Categories Narrative, Tech Industry

Humans are Underrated

One trend I actively follow is automation. In 20 years, what jobs will be done by robots? With new advancements in technology, it’s not just the routine data entry and labor jobs that are in danger anymore. Robots can now analyze emotions, perform surgical operations, even drive semi-trucks across the country. 

All these developments beg the question: is there anything robots can’t do?

In my book Chasing Excellence, which I co-wrote with Lee & Associates founder Bill Lee, I discuss this topic. I argue, as does Geoff Colvin in the below article, that this is the wrong question to ask. Instead, we should be asking, “What are the activities that we humans…will simply insist be performed by other humans, even if computers could do them?” 

We both believe: 

We can trust human leaders. CEOs, politicians, judges, we trust humans to make leadership decisions. If you are a leader in your field, your job will be safe for a long time. 
Humans can collaborate. Teamwork is vital to our society. A team of people working together not only knows how to solve a problem, but they can identify which problems are worth solving.  
Humans like interacting with other humans. This is the big one. How often do you call a customer service number only to get frustrated with the automated voice system? We like talking to humans. Period. 
 
Want to discuss what this means for you or your business? Give me a call. 

Craig

602.954.3762


Humans are underrated

By GEOFF COLVIN
 
July 23, 2015

As the Pepper robot from Softbank scurries about your home or office, it reads your emotions by your words, tone of voice, facial expressions, and body language. It then responds in all those ways; its hands and posture in particular are remarkably expressive. If you thought emotions were beyond the competencies of robots, you were right for a long time. But no more.

Maybe you believe that humans uniquely will always have to perform the highest-stakes, most delicate and demanding tasks in our lives, such as surgery. But researchers at the University of California at Berkeley are training a robot to identify and cut away cancerous tissue—not like today’s surgical robots, which are actually tools used by human surgeons, but entirely on its own.

Or perhaps you figure technology, for all its wonders, is just nibbling away at the edges of human employment. There aren’t that many surgeons, after all. But in May, Daimler began testing the first self-driving semitruck on the roads of Nevada. The No. 1 job among American men, held by 2.9 million of them, is truck driver. Not that women are safe. Technology will continue to devour clerical and office tasks, and the No. 1 job among U.S. women, held for now by 3 million of them, is administrative assistant.

The greatest anxiety troubling workers today is embodied in a simple question: How will we humans add value? Popular culture is obsessed by it. Humans, a new series on the AMC network, spins a story from the promise and perils of eerily humanoid robots called synths. That seems to be Hollywood’s 2015 theme of the year. Think of Ex Machina (humanoid robot outsmarts people, kills a man, enters society as a person) or Terminator Genisys (Arnold Schwarzenegger’s humanoid robot must again save the world) or Avengers: Age of Ultron (humanoid robot tries to eradicate humanity) or Chappie (bad guys try to destroy humanoid robot police officer who is reprogrammed to think and feel). The big idea is always the same: For good or ill, machines become just like people—only better.


We humans have good reason to be uneasy. Strange things are happening in the economy. Ever fewer men of prime working age—the group that historically has been the most thoroughly employed—are working (see chart), and while several factors are feeding the trend, most economists believe that advancing technology is one of them. In factories and offices, on construction sites and behind counters, technology keeps doing more jobs better than people.



Why are so many men not working?
The share of U.S. men in their prime working years who aren’t employed has risen sharply since 1980, through recessions and expansions—a dramatic and unprecedented long-term shift in employment. Many economists believe that technological unemployment is an important factor in the trend, suggesting it’s unlikely to turn around soon.St. Louis Fed from OECD Data


Fear of technological unemployment is as old as technology, and it has always been unfounded. Over time and across economies, technology has multiplied jobs and raised living standards more spectacularly than any other force in history, by far. But now growing numbers of economists and technologists wonder if just maybe that trend has run its course. That’s why former Treasury Secretary Lawrence H. Summers says these issues will be “the defining economic feature of our era.”

How will we humans add value? There is an answer, but so far we’ve mostly been looking for it in the wrong way. The conventional approach has been to ask what kind of work a computer will never be able to do. While it seems like common sense that the skills computers can’t acquire will be valuable, the lesson of history is that it’s dangerous to claim that there are any skills computers cannot eventually acquire. The trail of embarrassing predictions goes way back. Early researchers in computer translation of languages were highly pessimistic that the field could ever progress beyond its nearly useless state as of the mid-1960s; now Google translates written language for free, better all the time thanks to feedback from human users, and Skype translates spoken language in real time, for free. Hubert Dreyfus of MIT, in a 1972 book called What Computers Can’t Do, saw little hope that computers could make significant further progress in playing chess beyond the mediocre level then achieved, but IBM’s (IBM, -0.62%) Deep Blue beat world champion Garry Kasparov in 1997. Economists Frank Levy and Richard J. Murnane, in an excellent 2004 book called The New Division of Labor, explained how driving a vehicle requires such complex split-second judgments that it would be extremely difficult for a computer ever to handle the job; Google (GOOG, -1.49%)introduced its autonomous car six years later. Harvard psychologist Steven Pinker observed in 2007 that “assessing the layout of the world and guiding a body through it are staggeringly complex engineering tasks, as we see by the absence of dishwashers that can empty themselves or vacuum cleaners that can climb stairs.” Yet iRobot soon thereafter was making vacuum cleaners and floor scrubbers that find their way around the house without harming furniture, pets, or children, and was also making other robots that climb stairs; it could obviously make machines that do both if it believed demand were sufficient. And the Armar IIIa robot, developed at Karlsruhe Institute of Technology in Germany, can unload (and load) the dishwasher.

