Property futures: the need for foresight

Citation

Ratcliffe, J.S. (1999), "Property futures: the need for foresight", Property Management, Vol. 17 No. 3. https://doi.org/10.1108/pm.1999.11317caa.001

Property futures: the need for foresight

Property futures: the need for foresight

Nothing is more certain than the unpredictability of the future. Experience, moreover, demonstrates that no special forecast can be relied upon. Yet we can never escape from the ultimate dilemma that all our knowledge is about the past, whilst all our decisions are about the future. Coupled with this, all the dimensions of change ­ frequency, magnitude, complexity, rapidity and visibility ­ are happening at an ever accelerating pace. Arguably, there has hitherto been a more discernible pattern to change, but now, change seems far less sequential and sure. What is required, therefore, is not just the hindsight of so much property research, but also the foresight of the profession's leading minds that collectively could inform, influence and inspire impending decision making in the world of real estate. We have measured the past and surveyed the present, now we need the confidence to explore the future.

The foresight principle is fast becoming a familiar approach in the growing futures research movement. It has a philosophy, a framework and a methodology. In the fields of science and technology, for example, there has been something closely akin to a revolution in "futures" thinking and research over the past decade. A particular manifestation of this has been the undertaking of what are known as technology foresight exercises in a number of countries worldwide. Japan and the USA have a long tradition exceeding 40 years of such futures studies. Germany, France, the United Kingdom and The Netherlands have been doing so since the early 1990s. Austria, New Zealand and Ireland are currently conducting or completing similar Foresight projects. Typically, the technology foresight process involves the identification of various principal sectors, the formation of consultative panels for each sector comprising leading figures from the field, and the use of "scenario planning" to identify, explore and test future potential markets and prospective opportunities in a climate of risk and uncertainty. From this, robust and flexible strategic policy options are chosen, and a shared mindset among the various participants is fostered.

It scarcely needs stating in a journal such as this that the property and construction industry designs, finances, builds and manages the built infrastructure so essential to general social and economic development. Real estate, in all its forms, is embedded in the national economy of all countries ­ providing economic growth, quality of life and sense of place. All the more reason, therefore, that the property industry and its related professions should demonstrate a greater concern about and commitment towards cultivating a shared vision of the future.

The driving forces of change

If we are to get a vision of property in the future, it is first necessary to gain a vision of society in the future. This, in turn, requires an understanding of the various forces ­ cultural, demographic, economic, environmental, governmental and technological ­ that are driving change. From these, various issues and trends at differing scales can be discerned that affect the quality, quantity and location of built infrastructural needs. Globally, for example, the most significant might be seen to be:

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  Population growth in developed countries is expected to peak around 2030, and in developing countries is expected to continue thereafter, but at decreasing rates.

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  On average, moderate world economic growth is expected to continue through 2015.

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  Emphasis will increasingly be placed upon the sustainability imperatives of life-cycle economics, conservation of non-renewable resources, environmental protection and cultural heritage.

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  Society is changing from an industrial to an information one with increasing leisure, an ageing population, a larger number of smaller families and more accent on individuality.

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  Global warming, the consequent extremes in weather and rising sea levels will require safer built infrastructure.

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  Progressive urbanisation is inevitable, together with the need to develop urban systems to meet the demand of increased numbers and enhanced quality of life.

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  The mobility demands of people and goods will increase, placing greater pressure upon the associated transportation infrastructure.

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  Information and communications technology will continue to globalise the occupational, transactional, design, constructional and management functions of the property industry.

Europe, in turn, has its own characteristics. It is in the early stages of great social, political and economic change as a result of integration, enlargement, convergence and liberalisation. The most significant internal driving forces are quality, sustainability, consumer oriented markets, privatisation, partnership, best practice, harmonisation, communication, labour conditions and responsiveness to external markets. Above all, global, regional, national and even local economies are being fuelled by competition. And increasingly the paramount driving force of all industries and disciplines must be upon the capability to create, store, distribute and apply knowledge.

Key ingredients of foresight

Fundamentally, foresight is about "future proofing" strategic policy decisions. Some of the key ingredients necessary to ensure that strategic choices made now regarding the prioritisation and allocation of real estate resources are "future proofed" can, perhaps somewhat tendentiously, be summarised as follows:

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  Change the culture of real estate so that the internal and external perceptions and practices of the property industry are made more appropriate and acceptable to a world of increasing ethical accountability and greater environmental sustainability.

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  Raise public awareness of the function and value of the built infrastructure to the quality and level of national life, wealth and heritage.

