The LIQUID Report
In the discussions that I have with real estate investors about digital innovation, and the changes that they need to make in order to stay competitive in the future, recurrent challenges surface around the paradoxical requirements of short-term shareholder returns and longer-term innovation gain and value preservation. Through no fault of their own, most real estate investors are simply not set up to bear the risk of speculative innovation. In part, this is why the industry has been slow to innovate. However, in the long run this is not good for industry participants (due to increased disruption risk) nor for UK plc (given the contribution of the sector to the economy). So, what’s to do? A report recently commissioned by the BPF points to the role of government in catalysing activity in the sector and providing a foundation for growth. Recommendations include: the formation of a Real Estate catapult, a Minister-led digital real estate forum and a cross sector coalition approach to data standards. Whilst competition is a feature of all industries, it is sometimes better to cooperate to expand the size of the pie, or to create a defence against disrupters. This has happened in other industries where common standards have been created which increase industry efficiency (e.g. USB, 4G). I endorse the BPF’s call for greater collaboration in this space, either channelled through a benign central agency, or through an industry coalition.