The pattern is clear. Extremely smart people note the overwhelming complexity of various tasks, including some, like driving a car, that people handle almost effortlessly, and conclude that computers will find mastering them terribly tough. Yet over and over it’s just a matter of time until the feat is accomplished, often less time than anyone expects. We just can’t get our heads around the notion of computer processing power doubling every two years. At that rate, infotech power increases by a factor of a million in 40 years. The computing visionary Bill Joy likes to point out that jet travel is faster than walking by a factor of 100, and that changed the world. Nothing in our experience prepares us to grasp a factor of a million. At the same time, increasingly sophisticated algorithms let computers handle complex tasks using less computing power. So year after year we reliably commit the same blunder of underestimating what machines will do.


Yes, figuring out what computers will never do is an exceedingly perilous route to determining how humans can remain valuable. A better strategy is to ask, What are the activities that we humans, driven by our deepest nature or by the realities of daily life, will simply insist be performed by other humans, even if computers could do them?

Humans will remain in charge

A large category of those activities comprises roles for which we demand that a specific person or persons be accountable. A useful example is making decisions in courts of law, which we will require that human judges render for quite a long time to come. It’s an example in which the human vs. computer question is not hypothetical. Parole decisions are made by judges in some countries, such as Israel, where researchers investigated how those decisions are influenced by the critical human issue of lunch. Over the course of a day, the judges approve about 35% of prisoners’ applications for parole. But the approval rate declines steadily in the two hours before lunch, almost to zero just before the lunch break. Immediately after lunch, it spikes to 65% and then again declines steadily. If you’re a prisoner, the number of years you spend behind bars could be affected significantly by whether your parole application happens to be the last one on the judge’s stack before lunch or the first one after. Data-driven algorithms have proved superior to human judges and juries in predicting recidivism, and it’s virtually certain that computer analysis could judge parole applications more effectively, and certainly less capriciously, than human judges do. Yet how would you rate the chances of that job getting reassigned from judges to machines? The issue isn’t computer abilities; it’s the social necessity that individuals be accountable for important decisions. Similarly, it seems a safe bet that those in other accountability roles—CEOs, generals, government leaders at every level—will remain in those roles for the same reason.

Humans must work together to set collective goals

In addition, humans rather than computers will have to solve some problems for purely practical reasons. It isn’t because computers couldn’t eventually solve them. It’s because in real life, and especially in organizational life, we keep changing our conception of what the problem is and what our goals are. Those are issues that people must work out for themselves, and, critically, they must do it in groups. Partly that’s because organizations include many constituencies that must be represented in problem solving, and partly it’s because groups can solve problems far better than any individual can.

Only humans can satisfy deep interpersonal needs

A more important category of people-only work comprises the tasks that we must do with or for other humans, not machines, simply because our most essential human nature demands it, for reasons too deep even to be articulated. We are social beings, hardwired from our evolutionary past to equate personal relationships with survival. We want to work with other people in solving problems, tell them stories and hear stories from them, create new ideas with them, because if we didn’t do those things on the savanna 100,000 years ago, we died. The evidence is clear that the most effective groups are those whose members most strongly possess the most essentially, deeply human abilities—empathy above all, social sensitivity, storytelling, collaborating, solving problems together, building relationships. We developed these abilities of interaction with other people, not machines, not even emotion-sensing, emotion-expressing machines. We may enjoy the Pepper robot, but we didn’t evolve to interact with it.

A U.S. Army officer meets with local elders in Afghanistan. The U.S. military has realized that its most important work is now conducted in                    “the human domain”; it’s ahead of most other institutions in training skills of personal interaction.
A U.S. Army officer meets with local elders in Afghanistan. The U.S. military has realized that its most important work is now conducted in “the human domain”; it’s ahead of most other institutions in training skills of personal interaction.ROBERT NICKELSBERG—GETTY IMAGES

We want to follow human leaders, even if a computer could say all the right words, which is not an implausible prospect. We want to hear our diagnosis from a doctor, even if a computer supplied it, because we want to talk to the doctor about it—perhaps just to talk and know we’re being heard by a human being. We want to negotiate important agreements with a person, hearing every quaver in his voice, noting when he crosses his arms, looking into his eyes.

To look into someone’s eyes—that turns out to be, metaphorically and quite often literally, the key to high-value work in the coming economy.


It isn’t just theory. Changes in the nature of work of exactly this type are happening on a significant scale. Ask employers which skills they’ll need most in the next five to 10 years, as the Oxford Economics research firm did, and the answers that come back do not include business acumen, analysis, or P&L management—left-brain thinking skills that computers handle well. Instead, employers’ top priorities include relationship building, teaming, co-creativity, brainstorming, cultural sensitivity, and ability to manage diverse employees—right-brain skills of social interaction. Those responses fit well with big-picture data on how Americans work today vs. how they worked in the 1970s. The biggest increases by far have been in education and health services, which have more than doubled as a percentage of total jobs; professional and business services, up about 80%; and leisure and hospitality, up about 50%. The overall trend is a giant employment increase in industries based on personal interaction. That’s why Oracle group vice president Meg Bear says, “Empathy is the critical 21st-century skill.”

Other research supports that impression. The McKinsey Global Institute found that from 2001 to 2009, transaction jobs (bank teller, checkout clerk) decreased by 700,000 in the U.S., and production jobs decreased by 2.7 million. But jobs of human interaction—doctors and teachers, for example—increased by 4.8 million. All those trends have continued. The institute reported that interaction jobs have become “the fastest-growing category of employment in advanced economies.”

No one should be surprised. Harvard professor William H. Bossert, a legendary figure at the school with wide-ranging interests in math and biology, taught a pioneering computer science course for undergraduates in the early 1970s, the first such course ever offered at Harvard. He devoted his final lecture to the future of computing and its likely effects. Intel had just produced its first chip, and people were worried about computers eliminating jobs. Bossert’s emphatic response was that computers would indeed eliminate jobs, and we should be grateful because we could then focus on the essence of being human, doing what we were meant to do. That observation led him to a memorable conclusion: “If you’re afraid that you might be replaced by a computer, then you probably can be—and should be.”

It has taken a while, but the large-scale takeover of many thinking tasks by computers, leaving people with the deeply human tasks of social interaction, is becoming a broad phenomenon.