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  Improve the contribution to sustainability of the construction and property investment, development and management processes, recognising that the built infrastructure represents a substantial and relatively stable environmental resource and societal asset.

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  Consider more closely how the property industry will have to relate and respond to structural and operational changes in other major sectors of the economy such as information and communications technologies, chemicals and pharmaceuticals, materials and manufacturing processes, health and life sciences, natural resources, energy, transport and logistics, and leisure and recreation.

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  Appreciate more fully the potential impact on the property market of new working practices, novel forms of retailing, and ever-transforming lifestyles.

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  Establish a focus for access and transfer of new and best practice, policy, procedures, techniques and technologies throughout the real estate process.

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  Introduce, as a corollary, a customised and integrated information technology for the property and construction industry.

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  Develop and sustain, moreover, the tradability of the knowledge-based and niche elements of real estate services across all the sectors of the market.

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  Recognise that the traditional boundaries between existing disciplines in the built environment are being challenged and blurred, so that current academic programmes and present professional models are unlikely to serve satisfactorily future client needs.

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  Encourage innovative thinking and practice in both public and private sectors of the property industry, as well as develop more effective methods of exploring future possible change in real estate markets.

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  Question why there are no truly world class research centres in the field of property in the same way that business has the Sloane, INSEAD or London Business Schools.

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  Ask if real estate would not be better placed in such schools, or if the equivalent of a property business school, drawing by secondment and attachment upon the very best minds from academe, private practice and government, might with benefit be founded.

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  Attract talented researchers to the profession, unencumbered from other distractions, and suitably rewarded for "cutting-edge" research.

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  Transform the amount of funding devoted to research so that by about 2010 a target spend of around 1 per cent of built infrastructure output could be achieved in support of property research and development.

A strategic vision

A vision of the future world of property by the professions that collectively contribute to it is called for. Imagine, for example, a decade ahead where property is perceived as a product that is user and environmentally friendly; widely adaptable and eminently flexible; highly secure and properly sustainable; well-managed and easily maintainable; as well as functionally efficient and commercially profitable. Property is generally recognised and valued as a vital component of the social and economic fabric of society. High in public esteem, it is an industry that designs and constructs beautiful buildings; mobilises and applies novel sources and types of funding; and understands and undertakes the fulfilments of ever changing occupational demands. People and organisations in 2010 are glad to buy or rent working and living space confident in the knowledge that it will essentially be worry-free in terms of health, safety, comfort, productivity, adaptability, maintenance and marketability. Real estate professionals in the new millennium have gained a reputation for creating towns and cities in which people are happy to live, work and play. Through partnership they have helped to provide attractive and affordable housing, convertible and proficient business space, convenient and convivial shopping environs and fun places to recreate and relax. School leavers and graduates of the highest calibre are eager to embark upon a prestigious, rewarding, creative and secure career path which contributes to the wellbeing of society and the enhancement of the built environment. It is also an extremely profitable industry that provides a proper margin of reinvestment for research, development and innovation. Research, as such, has matured beyond the purely quantitative foundations it laid around the turn of the century and progressed with credence into the more qualitative realms of behavioural analysis and future studies. Fresh ideas are floated and new theories constructed and tested that offer potential improvements to urban form, function, finance and futures. A rosy picture indeed.

Foresight and the future

Thus, it can be argued that the central myth of the twentieth century is that the path to human destiny is by way of scientific method and rational thought. Perhaps these have been over-valued, and a more productive path is one that requires foresight and the pursuit of wisdom. In this way, the end of one millennium and the prospect of another is not merely symbolic; it provides an opportunity to take stock and consider where we stand. Such turning points are important because they reflect two powerful aspects of our reality. One is the capacity of the human mind to range at will over time past, present and future. The other is our interconnectedness with all things past and future. It follows that the promise of the twenty-first century cannot be found solely in the products or processes of rational intelligence, in displays of technical virtuosity or in new tools or techniques. It lies in our ability to learn from the past and strike out in new directions by adopting the Foresight Principle and applying it in many different contexts.

This editorial is primarily a plea for some form of Foresight exercise for the property industry. Such a process would bring together in collaboration leading thinkers from across the built environment to identify agreed areas of strategic policy, develop a consensus on research priorities, foster a shared vision of the future they would like to achieve, and decide the critical strategic decisions that must be made now in order to attain it.

Perhaps the "Global real estate strategy: a future scenario" exercise planned by FIABCI (International Real Estate Federation ) at its London 2000 World Congress next May will point the way. Let us hope so. For, to echo Churchill's famous phrase: "The empires of the future are the empires of the mind".

John S. Ratcliffe