Behind disruption lies three root causes: technology, globalisation and demographics. While these forces are not new – indeed, they have been around for centuries – how they evolve and interact will drive the waves of disruption. By understanding the interaction between these three forces, we’ve identified eight global megatrends that are shaping the future. These large, transformative trends define the present and determine the future through their impact on businesses, economies, industries, societies and individual lives.
Eight global megatrends that are shaping the future
- Empowered customer: how will you change buyers into stakeholders?
- The future of work: when machines become workers, what is the human role?
- The future of smart: what intelligence will we need to create a smart future?
- Behavioural revolution: how will individual behaviour impact our collective future?
- Urban world: in a fast changing world, can cities be built with long-term perspective?
- Health reimagined: with growing health needs, is digital the best medicine?
- Industry redefined: is every industry now your industry?
- Resourceful planet: can innovation make the planet resource rich instead of resource scarce?
EY has further explored these trends in its Global report, The Upside of Disruption.
Increasingly, companies are aware that they need to rethink the way they operate. Despite this, just a handful of companies have successfully disrupted their own business models. Netflix, for instance, switched its business model from one centred on DVD home deliveries to one built on streaming. More recently, auto giant Daimler has begun experimenting with moves into carsharing and ride-sharing. Meanwhile, hundreds, perhaps thousands, of firms – from Blockbuster to Kodak – failed to adapt in time.
Safe as houses?
While bricks and mortar can feel ‘safe’, the processes required to create a building, the business model which delivers it and the societal norms which drive it can all be disrupted. The way property is constructed, transacted, valued and invested can all change, and all can affect profitability and returns. Our research suggests that the industry may underestimate the impact of the disruptive forces starting to emerge. The difference between those businesses that thrive in the new economy, and those that risk irrelevance and unprofitability, may hinge on one deciding factor: their ability to proactively seize the opportunities unearthed in the disruptive power of these megatrends – or at the very least quickly react to such disruptions. The industry sees itself in the business of creating, selling and managing assets. But is it really?
The property industry creates the places where people live, work and play. So, what happens when technology and disruption fundamentally shift how we live our lives and therefore, the kind of spaces we need and desire? Steve Jobs famously said, “A lot of times, people don’t know what they want until you show it to them.” What happens if an Apple or a Google – a world-class disruptor with brand of such power and influence – moves into the property space? Will this redefine what consumers want?
Disrupted or disruptor?
Disruption is requiring all industries to respond to shifts that would have seemed unimaginable even a few years ago. The first, and most important, step in self-disruption involves challenging long-held assumptions about matters as fundamental as the nature of your business, customers and competitors.
Growth or innovation?
We believe innovation needs to become synonymous with growth. And this demands an approach that allows ideas to be created, tested and ‘deployed or destroyed’ at a rate that allows property companies to lead new thinking – or at least follow fast.
New technology, delivery solutions and business models should all be considered. Innovation should not be restricted to digital and technology — it should apply to all aspects of planning, delivering and operating assets. This includes funding and financing mechanisms, business processes, supplier management, community and stakeholder engagement, revenue generation and security. The role of the public sector in catalysing and supporting innovation is important and a more collaborative approach is essential.
While the potential impact and trends are many and ever-changing, we think there are a number that require the industry’s debate, interrogation and creative thinking.
Trends in property