Industrial Revolutions 4.0 & it’s impact on Real Estate
Understanding of The Industrial Revolution (IR) from 1.0 to 4.0.
IR 1.0 (1800s) was the mechanization of the manufacturing and processing industry, utilizing water and steam power to aid workers.
IR 2.0 (beginning 20th century) saw the coming of the assembly line and electricity, making machines more portable, enabling mass production and Just-In-Time that improve quality and output.
IR 3.0 (last few decades of 20th century) then followed through the rise of automation, providing more efficient processes and manufacturing. The development of integrated systems has enabled humans to plan, schedule and track product flows throughout the factory.
IR 4.0 (21st century). Malaysia is now slowly moving past the 3rd industrial revolution and are advancing into Industry 4.0. It simply takes the automation and machinery from IR 3.0 and makes it better through smart system using data, machine learning, the Internet of Things (IoT) and Artificial Intelligence (AI). The technology has allowed even more advanced automation, to the point where factories can run well without human – a smart factory, essentially. Industry 4.0 is a “smart” industry that can operate efficiently with less human-error by being connected with superior efficiency and low wastage through Big Data, robots and cyber-physical systems.
“Malaysia is currently between the second and third industrial revolution, with the exception of its electrical and electronics, aerospace and automotive sectors that are more advanced in terms of the adoption of Industry 4.0. However, there has been a shift whereby some manufacturers are beginning to comply with Industry 4.0, which will bring in high technology, innovative and high value-added industries and a highly skilled talent pool, which will eventually lead to the economic prosperity of the country,” says Saleha Yusoff, executive director and regional head for research and consulting at Nawawi Tie Leung Property Consultants Sdn. Bhd.(19 July, 2019, Rachel Lee, The Edge)
Impact of Industry 4.0 on real estate
The new age technology, Industry 4.0 mainly engages in inter-connectivity of systems automation, machine learning and real time data. With technology set in our daily lives, the impact is all over the place including the real estate sector:
Online Property Listing and Digital Trading
Simply, digital marketplaces started off as a platform for listing whether it is for residential, commercial or retail properties. Some opined that those platforms which facilitate online trading and transactions for property listing have significantly reduced the role of brokers and physical real estate agents as such services were offered at a nominal fee instead of relatively high charges by traditional brokers/agents. However, others thought that an agent’s work should not be underestimated as good and professional agents will discuss options and offers with buyers and sellers and for such an intimate decision for sales /purchases to be made, human touch is still required.
Smart Homes and Automation
With the IoT, homes now have gadgets which can be remotely controlled via the internet or through Wi-Fi connectivity. Research reckoned that, millennial are willing to spend more on technology-ready real estate / smart home tech like smart thermostats, leak detection sensors, and home security. These techs are making houses more convenient and much more attractive to both new and future/sub-sales potential buyers – basically, future ready.
It is clear that the Fourth Industrial Revolution will have more positive impact on real estate sector and leads to good life as home-buyers can complete property purchases virtually, saving on fees and eliminates the risks involved with paper records. For the realtors, it accelerates sales closings. Important of all, all parties have access to the same information and it instills and promotes transparency.
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