How to seize the upside of disruption

New research from EY has found that robotics, autonomous vehicles and big data may be more disruptive to the property industry than many predict – and they’ll hit hard unless companies innovate.

Will the Australian property sector seize the upside of disruption?, prepared by EY in association with the Property Council and Green Building Council of Australia, identifies a number of disruptors that will reshape the property industry.

From drones working at great heights to wearable cameras on hard hats to monitor safety, and from virtual reality walkthroughs to daily payments processed by robots, no area of the property industry will be immune.

Bricks-and-mortar property will always exist, says EY partner Selina Short, who took a lead role assessing the impact of these megatrends.

“The question is: will today’s companies exist in the era of disruption?”

“Business models will look radically different in 20 years, and we’ll have a bunch of different players in the market,” she says.

“We’ll see a lot of real estate companies branching out into activities not traditionally within their remit,” she adds, pointing to Lendlease “becoming a utility player at Barangaroo” as an example of what we can expect.

“Well also see real estate companies leveraging their data as new revenue streams.”

Tractor giant John Deere is already selling the data gleaned from its machines back to the agriculture industry, and there are obvious parallels with property, Short says.

EY’s research identified autonomous vehicles as a real area of challenge for the property industry.

“Cars are parked 95 per cent of the time, and around a third of CBDs in the United States are devoted to parking.

“When you add the productivity gains from getting people out from behind a wheel, the potential is enormous. But it means the industry needs to start thinking about alternate land use, building design and the shifts within society as a whole.”

It’s a big challenge – but it’s also a conundrum for the industry, Short says.

“Autonomous vehicles are too far away for the industry to properly prepare. You can’t build a retail centre without car parks simply because we might not need them in 15 years.

“But you can design your car parks so that they can be converted into other uses down the track.”

As for robotics, Short says “we’ve all heard about bricklaying robots, but I think the potential for back-office functions is bigger”. She says EY has been “using ourselves as guinea pigs” in a trial of robotic recruitment.

“We have bots that we’ve taught to look for ideal candidates, who can analyse CVs and look for commonalities. One bot can do the work of five full time employees with 99 per cent accuracy. And they can do it 24 hours a day.”

All of these disruptors have “big implications for people” Short says – and so they demand “strategic thinking and leadership from management”.

Seizing the upside of disruption, EY argues, requires business leaders to ask themselves some tough questions. What business are we in? Who are our customers and competitors? Who are we aligned with? And is our culture ready for innovation?

“Some of these trends will hit faster and harder than many expect,” Short concludes.

Download Will the Australian property sector seize the upside of disruption? below.