Since the dawn of the Industrial Revolution—the machine age—much human success has derived from our being machine-like. For decades, most of the physical work in factories and the mental work in offices were repetitive and routine. They were designed to be that way; that’s why Henry Ford complained, “Why is it every time I ask for a pair of hands, they come with a brain attached?” It was the kind of work for machines to do, only the machines of the era couldn’t do it. The machines improved, slowly at first, then rapidly, driven by the ever-quickening advance of infotech. Now they can actually do most of the machine work of our world.

As a result, the meaning of great performance has changed. It used to be that you had to be good at being machine-like. Now, increasingly, you have to be good at being a person. Great performance requires us to be intensely human beings.

To put it another way: Being a great performer is becoming less about what you know and more about what you’re like.


The emerging picture of the future casts conventional career advice in a new light, especially the nonstop urging that students study coding and STEM subjects—science, technology, engineering, math. It has been excellent advice for quite a while; eight of the 10 highest-paying college majors are in engineering, and those skills will remain critically important. But important isn’t the same as high-value or well-paid. As infotech continues its advance into higher skills, value will continue to move elsewhere. Engineers will stay in demand, it’s safe to say, but tomorrow’s most valuable engineers will not be geniuses in cubicles; rather they’ll be those who can build relationships, brainstorm, collaborate, and lead.



As demand for empathy grows, supply shrinks
Researchers analyzed 72 studies that measured empathy in about 14,000 college students since 1979 and found a broad decline over time. Their empathy seems unlikely to increase; separate research suggests this quality declines with age.Sarah Konrath, Edward H. O’Brien, and Courtney Hsing, “Changes in Dispositional Empathy in American College Students Over Time: A Meta-Analysis,” Personality and Social Psychology Review (2010)


As a changing economy revalues human skills, it seems logical to see the trend as the latest step in a long progression: For centuries people have improved their living standards by mastering new skills that a new economy rewards. But the skills that are becoming most valuable now, the skills of deeply human interaction, are not like those other skills. Learning to be more socially sensitive is not like learning algebra or how to operate a lathe or how to make a well-functioning blog in WordPress. That means that some people will have a much easier time adapting than others will.

On average, women are better at many of these increasingly valuable skills than men are. Overall, they reliably score higher on tests of empathy and social sensitivity than men do. Since research shows that the best-performing groups tend to be those whose members are best at those skills, it follows that groups with a higher proportion of women tend to do better. In fact, some research shows that groups consisting entirely of women are more effective than groups that include even one man.

That doesn’t mean that men are doomed to irrelevance. Within genders are enormous differences in the interpersonal abilities that people bring to adulthood, even before any training they may receive, which for most people is little or none. Everyone can get better, but it will be hard for some people, and some simply won’t want to do it. It isn’t about what they know. It’s just the way they are.

Southwest Airlines (LUV, -2.33%) once hired a high-level employee for its information technology operations and quickly began to suspect it had made a mistake. After he’d been on the job for only a week or so, the company’s HR chief asked him how things were going.

“People here are strange,” he replied. “They want to talk to me in the hallway! They ask how my day has been, and they really want to know! And I just want to go back to my cube and work.”

An IT guy who wants to be left alone in his cube is not exactly a surprise. It’s practically a stereotype. But it was a big problem at Southwest.

This company succeeds in one of the world’s most miserable industries. It prospers because, as its managers have always understood, it knows the value of human interaction externally and internally. The ability of employees to engage customers with humor, energy, and generosity is crucial to creating value in an experience that is not, on its face, all that appealing. For employees who work strictly with one another behind the scenes, the business is as grindingly competitive as it is for any other airline, and doing the job is not a walk in the park. Co-workers who ask about each other and like to tell a joke are key to keeping everyone going.

So an employee who’s uninterested in human interaction is trouble. His immediate depressive effect on those around him, bad enough by itself, could start to spread. Even if it doesn’t, it’s a problem. The company’s culture is a big reason, maybe the main reason, that so many people want to work there. It’s why, when the company has 3,000 jobs to fill, it gets 100,000 applications. If a newly hired young person comes to work on his first day and meets this guy, he’ll conclude that the Southwest culture isn’t at all what he had thought. He’ll be unhappy, possibly resentful, and he’ll spread the word.

So Southwest’s managers decided that their new IT guy, despite his excellent credentials, had to go. He was dismissed in short order.

For people like him, life will be increasingly difficult. Organizations used to have places for them, in solid middle-class jobs in offices and factories. But those are the jobs that technology is already taking over rapidly. As the shift in valuable skills continues, organizations are finding not only that they have no jobs for the disengaged and socially inept, but also that such people are toxic to the enterprise and must be removed.

The Cleveland Clinic learned a similar lesson. Over the past five years it has developed a pathbreaking and dramatically effective program to train all employees and contractors in empathy and relationship building. The clinic found that a few of its people were in the wrong business. “Off-board people who don’t belong,” concluded Dr. James Merlino, who led the transformation effort. “One disengaged employee who does not support the organization or the mission can have negative consequences for an entire department. The hardworking and engaged employees will resent these people being around.” When the human experience is what counts most, one wrong human is one more than you can afford.

High-value skills: Medical researchers conducting clinical trials of an Ebola vaccine in Sierra Leone (above) confer after interviewing community                    leaders about cultural issues that could affect the trials; without deep cultural knowledge, obtained in person, the trials might not succeed.
High-value skills: Medical researchers conducting clinical trials of an Ebola vaccine in Sierra Leone (above) confer after interviewing community leaders about cultural issues that could affect the trials; without deep cultural knowledge, obtained in person, the trials might not succeed.The current transformation of how people create value is historically quite sudden. Most people’s essential skills remained largely the same from the emergence of agriculture 12,000 years ago to the dawn of the Industrial Revolution in the mid-18th century. The transition to an industrial economy in the Western nations, and the accompanying shift in skill values, took well over 100 years. The subsequent turn to a knowledge-based economy took most of the 20th century. Now, as technology gallops ahead with longer strides every year, the transition to the newly valuable skills of empathizing, collaborating, creating, leading, and building relationships is happening faster than corporations, governments, education systems, or most human psyches can keep up with. That’s disorienting, and it gets more so as the fundamental nature of value shifts from what you know to what you’re like.

