We are in the midst of a significant technological transformation. This transformation is so compelling it is being called Industry 4.0, or the fourth industrial revolution. From the first industrial revolution involving mechanization through water and steam power, to mass production through electricity in the second, the fourth industrial revolution takes what began in the third with the introduction of computers and enhances it with smart technology powered by machine learning and data.
The invention of computers during Industry 3.0 was transformative because of the introduction of an entirely new technology. As Industry 4.0 unravels, these computers become increasingly efficient at communicating with each other to make decisions without human involvement. At the core of Industry 4.0 is the Internet of Things (IoT), which is a network of physical objects, or things, fixed with sensors that collect massive amounts of data to produce insights that manufacturers and producers can then strategically act upon.
If the true power behind Industry 4.0 then is the ability to share information, how can the commercial real estate industry take advantage? According to Deloitte, more than 60 percent of CRE organizations are acquiring Internet of Things sensor data. This data could include information into tenant behavior, such as how they use different amenities; this then provides insight into how companies can create a more customized experience for their clients. For example, analyzing occupancy, movement, and temperature sensor data could be helpful for owners to make seating and space utilization decisions that promote social distancing. They can also use tenant data to forecast lease renewals and develop relevant tenant retention strategies.
In addition to forecasting, the cloud technology associated with Industry 4.0 has the capability to provide scalability, store data, and grant global access. For example, companies can utilize cloud-based tools for digital marketing as well as to virtually connect with tenants; the possibilities are tenfold.
While Industry 4.0 began about a decade ago, there has been an increased technological progression with the onset of the pandemic. For many industry leaders, the pandemic opened their eyes to the need for a digital transformation. At the same time, empathy and human connection also became more important than ever. CRE organizations that manage to balance these two factors have a considerable chance at emerging successful.