In 1942 Isaac Asimov proposed The Three Laws of Robotics:
- A robot may not injure a human being or, through inaction, allow a human being to come to harm.
- A robot must obey the orders given it by human beings except where such orders would conflict with the First Law.
- A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.
I would not bet the EU was taking these 3 laws into consideration while establishing a legislative framework that included the Energy Performance of Buildings Directive 2010/31/EU (EPBD) and the Energy Efficiency Directive 2012/27/EU to boost energy performance of buildings. But in real there is a strong correlation. How?
These 2 directives are the base stones to promote 3 main policies that beside others will help to achieve a highly energy efficient and decarbonised building stock by 2050. The building sector is crucial for achieving the EU’s energy and environmental goals.
At the same time, better and more energy efficient buildings improve the quality of citizens’ life while bringing additional benefits to the economy and the society. Can humans achieve these goals without help? Neither I would bet on that. And the reason can be simplified – older buildings’ stock needs total renovations with automatization and newer buildings are just inefficient because of automatization as it is too complex and too complicated for humans. Just one sample from HVAC: an automatization of a modern 25.000m² office building with 3.000 controllable mechanical components and 50.000 datapoints supports any world’s best building operator a lot but the gap between the achieved and achievable results can be huge still (over 30% even according to my personal experience)! What to do?
In 1997 Deep Blue was the first computer beating the chess world champion Garri Kasparov. Since that robots – or maybe it is better to start using a modern word – Artificial Intelligence (AI) – have had a journey of tremendous development. And 30 years later the AI was ready for the real estate market as well. One of the main reasons for that was definitely Industry 4.0. (this term was first publicly introduced in 2011).
According to University of Oxford the major technologies driving the fourth industrial revolution are: Cloud Computing, The Internet of Things, Artificial Intelligence and Machine Learning, Sensors etc. And the most important: real estate as an asset; and as an industry is not immune to the innovations made possible by the fourth industrial revolution. How well are real estate owners and managers prepared for that? Is the real estate market ready for AI?
The Global PropTech Survey 2019 prepared by KPMG pointed out that only 58% of the real estate companies had digitalization strategy and only 25% had a strategy of data processing.
Likewise, the survey of KPMG that regarded the technological trends of real estate sector pointed out the similar numbers: only 29% of the companies used data analytics and 54% even did not plan to do it.
97% of all respondents believed that the digital and technological innovation would start influence their business, but their readiness for that purpose was only 5 or less in a 10-point scale.
95% of real estate companies have someone responsible for leading digital transformation and innovation. In 62% of cases, this is a senior employee, however, in 65% of cases, it isn’t a digital or technology specialist.
To summarize these results: it is not too bad but there is a long way to go. And I truly believe that there would be remarkable changes in the results of the 2021 survey compared to 2019.
It has been said that ”Covid is the last wake-up call for the conservative real estate industry”. Probably too dramatic but this saying has a point. In a case the EU directives’ goals for 2050 seem too far, the direct pressure for higher efficiency from tenants – actual bill-payers – has grown remarkably in 2020-2021. And this makes the market totally different. Solutions are needed fast!
Fortunately these solutions exist already and develop continuously. 4 years ago nobody (?) believed that AI can operate huge HVAC systems (I am not talking about monitoring or analytics or new hardware but an ability to adjust right setpoints automatically in the existing high level infrastructure, 1000s of times per month!).
I absolutely agree that very often it is annoying to start using new technologies. And also there are different risks involved. But this is another topic about how to overcome all the bottlenecks to launch new technologies. Now I would just focus on the fear for robots… sorry – Artificial Intelligence.
There is no reason to be afraid of AI just because it is AI or something new! And directly it is not because of Asimov’s 3 laws from science fiction also. It is because of the logic! For a real AI it is not enough to follow just one rule. If we speak about real estate – it can not be efficient if ventilation is working very efficiently but more heating is needed because of that. It is easy to save even 100% of energy but all the people would escape the building because this savings would make the building dark, cold/warm, without fresh air etc.
Thus in every real AI solution many indicators are taken into consideration at the same time – energy efficiency, indoor climate comfort and wellness, technical condition etc. And the main indicator is the same still – safety. Exactly like Isaac Asimov proposed in 1942.
The writer Imre-Gustav Vellamaa is a Member of the Management Board of the PropTech company R8 Technologies.
R8 Technologies was the 1st proptech company in the EU certified by the Swiss PropTech Academy Association in 2021.