As economies have evolved over the centuries, we’ve always looked outward to get the new skills we require, to elders, schools, trainers, and employers that knew and could teach us what we needed to know. Now, for the first time, we must also look inward. That’s where we find the elements of the skills we need next. Developing those abilities will not be easy or comfortable for some, and it is likely to get harder for everyone, because as the abilities become more valuable, standards will rise. Even those who are good at them will have to get better.

If the prospect sounds worrying, it shouldn’t. On the contrary, it’s wonderful news. Just think of what we’re being asked to do—to become more essentially human, to be the creatures we once were and were always meant to be. Odd as it may sound, that’s a significant change from what we’re used to. For the past 10 generations in the developed world, and shorter but still substantial periods in many emerging economies, most people have succeeded by learning to do machine work better than machines could do it. Now that era is ending. Machines are increasingly doing such work better than we ever could. We face at least the opportunity to create new and better lives.

Staking our futures to our profoundest human traits may feel strange and risky. Fear not. When you change perspectives and look inward rather than outward, you’ll find that what you need next has been there all along. It has been there forever.

In the deepest possible sense, you’ve already got what it takes. Make of it what you will.

Categories Narrative, Tech Industry

The Digitalization of Everything

Technology is changing everything, from the way we eat and drive, to how we communicate and work. The “digitalization of everything” is changing how we work and therefore the skills we need to do our work.  Brookings produced a study in late 2017 that is highlighted below and here is a link to the full study. 

Here are a few takeaways:

  1. Necessary Skills – Digital skills are becoming a requirement for getting a job, almost on the same level as a degree or any other standard qualification. You don’t need to be an expert coder (yet), but for most jobs, being proficient in excel is a necessity.
  2. Wages – High-level digital jobs wages have gone up, and the mean salary sits just under $73,000/year.  These will continue to rise.  One interesting finding is that low-level digital jobs have seen a decrease in wages down to $30,393/year. Why?
  3. Automation – Robots are taking the tasks typically performed by employees. For those entering the digital workforce, or trying to move within the workforce, developing some quality digital skills is the one way to ensure job security and stay one step ahead of automation. 

What is certain is the ability to start a career in an industry and stay there for three decades (like I have in brokerage) will be increasingly hard to do.  Today, continuing to grow, learn new skills, and be comfortable being uncomfortable are all critical for your future.

 

602.954.3762


Nearly every job is becoming more digital — Brookings study
Not everybody needs to go to a coding boot camp but they probably do need to know Excel”


November 15, 2017
unnamed-1 9.24.21 AM
The shares of U.S. jobs that require substantial digital knowledge rose rapidly between 2002 and 2016 — mostly due to large changes in the digital content of existing occupations. (source: Brookings analysis of O*Net, OES, and Moody’s data)

Digital technology is disrupting the American workforce, but in vastly uneven ways, according to a new analysis of 545 occupations in a report published today by the Brookings Metropolitan Policy Program.

The report, “Digitalization and the American workforce,” provides a detailed analysis of changes since 2001 in the digital content of 545 occupations that represent 90 percent of the workforce in all industries. It suggests that acquiring digital skills is now a prerequisite for economic success for American workers, industries, and metropolitan areas.

In recent decades, the diffusion of digital technology into nearly every business and workplace, also known as “digitalization,” has been remaking the U.S. economy and the world of work. The “digitalization of everything” has increased the potential of individuals, firms, and society, but has also contributed to troublesome impacts and inequalities, such as worker pay disparities across many demographics, and the divergence of metropolitan economic outcomes.

unnamed-2 9.24.21 AM

Mean digital scores and share of jobs in high digital skill occupations in 100 largest U.S. metro areas, 2016 (source: Brookings analysis of O*Net, OES, and Moody’s data)

While the digital content of virtually all jobs has been increasing (the average digital score across all occupations rose 57 percent from 2002 to 2016), occupations in the middle and lower end of the digital skill spectrum have increased digital scores most dramatically. Workers, industries, and metropolitan areas benefit from increased digital skills via enhanced wage growth, higher productivity and pay, and reduced risk with automation.

The report offers recommendations for improving digital education and training while mitigating its potentially harmful effects, such as worker pay disparities and the divergence of metropolitan area economic outcomes.

“We definitely need more coders and high-end IT professionals, but it’s just as important that many more people learn the basic tech skills that are needed in virtually every job,” said Mark Muro, a senior fellow at Brookings and the report’s senior author. “Not everybody needs to go to a coding boot camp but they probably do need to know Excel and basic office productivity software and enterprise platforms.”

Key findings of the report

unnamed
(credit: Brookings Metropolitan Policy Program)

WagesThe mean annual wage for workers in high-level digital occupations reached $72,896 in 2016 — a 0.8 percent annual wage growth since 2010, whereas workers in middle-level digital jobs earned $ 48,274 on average (0.3 percent annual wage growth since 2010), and workers in low-level digital occupations earned $30,393 on average (0.2 percent annual wage decline since 2010).

Uneven job growth: While job growth has been rapid in high and low digital level occupations, middle digital occupations (that can be more readily automated), such as office-administrative and education jobs, have seen much slower job growth.

AutomationNearly 60 percent of tasks performed in low-digital occupations appear susceptible to automation, compared to only around 30 percent of tasks in highly digital occupations.

Gender: Women, with slightly higher aggregate digital scores (48) than men (45), represent about three quarters of the workforce in many of the largest medium-digital occupational groups, such as health care, office administration, and education. But men continue to dominate the highest-level digital occupations, as well as lower digital occupations such as transportation, construction, natural resources, and building and grounds occupations.

