Posted: 22 Jun. 2017 5 min. read

Disrupting the disruption – the effect of digital disruption on real estate, infrastructure and the construction industry

Digital disruption is something that working in property and construction we hear a lot about. According to some, robots are coming to take our jobs and soon we won’t need to learn to drive either. Without sounding sceptical, this is currently quite a far cry from the industry we work in. Property, infrastructure and construction in general is still a rather traditional industry when it comes to how we work, albeit some technology advancements.

Having attended the ‘Deloitte Global Technology Media and Telecoms prediction’ event and ‘Digital Opportunities in Property Technology’ session over this last quarter it certainly has given us food for thought on what technologies could start to impact our industry and how automation could replace more of the mundane jobs we still currently do manually. The four areas below we think are key to consider in realising continued opportunities within the real estate, infrastructure and construction industries.

  1. Internet access’. Starting with the basics that nowadays we want (or perhaps in some cases expect) instant access. This instant access essentially relies on excellent, reliable and fast internet connectivity, and is often taken for granted that it will be available as a basic need. What makes excellent internet access? Well it has to be secure, fast and accessible. Although these three features may sound like common sense to most of us, it is a lack of wider understanding in the real estate, infrastructure and construction industry of these features which is withholding a potential £92bn from the UK economy as companies are not realising their full ‘digital’ potential.  They need to invest and increase their pace of change. As the phrase goes ‘time is money’, the quicker and more efficient we are the more value we have.
  2. Blockchain is essentially an advanced encryption operating system. It can be thought of as being a bit like a Sudoku: One scenario is the blockchain software acts as an intermediary between two parties agreeing to a contract such as between an agent and a client. The software essentially fills in the Sudoku or the contract between the agent and client; the client and the agent then do the final check to see that the Sudoku is filled in correctly before proceeding. This example of blockchain is to create a more efficient way to forming deals which is highly relevant to real estate, infrastructure and the construction contracting environment and where deals are done a lot.  Deloitte Netherlands are currently building and trialling a blockchain system with the City of Rotterdam and the Cambridge Innovation Centre. It’ll be interesting to see how they get on in a years’ time to understand what benefits have been secured.
  3. The great indoors: the final frontier for digital navigation’. Sat navs have become an integral part of our driving experience and I’m sure that most of us use one in our personal and work life. However, sat navs as we know it are about to go one bigger, and head indoors. There is a massive opportunity for the real estate community to use indoor navigation as a useful tool to see how people move around a space. The first example that would spring to mind would be for retailers to see patterns in footfall across retail areas. This will eventually impact on design layouts, construction of retail areas, clustering of retailers and consequently, rental values being impacted. Deloitte have developed an analytics programme L3 (L cubed) looking at making retail location decisions using analytics, giving retailers a more informed decision when choosing a destination.
  4. IT as a service’. Deloitte predicts that by the end of 2018, spending on IT as a service will be just under $500 billion worldwide.  In simple terms this is where computers would do the job of humans using artificial intelligence (AI).  Most of us have seen physically what robots could help with i.e. car manufacturing, however AI has and continues to move increasingly towards sophisticated tasks being completed. Insight was shared on a recent AI Robot example test at the ‘Deloitte Global Technology Media and Telecoms prediction,’ where the AI Robot was asked to analyse 1,000 documents from a court case to see if it would come up with the same decision as the human judge and jury – which it did! Imagine a world where AI Robots decide on planning applications? The potential for disruptive change caused by AI Robots is interesting for the real estate, infrastructure and construction industry to consider. Businesses would do well to think about what this could mean for them, understand the threats and opportunities for their businesses now, to stand the best chance of being prepared for the future say 10-15 years away.   

Ultimately there is a huge opportunity for us in real estate, infrastructure and construction to use data more effectively and efficiently to inform our decisions, streamline the ways in which we work, produce more automated reports, allowing us all to become increasingly digitally streamlined.  Whilst some of these technologies are quite a way from being used in everyday work within our sector communities, the people working within them would do well to remain open minded, embrace the technology and be prepared to upskill to take full advantage of the digital opportunities which continue to be developed.

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Key contact

Ed Britton

Ed Britton

Associate Director

Ed is an Associate Director in the Manchester Planning team, having previously spent 10 years working in London. Ed provides planning advice to a wide range of commercial and public sector clients, with a specific focus on complex city centre strategic developments. Ed provides a full range of planning advice relating to strategy, design development, heritage, master-planning, local authority negotiations and due diligence.