The direction we're headed
Just as with any historical revolution, we won't know exactly what's in store for us. However, we do know the developments taking place and how they're likely to affect society.
These advancements concern:
- Robotics: the use of computer science and engineering to design machines that assist people.
- Artificial intelligence (AI): a computer's ability to perform tasks only people could do before.
- The Internet of Things (IoT): devices, or "things," with sensors that allow these devices to talk with each other.
- Autonomous vehicles: cars that drive themselves.
- 3D printing: the creation of a physical product from a digital design.
- Quantum computing: the use of quantum computers to solve complex problems that today's computers can't.
- Nanotechnology: new technology conducted at the nanoscale that can revolutionize existing products and services.
- Biotechnology: the use of living organisms to improve life.
- Energy storage: developments that largely apply to wind and solar.
- Materials science: an interdisciplinary field aimed at discovering new materials.
Maximizing human well-being is the utopian goal of all the new advancements that will take place during the Fourth Industrial Revolution. We will supposedly gain a better understanding of our own brains as we work with machines on a whole new level.
This view is discussed in The Fourth Industrial Revolution, a book written in 2016 by Klaus Schwab of the World Economic Forum, an organization founded in Switzerland in 1971. This organization believes in stakeholder capitalism (made more famous by Greta Thunberg), a system in which corporations serve all stakeholders -- customers, suppliers, employees, local communities, and shareholders (rather than only shareholders, as in the model made famous by Nobel Prize-winning economist Milton Friedman). Certified B Corps, such as Athleta, have adopted stakeholder capitalism as their business model.
How 4IR impacts the real estate industry
We're currently seeing some effects of 4IR regarding the future of real estate. For one, people are buying property sight unseen, using a completely virtual experience. This saves investors from needing to travel when they wish to purchase investment property.
Some real estate transactions are conducted using blockchain technology (i.e., technology that holds information) to store documents and even pay for real estate using currency such as Bitcoin.
Digital fabrication technology is perhaps the most forward-advancing development regarding the 4IR’s impact on real estate. For example, the buildings we inhabit, both for work and home, could be built via computer-aided design that uses additive manufacturing, a process (otherwise known as 3D printing) that adds layers to an object, and subtractive manufacturing, which involves removing material by cutting or machining it away.
Regarding real estate, in particular, there is already a 3D printed house on the market and with a pending offer. 3D printing is used in industrial real estate as well. Bridges have even been built using 3D technology. The first was a 26-foot long bridge installed in 2018 in the Netherlands. China also has bridges made with 3D printing technology. And the U.S. Marines in California are using 3D printing to make temporary footbridges.
Side effects of 4IR
There could come the point when individuals lose control over their own destiny with the way technological advancements are headed. One of the fears surrounding a complete upheaval of the technological aspects of society is too much government control. Indeed, Klaus Schwab and his World Economic Forum believe in a one-world type of government and a global economy. We already see abuses of government interfering with private property ownership, as demonstrated by the many lawsuits filed against the CDC for making laws surrounding what a landlord can and cannot do with their private property regarding tenants.
The potential for the freedoms we've become accustomed to as Americans might be vastly different under a one-world government. Maybe we won't own our own homes in the future. On a positive note, the cost of real estate might be much lower with technological advances in building and home construction. It's too early to tell the direction the 4IR will have in real estate as it pertains to ownership.
How real estate professionals can take advantage of the 4IR
Real estate investors should look at what's happening in the 4IR realm and use their findings to determine which companies look sustainable and might make good investments, such as a 3D real estate company building homes.
Corporate responsibility, a factor that might not have been a top priority in the past, looks as if it's becoming more important to people. So, if there's a choice between two 3D printing companies -- all things being equal regarding their financial soundness -- and one is practicing stakeholder capitalism and the other isn't, maybe you'd want to invest in the one that is, unless, of course, you're opposed to that sort of enterprise. Otherwise, it's probably a good idea to incorporate a company's social responsibility practices into your due diligence.
The Millionacres bottom line
Society will change when we enter the Fourth Industrial Revolution. But it won't change all by itself. It can be scary to think about machines telling us what to do, and if we take no control of the matter, the world might end up a frightening place. Property ownership is and always has been the way we remain free. Whichever way real estate is developed and produced, investors can help shape who owns these new types of properties in our new world.