Race/ethnicity: Whites and Asians remain over-represented in high-level digital occupations such as engineering, management and math professions; blacks are over-represented in medium-digital occupations such as office and administrative support, community and social service, as well as low-level digital jobs; and Hispanics are significantly underrepresented in high-level digital technical, business and finance occupational groups.

Regional disparities: The most digitalized metros include Washington, Seattle, San Francisco and Boston; fast followers such as Austin and Denver; and university towns such as Madison and Raleigh. Locations with low digital scores include Las Vegas and several metros in California , including Riverside, Fresno, Stockton and Bakersfield.

Categories Narrative, Tech Industry

Amazon Headquarters Selection Process

Over the past few months, Amazon has been very public about their search for a second headquarters. (They have looked at 238 different cities.)  I wanted to share a bit of this process and what it might mean to the economic development communities across the country. 

The Amazon announcement will play out over the next year, but the process is what interests me. Below is the summary page of a great whitepaper on the site selection.  (Read the full report here: “Amazon HQ2: A Reset Button for Site Selection.“)
 
At the same time, Apple is looking for a similar requirement.  Bet you didn’t know that.  Why? Because they are doing their search completely different than Amazon. They are looking at a short list and doing it very confidentially.  I’ve linked to two articles to find out why and how:  article 1 and article 2.
 
I have not had the opportunity to represent either firm, but we have been blessed to work with other corporate headquarters relocations and have dealt with state and city government and economic development incentive packages.  Here are some takeaways from my experiences:
 
–The economic development process is getting disrupted in numerous ways.  Traditional business is changing, new types of companies and the type of employees they hire are miles from what we have seen over the last two decades.  

–The only answer is workforce.  The only question is:  where can I hire the employees I need to grow my business?  If you can’t answer this question, your community will not grow.

–Individual companies will decide how they want the search to proceed.  New companies can dictate how they want their process to unfold as cities and states now understand the value of a vibrant growing community.

–Hiring a local advisor is paramount.  Neither the market nor the requirement matter; each company needs a local advisor to work with them on the nuances and specific issues for each market AND submarket in the finalist cities they are pursuing. 

We know the ins and outs of Metro Phoenix and its submarkets. We’ve been working in them for over 25 years. If you need a local advisor to help with your company’s relocation, big or small, call me.

Craig
602.954.3762
ccoppola@leearizona.com 


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Categories Architecture, Creative Office Spaces, Design, Narrative, Tech Industry

How Tech Office Space Sets the Bar for Everyone Else

What would you do if you had an unlimited budget to improve your company’s next office renovation?  Below is a great article detailing what some tech giants are doing to their interior design to keep their employees happy, productive and in the office. 
 
One simple takeaway is that these companies are doing THE most innovative and comprehensive buildout you can possibly build.  AND they are applying everything in the real world.  We find that our clients, regardless of industry, are watching and observing all these changes and then incorporating as many of their favorite features as they can afford into their own space.
 
Contact me if you would like to see some examples in Phoenix or across the US.

Andrew
602.954.3769
acheney@leearizona.com


 

Technology firms and the office of the future
Their eccentric buildings offer clues about how people will work


April 29th 2017
 

FROM the 62nd floor of Salesforce Tower, 920 feet above the ground, San Francisco’s monuments look piddling. The Bay Bridge, Coit Tower and Palace of Fine Arts are dwarfed by the steel-and-glass headquarters that will house the software company when it is completed later this year. Subtle it is not. Salesforce plans to put on a light show every night; its new building will be visible from up to 30 miles away.

It is not the only technology company erecting a shrine to itself. Apple’s employees have just begun moving into their new headquarters in Cupertino, some 70 kilometres away, which was conceived by the firm’s late founder, Steve Jobs. The four-story, circular building looks like the dial of an iPod (or a doughnut) and is the same size as the Pentagon. At a price tag of around $5bn, it will be the most expensive corporate headquarters ever constructed. Apple applied all its product perfectionism to it: the guidelines for the wood used inside it reportedly ran to 30 pages.

Throughout San Francisco and Silicon Valley, cash-rich technology firms have built or are erecting bold, futuristic headquarters that convey their brands to employees and customers. Another example is Uber, a ride-hailing company, which is hoping to recast its reputation for secrecy and rugged competitiveness by designing an entirely see-through head office. It is expected to have some interior areas, as well as a park, that will be open to the public.

The exteriors of the new buildings will attract most attention, but it is their interiors that should be watched more closely. The very newest buildings, such as Apple’s, are mostly still under wraps, but they are expected to be highly innovative in their internal layout. Some of that is because of fierce competition within the tech industry for the best engineering and other talent: firms are particularly keen to come up with attractive, productive environments. But these new office spaces will also signal how work is likely to evolve. Technology companies have already changed the way people behave in offices beyond their own industry, as a result of e-mail, online search and collaboration tools such as Slack. They are doing the same for physical spaces.

The big idea championed by the industry is the concept of working in various spaces around an office rather than at a fixed workstation. Other industries have experimented with “activity-based working”, but tech is ahead. Employees may still have an assigned desk but they are not expected to be there, and they routinely go to different places to do various tasks. There are “libraries” where they can work quietly, as well as coffee shops, cafés and outdoor spaces for meetings and phone calls. The top two floors of Salesforce Tower, for example, will be used not as corner offices for executives but as an airy lounge for employees, where they can work communally and gaze out at the views over a latté.

A fluid working environment is meant to allow for more chance encounters, which could spur new ideas and spark unexpected collaborations. Facebook’s central building is the world’s largest open-plan office, designed to encourage employees to bump into one another in its common spaces and in a nine-acre rooftop garden. Communal areas are meant to be casual and alluring. John Schoettler, head of real estate at Amazon, says he aims to make them into “living-room-like spaces”. For offices to feel like home, it helps to hire a designer with expertise in residential real-estate, says Elizabeth Pinkham of Salesforce. In common areas at the firm’s offices, there are TVs, couches and bookshelves. Framed photos of a few employees add to the effect.

