Photo by ShutterstockTORONTO—Much has been written about the impact automation will have on the global workforce, with manufacturing and related occupations expected to be heavily affected. More recent studies, such as one from Brookings Institution that came out last year, suggest that higher-wage occupations will feel the impact as well.
That includes commercial real estate.
Indeed, CRE will poised to receive a double-whammy from automation, with the technology reducing the need for space across several industries as well as remaking its own internal processes.
This is one of the findings from Avison Young’s newly-released global 2020 Forecast, which covers ten trends to know for 2020.
What Will It Look Like?
Not that our workspace will be re-imagined with robots sitting in the seat next to us. Like so many other industries, the greatest impact will be seen from robotics process automation, a type of software that automates workflows across multiple interfaces and that makes routine computer tasks much easier.
“RPA adoption is a fast-emerging trend that crosses all industries, with major real estate implications due to the cumulative effect on the type and number of jobs required across different businesses,” according to Avison Young, which points to a McKinsey Global Institute estimate that about 30% of the activities in 60% of all occupations could be automated.
Here is how automation could affect space needs, according to Avison Young: Back-office functions, which tend to be clustered in more cost-effective secondary and tertiary cities around the world, will be significantly affected. Hot-bed offshoring locations will also be substantially impacted. Less obvious is the impact on organizations, or individual jobs, where such processing is currently intertwined with more client-facing tasks.
RPA Comes for CRE
These changes will also have an internal impact on CRE. Avison Young writes that the “scope and pace of these advances should cause us to focus on the processes embedded in our industry. From research and investment decision-making to project management and building engineering, our use of technology and automation to process and manage information is in its infancy.” That’s in addition to such areas where RPA is already becoming mainstream, such as financial management, invoicing, recruitment and HR. For instance, Avison Young notes that one of the big four management consultancies already uses RPA in the onboarding of thousands of new employees each year.
Real estate, though, is still in its infancy in the use of RPA and, as Avison Young put it, there is some less glamorous blocking and tackling required first. “As an industry we need to be much better at collecting and taking back control of the data we have access to, and combining it with third party sources in order to unite the currently fragmented real estate data landscape,” it says.
Technology will help, but the first step is a change in mindset, it continued, as transparency of data about our urban environment has a long way to go. “As an industry, we don’t yet have clarity over what meaningful information we have and what other data potential strategic partners within real estate might own.”