I am sure you are familiar with the lily pond parable. Of how the lily starts out tiny but doubles in size every day. For a long time not a lot seems to happen, the pond looks no different day after day, but then, as if by magic, the whole pond is covered. The pond looks entirely different. Suddenly the world has changed.
That is how it is in the world of technology. Moore’s Law is the observation that over the history of computing hardware, the number of transistors in a dense integrated circuit has doubled around every two years.
Today we have 1990s supercomputers in our pockets. The latest iPhone is already more than 50 times faster than the original, which came out in 2007.
By the end of 2016, with the iPhone 7, we are likely to have seen a 100x improvement in 10 years.
Something similar is happening with bandwidth, storage, WiFi availability, the cost of sensors and cloud computing. Improvements are happening at an exponential rate. Faster begets faster still.
But what has it got to do with us in real estate? Our industry is much as it was 10 years ago, before anyone had that supercomputer in their pocket. And anyway, all this change is over-hyped. It hardly compares with the 50 years that saw the arrival of electricity, running water, street lighting, the combustion engine and air flight.
Except, this is linear thinking. It is looking at the world through the lens of GDP growth, a mere few percentage points (if you are lucky) a year. But this reality masks the fact that the make-up of economies morph dramatically even when, in size, they do not change that much. Despite years of hangover from the meltdown of 2008, the global economy is being reconfigured fundamentally.
And that is what is affecting the real estate industry. The lily pond is perhaps a third covered; just a few iterations and it will be entirely covered.
So, in 2016 what should you be looking out for in terms of technologies?
● Digital thinking This is the mindset that looks at everything around us, and everything we do, and thinks, “Are there technologies that could be brought to bear on this that would make it easier, faster, cheaper, more enjoyable?” There are precious few areas where human and machine is not capable of doing more than human, or machine, alone.
● Virtual reality Virtual reality is set to hit the prime time in 2016, most noticeably with the release of the first Oculus Rift (owned by Facebook) headset.
We work in an industry that for much of the time is virtual, in that until we build something it does not exist. Hence the fortunes spent on brochures, videos and CGIs, most of which are pretty weak simulacrum of what we have to sell.
VR has the potential to utterly transform property marketing, by providing immersive, engaging environments that accurately reflect reality, before it exists. It is now time to take this seriously.
● Mobile optimisation In 2016 you must sort out how your online efforts look and perform on mobile devices. So much real estate content is unusable on a smartphone, despite that for many people this is their first screen.
UK mobile data traffic almost doubled in the past year. Five years ago 90% of all devices connected to the internet ran Microsoft software, today less than 20% do: to be PC-centric in 2016 will damage your business.
● Bandwidth You cannot provide too much bandwidth for your employees or your customers. Just before Christmas Ofcom released statistics showing how dramatically usage increases online as broadband speeds move above 40mb. Connectivity is the great enabler: the more you have of it, the more you can do.
The likes of WiredScore are now rating buildings based on their connectivity; real estate with a low score is redundant.
● Digital layer With high connectivity and mobile devices, you open up the opportunity to offer people real time and contextual services. That means information or analysis that takes into account temporal and spatial criteria. What you need to know exactly where and when you need to know it. This is the “digital layer” that sits atop the built environment. The extra data that can help to enrich the experience of a place. The “what is here, what was here, what can I do now, what do I need to know to make the most of the space around us?”
Placemaking was a hot topic in 2015; in 2016 there will be a greater recognition that technology needs to be co-opted to make great places. This is especially true of retail, where the notion of shopping is moving towards being an experience rather than a narrow distribution channel.
● The Internet of Things As an industry we need to embrace what is possible if we can capture more data from the places and spaces we build, occupy or manage. That means embracing the Internet of Things. That will enable us to add a myriad of sensors to record, analyse and share information that can be combined to provide insight into how we can optimise our world for the people in it. And then predict (to an extent) what needs to be done in the immediate future to make sure our spaces adapt to perform (in the widest sense) as well as they can.
As a by-product of making our places work better for humans, we will be more efficient and save money. But it is the desire to be better that will yield the results, not a simple desire to save money.
● Learning tools 2016 is the year to learn about, and apply, the huge range of machine learning tools that are now available.
Real estate is awash with data, but still we largely work on hunch, experience and intuition. How much better could we be if we added those human skills on top of more granular and more up-to-date data?
Amazon leads the way, even to the point where it is using predictive shipping to get goods closer to people it thinks are going to order them. Likewise, the burgeoning data-driven same-day delivery industry will nullify the practice of click and collect as a differentiator for physical stores. Real estate needs data to fight back.
The year 2016 will be the time to think about moving beyond having a digital strategy to being a digital company. That is, a company in which every action, process, product and touchpoint with colleagues, suppliers, partners and customers, is underpinned by a digital-first attitude, in which everything talks to everything else, and anything that can be automated is automated.
In 2016 real estate should look to leverage technology to break the constraints preventing us from building a better world.
Antony Slumbers is founders and chief executive of software developer Estates Today. Interact with him on Twitter @antonyslumbers