The new “working at home”

For those who scoff at the creative benefits of being surrounded by pictures of Colin from accounts, there are more tangible payoffs. The lack of fixed workstations shrinks the amount of expensive real estate given to employees without leaving them feeling too squeezed. Tech firms devote around 14 square metres to each employee, around a quarter less than other industries, according to Randy Howder at Gensler, a design firm. Young workers are thought to be more productive in these varied environments, which are reminiscent of the way people study and live at university. One drawback, however, is that finding colleagues can be difficult. Employees need to locate each other through text messages and messaging apps.

Collaborative spaces can also expose generational tensions, says Louise Mozingo, an architecture professor at the University of California, Berkeley. Tech firms’ elderly employees (otherwise known as the over-40s) can struggle to adjust to moving around during the day and to the frequent disruptions that come from large, open-plan offices. Many of Facebook’s employees do not like their office because it is noisy, and some Apple employees are hesitant to move into their new building for the same reason. Plenty also balk at the massive distances they will need to walk.

That may not be the only thing to cause employees concern. Tech firms are increasingly keen to use their own products in their headquarters. Jensen Huang, the chief executive of Nvidia, a chipmaking firm whose graphics processing units are widely used in artificial-intelligence programmes, says his firm plans to introduce facial recognition for entry into its new headquarters, due to open later this year.

Nvidia will also install cameras to recognise what food people are taking from the cafeteria and charge them accordingly, eliminating the need for a queue and cashier. A self-driving shuttle will eventually zip between its various buildings. And Nvidia’s own AI will monitor when employees arrive and leave, with the ostensible aim of adjusting the building’s heating and cooling systems.

The data that firms can collect on their employees’ whereabouts and activities are bound to become ever more detailed. Another way of keeping tabs on people is through company-issued mobile phones. “Every employee has their own tracking device,” observes Mr Howder at Gensler. “Technology firms will sooner or later take advantage of that.”

Few of them are willing to share details of their future plans because of concerns about employees’ privacy. However, some of their contractors signal what sort of innovations may be in the pipeline. Office-furniture makers, for example, are experimenting with putting sensors in desks and chairs, so that firms will be better able to monitor when workers are there.

Such data could be anonymised to allay privacy concerns. They could also save electricity or help people find an empty room to hold a meeting. But it is not hard to imagine how such data could create a culture of surveillance, where employees feel constantly monitored. “Technology firms could be an indicator of what will happen with privacy in offices more generally,” says David Benjamin of Autodesk, a company that sells software to architects, among other clients.

Silent discos and Bedouin tents

A less controversial trend is for unusual office interiors. These can distinguish companies in the minds of their employees, act as a recruiting tool and also give staff a reason to come into the office rather than work from home. For companies that do not ship a physical product, such offices can serve as important daily reminders of culture and purpose.

Last year LinkedIn, a professional social network, for example, opened a new building in San Francisco that is full of space set aside for networking, and that includes a “silent disco”, where people can dance to music with headphones on. Instead of offering generic meeting rooms with portentous names, Airbnb, a tech firm that lets people rent out their homes, has designed each of its meeting spaces after one of its rental listings, such as a Bedouin tent from Morocco. It also has a meeting room (pictured above) that is an exact replica of the rental apartment where the founders lived when they came up with the idea for Airbnb. Every detail, including the statue of Jesus in red velvet on top of the fireplace, is accurate, says Joe Gebbia, one of the company’s founders.

Nvidia is obsessed with triangles, the basic element of computer graphics used to create lifelike scenes in video games and movies. Its new headquarters, which cost $370m, is shaped like one (see picture), and its interior is full of them. Everything, from the skylights to the benches in the lobby, is triangular. “At this point I’m kind of over the triangle shape, because we took that theme and beat it to death,” admits John O’Brien, the company’s head of real estate, who pointedly vetoed a colleague’s recent suggestion to offer triangle-shaped water bottles in the cafeteria.

Such workspaces remind staff that they are choosing not just an employer but a way of life. In the tech bubble of the late 1990s companies disrupted the workplace by offering foosball tables, nap pods, blow-up castles and free lunches. Now the emphasis is on amenities that help employees save time. Larger firms, including Facebook, Alphabet and LinkedIn, offer their staff something akin to the services used by the extremely wealthy, helping employees to find places to live, adopt pets and the like. Some large tech groups offer on-site health care.

The effect of all this is that the typical office at a technology firm is becoming a prosperous, self-contained village. Employees have fewer reasons than ever to leave. With the spare cash they can throw at their employees, tech giants have vastly raised the bar for other kinds of company, which also want to recruit clever engineers and techies for their projects.

Other industries would be wise to take time to watch how tech firms are structuring their work environments. There is certainly a chance of a backlash against those that use their products to watch employees too closely. Workers may like free lunches and other perks associated with the tech business, but probably not enough to surrender their privacy entirely.

 

Categories Narrative, Tech Industry

Getting Disrupted

In this narrative I talk about disruption quite a bit.  My own industry, brokerage, is in the bullseye of all tech companies.  Below is a Forbes article discussing how technology will do 90% of my job within a decade. Scary, right?

Here are some highlights of this work:

– Automation may be capable of taking over various disciplines within commercial real estate brokerage including surveys, data collection, lease preparation, market monitoring, etc.

– The most repetitive and simple tasks could be delegated to automation, such as rent collection and monitoring market conditions.

– One area not progressing that far yet is Interpersonal skills. Humans are still superior in this area, so far.

Our team eagerly anticipates all of these changes.  We see automation and technology as adding more value to our REAL service — representing tenants in negotiating their leases.  While the process will continue to get streamlined, the value we bring has never been about touring options, or sending out proposals.  Rather it’s about understanding our client’s business, developing a trusted relationship and negotiating the best terms. As you read below, you’ll notice none of these are on the automation list.

