and legal departments could be a thing of the past. Luckily, this is just as beneficial to the “new worker”. Already about one third of millennials:
- Identify as “night owls”
- Believe they will be working mainly flexible hours in their careers
- Prefer to collaborate online
- And are currently freelancing.
And the numbers are beginning to show it. While the U.S. workforce grew 2.6% over the last 3 years, the number of U.S. freelancers grew 8.1% in the same time frame according to Upwork and the Freelancers Union. At this rate, freelancers will be the majority by 2027.
But how will all this innovation impact CRE specifically? In 7 strategic areas, say JLL International Director, Ron Cariola.
Blockchain: An online digital ledger recording every transaction could offer quicker and cheaper data in real time.
Internet of Things: Connected devices are already changing smart buildings and efficiency
Augmented and Virtual Reality: Virtual tours taking place anywhere, on any device, helping us reach new customers
Online Marketplaces: Online listings, transactions, and even financing are changing the way CRE does business and for clients, could even drive the extinction of brick and mortar retail.
Autonomous Vehicles: Self-driving cars could open up interest in the outskirts of cities, blurring the lines between cities and suburbs.
Artificial Intelligence: AI will one day streamline and simplify our workflow, allowing us to manage and process large data sets quickly and and widen the scope of what we can deliver to clients.
Coworking and the Sharing Economy: if the increased popularity of coworking shifts towards fully remote work, this will force owners to rethink their approach to space design and completely disrupt the way we lease properties.
With technology and culture changing this quickly, the future of real estate holds endless possibilities. For a recap video, visit our event page.