Could those working in the property sector lose their jobs because of technology and automation? James Dearsley, founder of The Digital Marketing Bureau, explores.
Having integrated technological solutions to my sales and marketing teams for nearly 15 years now, I understand how technology can benefit an organisation, and even an entire industry. However, many fear that technology is taking over, and the real estate sector will forever be hidden behind a cloak of automation, apps and artificial intelligence.
Solutions, being dreamt up by some incredibly inventive and entrepreneurial minds, are beginning to impact a sector that, it could be said, can be disrupted all the way from planning to purchase, and then perhaps the biggest ‘P’ of all: Perception.
There is a perception that real estate is a traditional industry. Whether you are in the commercial or residential sector, business is still, for the most part, done by people meeting people. Systems are often outdated; processes often archaic. The industry needs to consider its future. Usually a sector or company will drive modernisation and we have to be careful. Already our consumers are forcing the change upon us themselves.
Consider that there is currently over $11bn worth of commercial property assets still tracked, managed and analysed on Excel, despite there being some of the most amazing solutions now available. Consider that most of the reason that 30% of property deals that fall through in the residential sector are because of time delays in conveyancing; largely a manual process. Artificial intelligence and blockchain are beginning to play a part here.
Consider the time consuming process of finding an office or new home. Most people will see 15 homes before they find the right one. Even at a push, you may see three an hour spread over many weeks. That is a considerable time expense for both agent and client. Virtual reality could revolutionise this space.
Impact on jobs
Just in those few examples, you can see how technology has the power to change real estate for the better. However, while bringing the industry and its perception out of the dark ages will be powerful for the consumer, there is concern that jobs will be lost and a traditional hands-on business model will shift forever.
We have seen it all before. In the US, agriculture used to be responsible for 41% of all jobs, but now it is just 2%, thanks to technological advancement (and the changing demands of the population). In a report carried out by Deloitte and Oxford University, it was stated that 35% of all jobs in the UK are at risk of automation over the next 20 years and that there was a 68% chance that estate agency could be automated – some may welcome this, obviously.
In my opinion, we need to look further back in time, to the origins of mechanisation: the agricultural revolution. In 1733, with the invention of the Flying Shuttle, which enabled one weaver to do the job of two, machines started to impact an entire sector. We were now able to weave so fast that the spinners, who produced the yarn, often in their own homes on a single small contraption, just couldn’t produce it all quick enough. This all led to the invention of the Spinning Jenny, which meant spinners could spin up to eight spindles of thread at a time. It also meant the dwindling of jobs, as these contraptions were larger, needed fewer people to produce more, and also led to the growth of large factories.
I see huge parallels today with this period of time because, as I am seeing now, there was an ignorance to the way the industry was moving and how it was going to impact jobs. It took nearly 40 years for people to realise what was happening, and the rural community was hit hard. They lost their jobs and their livelihoods in a period of time where money was scarce anyway.
The Luddite movement was started in the 1770s and raged for decades, as factories were burned and machines broken up, as people tried to resist the change. Rather than learning how to adapt themselves, a large proportion fought, and ultimately lost.
However, and this is the really pertinent point, in the mid 1800s a term was coined: ‘The Luddite Fallacy’. Despite all the mechanisation of the sector, jobs actually rose, as the processes became more efficient, and more produce was able to be shipped.
Essentially, jobs evolved.
A collaborative approach
That is what we have to realise here. In many of my speeches I state to the audience that, by simply being there they are already preparing themselves for the next period of real estate. Bear in mind, it took 29 years for the Spinning Jenny to be created after the Flying Shuttle had simply doubled output in one area of the supply chain. I am seeing tremendous change in all areas of the property market, simultaneously.
The thing is, it needs help. The technology and property communities need to get together and collaborate more. They need to understand each other. A lot of the technology being built comes from a technological mindset, not a property one. Though I am starting to see a bit of change, much has focused on the point of sale and residential market. Why? Because this is the easier market to understand from a technologist’s point of view, as they may have had experience of that area. True innovation, and the potential rewards it will bring, are in the other areas. It is just that both sides need to appreciate that they need help.
Understanding the changes
Understand that technology is going to disrupt the market. Understand that consumers are hungry for change. Understand that our economic viability is underpinned by an efficient marketplace, and understand the real estate market is never going to be the same.
In all this understanding, however, there is a bigger piece of the puzzle that we need to remember. Sales and revenue generation are about human interaction. Now, and in the future, after all, we cannot mechanise and automate everything that we do. It is only the initial method of interaction that is changing. That is where tech is having an impact and knowing about it now and influencing its very momentum, whilst evolving alongside it, will future proof your own market position.