Emerging Technologies Are Turning Proptech Upside Down and Inside Out

Stan Fung, Managing Director, Drum Tower Ventures

Stan Fung, Managing Director, Drum Tower Ventures

PropTech has been adopted for a while and has produced gain and efficiency for the property sector. However, most PropTech applications tend to support or enhance existing operations, but still, gear towards traditional property development models and operating environments. A few are taking advantage of emerging technology platforms and offer solutions which are unique, differentiated and take advantage of opportunities which are becoming available because of the new technology innovations. There are a few exceptions such as Airbnb - which is proven to be a ground breaking idea and created a new way of searching, renting and managing short term rental properties (and others) in a shared economy which is heretofore not easily doable without combining mobile, software, cloud computing, and social media innovations. There should be more groundbreaking ideas such as Airbnb!

There are a number of emerging developments which are destined to impact the property sectors and future PropTech development. They include Smart Cities, Smart Buildings, Smart Logistics, Autonomous Vehicles, Personal Mobility, Robotics, 5G, IoT, Big Data, AR/VR and AI/ML and its application across all aspects of the property sector and its operations. They will ignite new products, services, and business models which are heretofore unthinkable and undoable, and will continue to support future PropTech development as they mature.

However, there are a number of constraints which has prohibited their wide adoption. They include: (1) Lack of holistic view of the paradigm shift resulted from the convergence among these emerging developments and their impacts on the property sector, (2) Lack of coordination and cooperation between the technology and property sectors to fully take advantage of these emerging opportunities due to the lack of integrative expertise and experience, and (3) Emerging technology platforms are in transition which makes it difficult for end-user applications to develop at this point because of the difficulties in predicting their future directions, in implementation and in measuring ROI based on traditional measures.

Emerging technologies are turning PropTech upside down and inside out
A new way of looking at PropTech is required! CIO’s and entrepreneurs need to view the future city and property landscape from a new macro level before they deep dive into specific applications. They need to envision what future smart living, working and leisure environment will be like and how they will be supported by the underlying technology innovations which make future smart environment possible. They need to (1) imagine applications resulted from these converged technologies and what they can do together, (2) look for new businesses and business models resulting from these technological changes, particularly in the developing Blockchain Economy™ Era, and (3) innovate across industry disciplines with more diversified teams, integrative thinking and idea development.

More can be done in proptech thinking in order to build a future environment which is more holistic, inclusive and sustainable – the three pillars which we believe are the core of future human and social development

The following examples may help solidify these ideas:

For example, in the age of smart cities, smart buildings, autonomous vehicles, personal mobility movement and smart logistics, how will future commercial and residual properties, and leisure activities be configurated? What are the shape and form of future transportation networks? What kind of platforms will be needed to manage such environments? What kind of IoT devices, sensors and communication networks will be needed to support such platforms? What kind of data will be collected and from where; and how they can be analyzed, managed and used to produce predictive functions which serve human and social needs? These are the major issues which CIO’s and entrepreneurs need to think about.

For example, with emerging Blockchain platform, PropTech applications which (1) enhance information search and reduce transaction friction, (2) allow tokenization of digital and physical assets, and (3) support a heretofore unavailable incentive-driven transaction environment will allow a new wave of applications to be created for the property sector which is currently not imaginable.

The above vision is of a tall order for the nascent PropTech industry. However, it will be worth the efforts to have a more disciplined approach to capitalize on these sector development. The following are a few tactical suggestions:

1. Elevate the CIO function to the corporate level given its potential impacts on future corporate development,

2. Think integrative across industry sectors, professional disciplines and technology innovations in enhancing existing operations and in designing emerging products, services and business models,

3. Set up innovation hubs away from existing operations to foster independent thinking, to source external expertise and experience across various industry sectors, and to develop emerging ideas,

4. Work with experienced venture capital funds as a strategic investor and partner, with the intent of sourcing new ideas and developing new business and services for the organization.

We are entering an exciting period of large scale upgrade of the property sector through digitalization and adoption of emerging technologies. However, more can be done in PropTech thinking in order to build a future environment which is more holistic, inclusive and sustainable – the three pillars which we believe are the core of future human and social development.

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