If you want a trusted advisor, backed by the best team in the industry, that’s us. Give me a call.

 

Craig

602.954.3762
ccoppola@leearizona.com


 

Commercial Real Estate Brokers And Appraisers: Technology Will Do 90% Of Your Job In A Decade

By: Mike Phillips

August 23, 2017

 

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The real estate industry is covering its eyes and ears, humming loudly and pretending it is not listening. But a new report says that in a decade, up to 90% of the core tasks undertaken by people in real estate service firms could be done by technology.
The report, The Impact of Emerging Technologies on the Surveying Profession, looks at how a sector that has been slow to adapt to technological change can hold back the tide no longer.

It was not commissioned by a technology firm looking to talk up the prospects of its own business; it comes from the Royal Institute of Chartered Surveyors, the nearly 150-year-old body that represents brokers, appraisers and other real estate service providers in the U.K.

The report by Remit Consulting broke down the core jobs of real estate service providers into 43 different tasks and analyzed how susceptible they were to automation in the next decade as a result of technology like artificial intelligence and machine learning, the Internet of Things and block chain.

“Surveying appears to be an industry in which 88% of the core tasks are ripe for automation to a greater or lesser degree,” the report concluded. Surveying is the catch-all term for everything from investment and leasing brokers, to property managers and valuers /appraisers, to construction consultants.

And yet the profession simply does not think this will happen. Remit asked real estate services professionals in the U.K. how likely they thought it was that some of their job could be automated. Respondents predicted an average of 46% of their job could be done by technology, a much lower figure than that arrived at by the researchers.
 
RICS Article – The Impact of Emerging Technologies on the Surveying Profession
Predictions that automation will make humans redundant have a long history, going back to the First Industrial Revolution, when textile workers, most famously the Luddites, protested that machines and steam engines would destroy their livelihoods.

The Fourth Industrial Revolution has started with billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to information.

The opportunities that this situation presents will be magnified by emerging technologies such as artificial intelligence, robotics, new materials, energy storage, and quantum computing. The idea that manual work can be carried out by machines is already familiar; now the Fourth Industrial Revolution sees machines performing tasks done by information workers too. This is likely to usher in a period of disruptive change for all industries including surveying.

Each of these is likely to be disruptive in its own way and in particular areas of the industry. In the assessment of impact, this paper takes as its starting point the structure of the surveying profession as defined by RICS, overlaid with the functional structure of the industry. This allows us to draw up a skills matrix for surveying functions. Surveyors are multi-skilled professionals.

Each job title will share a set of basic tasks and add to this a specialism. For example, brokers will share a set of common task descriptions covering reporting, monitoring of market information, etc. with other disciplines, but will focus on specialist expertise in sales or lettings. In order to model the impacts of a digital future, this research uses the Remit process model as a guide to break down these functions into a set of 43 tasks.

Each task has then been scored according to its content in five areas:
• Data content
• Algorithmic content
• Learning content
• Interpersonal skills
• Physical presence

Of these tasks 18 – nearly half – exhibit a high degree of vulnerability (70%-100%) to automation now and over the next decade. A further 20 show a significant degree of vulnerability (20%+) over the same period. Surveying appears to be an industry in which 88% of the core tasks are ripe for automation to a greater or lesser degree. This finding acts as a harbinger for discontinuous and disruptive change. How aware are industry participants of this coming change? In order to take soundings from the whole industry, an online survey was used to solicit opinion. 154 responses were received. The questions covered nine scenarios based upon the likely impact of technology in different areas:
• Data
• Valuation
• Risk evaluation
• Lease preparation
• Monitoring of market conditions
• Lease management
• Rent collection
• Service charge collection
• Acquisition and disposal of investment property.
 
Responses were solicited as to likelihood on a scale of zero (unlikely) to 100 (very likely). The overall mean across the survey was 46/100. The most likely area for automation was felt to be collection of rent which scored 70/100. The least likely candidate for automation, at just over 28/100, was felt to be acquisition and disposal of property. The majority of other responses were clustered around the mean. At a functional level the impact of automation is likely to be especially disruptive in the areas of lease management, valuation and property, and asset and facilities management and will be seen in different ways:
 
• An increase in the consistency, transparency and timeliness of transactions;
• A step change in the accuracy and timeliness of reporting;
• An explosion in the number of sensors deployed under the IoT umbrella will increase the visibility and responsiveness of all buildings and facilitate remote facilities management;
• A reduction in the cost of managing a portfolio of buildings, it being likely that the headcount in particular areas – valuation for example – will be reduced significantly; and
• A change in the skillset required. Surveyors are likely to become either data scientists or client managers. This has implications for real estate education going forward.
 
Longer term, this revolution paves the way for property to compete on a level playing field with other asset classes, becoming a wholly securitized, flexible, and dynamic asset underpinned by its residual value.

 

Categories Narrative, Tech Industry

Autonomous Vehicles

If you’ve been following this narrative for a while, you know that one of my favorite topics is how technology is disrupting the world around us. Of all the technology I’ve covered, by far the most exciting development is autonomous vehicles.

Almost every major tech company is involved in this technology, from Uber, to Alphabet (Google), to Tesla. (Here’s a list of 44 companies currently at work on this tech.) Having worked with tech firms for almost three decades (since the days of COBOL) and adding new firms each year, you can imagine we have seen a ton of changes in this industry.

Below is an infographic we created about how autonomous cars are changing the commercial real estate landscape. This new trend, along with the ever-changing market, makes having a team like ours on your side at all times imperative. Check out our tech firm-specific site: www.C2techgroups.com to learn more about how we can help you.

 

Craig

602.954.3762
ccoppola@leearizona.com

P.S. The Bachelor – NAIOP Edition is back for season 2 with an all-new group of tenants looking to fall in love with Arizona real estate. Watch the video below!

