Buildings as a platform for innovation and transformation

Last year, my colleagues and I at GreenBiz Group started asking the question, “What happens when four massive technologies — energy, information, buildings, and transportation — collide?" We dubbed the collision VERGE, and launched a global brand of conferences, events, research, and media. (The next event is November 12-13 in San Francisco.)

VERGE focuses on how data and IT create new platforms that enable radical efficiencies, breakthrough business models, and innovative products and services, and includes within its sphere a number of other megatrends: next-gen cities, intelligent buildings, connected mobility systems, big data, smart grids, the “share economy,” the "Internet of things" and more. Each of these things is enabled by technology convergence, and each stands to have a profound impact on how companies operate, how cities interact with their denizens, and how all of us live, work, travel, play, and shop.

Ultimately, VERGE is place-based — that is, it happens somewhere: a building, campus, neighborhood, city, or region. That is the focus of a report published today, written by green building pioneer and GreenBiz senior contributor Rob Watson. VERGE and the Built Environment focuses on the key trends that undergird how this technology convergence will unfold in the context of the built environment over the next few years.

The free, 34-page report can be downloaded here.

“The 20th century emphasized linear thinking and the efficiencies of assembly-line production,” writes Watson. “We got very good at understanding the parts and optimizing the components. Unfortunately, this came at the expense of sub-optimization of the larger system. By contrast, we believe the 21st century will be one of integration and non-linear systems thinking — a convergence of increasingly complementary parts in support of an optimized whole. The overall catalyst for this systems view is information and communications technologies, or ICT — the explosion of information-enabled products and services.”

Part of the story, says Watson, is that changing technology, demographics and individual preferences is leading companies to squeeze more out of the space they have, rather than squeezing out more space. Average office space per person is steadily declining and forecast to drop more than 30 percent in the next five years. “Big-box” retailers are getting smaller, especially as they move into urban cores, he says.

Technology is enabling companies to reduce or eliminate permanent space per employee. Instead, they have unassigned space that can change daily, assigned on a first-come, first-serve basis, or depending upon the need for collaborative and team activities. ICT has facilitated both the more-efficient use of space through online reservations and also the ability to work remotely.

Overall energy use for buildings should continue to decline, says Watson, but energy intensity of buildings could rise as space is more intensively utilized. “On a macro level, we expect that less floor area will be built for both living and commerce, which could result in lower overall real estate costs for companies. This will allow them to locate in denser, and more expensive, urban cores.” 

So, too, with residential, says Watson. “Living units on average already are 7 percent smaller today and much more likely to be multifamily than five years ago. The amount of occupied commercial floor space per dollar of GDP is at historic lows.”

Meanwhile, as urban environments become more livable, many corporations are reversing the suburban flight of 30 years ago. Some examples:

• United Airlines has signed one of the largest leases in Chicago history in the Willis Tower, leasing 830,000 square feet through 2028.
• Sara Lee moved out of its 60-year home in Chicago for Downer’s Grove, a suburb, in 2005. However, the company has announced that in 2013 it plans to relocate 500–650 employees back to downtown Chicago.
• Amazon.com’s new headquarters, totaling 1.7 million square feet in 11 buildings, is located on a Seattle streetcar line, providing direct access to the city’s airport.
• Zappos is scheduled to move 1,200 employees to downtown Las Vegas in 2013 from suburban Henderson. (Zappos CEO Tony Hsieh will be one of the headliners at our VERGE SF conference next month.)

In the transportation arena, says Watson, generational shifts, mobile computing, and connected vehicle systems are changing the face of vehicle ownership:

For the younger generation, this choice appears to be reinforced by the fact that in 2011 Gen Y’ers bought 30 percent fewer cars than were sold to this cohort 4 years ago, and adults in the 35-44 age range curbed their car-buying by 25 percent, while losing a large number of licensed drivers. This indicates that many younger people are eschewing the physical access from remote locations that cars gave earlier generations in favor of the access provided by virtual mobility. Public transit, car-sharing, bicycling, and walking are just a few of the preferred options for sustainable mobility among younger people.

That’s just for starters. Watson’s report also sees “walkable urban places,” building analytics and management software, collaborative consumption (a.k.a. the “share economy”), and decarbonized, smart energy systems among the manifestations of the VERGE convergence. And, along the way, is a new generation of jobs and professions that combine typical construction trade jobs with next-gen data mining, and facilities management with smart-grid management skills.

Says Watson: “We believe that the dynamic interplay between large systems can be influenced with approaches to problems that unravel multiple issues with a single solution.”

That’s a dead-on assessment of the potential we see in VERGE. The potential of how all this plays out in the built environment are many and varied — and coming soon to a neighborhood near you.