Bachelor 2 - Ep 1a


Click Here to Enlarge

Autonomous Vehicle Special Report - Version 2

Categories Design, Narrative, Tech Industry

Finally! A Possible Solution to Thermostat Wars

Finally. Maybe? No shot!!  Those were my immediate thoughts when I read the below article.  The war over office temperatures has been fought for decades. The ability to heat and cool their space for themselves, is one of the biggest issues our tenants have. In Arizona, this is compounded by the heat and sunlight beating on the windows during the summer.  

New technology in HVAC data collection and implementation is bringing hope to tenants.  Here are a few highlights:

1.     Agnelli Foundation Headquarters –This building is being equipped with thousands of sensors to track temperature, light, density, etc. in order to provide a climate bubble for each employee.  As the price of sensors drops precipitously, this will change how energy management systems can analyze data.

2.     Comfy – An app designed to give employees the ability to instantly cool or heat their environment.

3.     The Edge – The most high-tech office building in the world provides its tenant with an app that connects them to the building’s lighting and heating systems.  As each individual uses the app, the system becomes smarter, optimizing the environment.

There is no end all be all solution…..Yet.  But there is hope.  Email me if you want us to give you hope in your office space negotiations.

Craig
602.954.3762
ccoppola@leearizona.com


At Last, a Possible Solution to Office Thermostat Wars
New technologies are giving individual office workers more control over the climate around them

By Rachel Emma
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March 3rd, 2017

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Wars over office temperature may be coming to a thaw.

Thanks to advances in workplace architecture and new sensor and app technologies, individual workers are getting more control over the climate around them, which has long been a battleground for office workers.

Some of the new technologies seem straight out of science fiction. One building under renovation in Italy is going to provide workers with their own “thermal bubbles” that can follow them around the building, so workers will each have their own climate-controlled zone. Elsewhere, smartphone apps such as Comfy let workers order a 10-minute blast of hot or cold air. Users click on either “cool my space” or “warm my space” functions on the app, which connects to a building’s ventilation system, says Erica Eaton, Comfy’s director of strategy.
 
The headquarters for the Agnelli Foundation in Turin, Italy, is being equipped with thousands of sensors that measure things like temperature, light levels and occupancy levels, and can make adjustments to temperature and lighting throughout the building in real time, says Carlo Ratti, who heads the eponymous architecture firm that designed the renovation of the more than 100-year-old building. Employees can set their preferred workplace temperatures on an app. Then, heating and cooling units located in the ceilings can be activated by their phones, allowing a “thermal bubble” to follow them around the building. When an occupant leaves a particular space, it will return to an energy-saving “standby mode,” like a computer, says Mr. Ratti, also a professor at the Massachusetts Institute of Technology.
 
If two employees in proximity have conflicting preferences, the system will average them out, “without any thermostat wars,” he says. “Our aim is to shift the focus from heating or cooling spaces, to heating or cooling people and the space they are occupying.”
 
At the Edge, the Amsterdam office of professional-services firm Deloitte that opened in December 2014, workers can provide their heating, cooling and lighting preferences and make subtle adjustments to temperature via their smartphones, after downloading a special building app, says Dave Sie, a strategy and operations executive at Deloitte Real Estate Consulting.
 
The 14-story building’s 28,000 sensors collect anonymized data about workers’ temperature and lighting adjustments, eventually learning aggregated users’ preferences.

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Architecture firm NBBJ, which has designed headquarters for firms such as Amazon.com Inc., is experimenting with new temperature, lighting, movement and sound-tracking sensors it calls Goldilocks, says Ryan Mullenix, an NBBJ design partner in Seattle.

Last year NBBJ placed about 50 of the sensors in its New York office. The sensors generate heat maps that workers can track on their phones, helping them to choose workspaces in the office based on their heating, light and sound preferences, which might change throughout the day, Mr. Mullenix says.
 
NBBJ hopes that the data collected by Goldilocks about its employees’ climate preferences can help the firm design more thoughtful solutions to office climate battles.

“When six people are in one room and they all want six different things regarding climate and light, how do you come to the right consensus? That is the next challenge,” Mr. Mullenix says.

Categories Narrative, Tech Industry

World’s First Solar Panel Road

I remember in high school (proud graduate class of ’79 Buena High School in Sierra Vista, AZ) my economics teacher Joe Bob Cole told us that the person or company that figured out how to make solar power economical would be rich. Fast forward 38 years (I just felt really old typing that) and guess what? One of the biggest areas of innovation is…..solar power.

The technology is just now becoming economical. That does not mean there haven’t been some pretty cool developments.  In 2014, I wrote a narrative about the future of solar roads and solar parking lots (Click here to read).  Three years later and the future is now. A short solar panel road was just unveiled in Normandy, France. Below is an article about the project. 

Here is the current status of this technology:
 
–It works – The road will power the streetlights of a town of 3,400 people.
–It’s short – Only 1 kilometer.
–It’s expensive – $5.2 million to construct the 0.6 mile road.
 
In short, the future is here, but there is still some way to go before it is a viable option.  How will this road handle heavy trucks, weather, and usage? Will the power generation remain constant? These are some of the questions that will get answered over the next few years.  As usual, I will be following this trend and will keep you posted.

 

Craig
602.954.3762
ccoppola@leearizona.com

French Village Becomes Home to the World’s First Solar Panel Road

By: Johnny Lieu
Mashable-logo

Dec. 21, 2016

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Here’s apparently the world’s first solar road.
Image: EPAEPA/CHRISTOPHE PETIT TESSON
The village of Tourouvre-au-Perche in Normandy, France, is taking solar panelling from the roof to the street. The town says it’s just unveiled the world’s first solar panel road.

The 1 kilometre (0.6 mile) route, covered by 2,800 square metres of electricity-generating panels, was declared open on Thursday by the country’s ecology minister, Ségolène Royal.

The panels have been covered with a protective resin that consists of fine sheets of silicon to help withstand the 2,000 motorists which use the road, while ensuring there is good grip between tyres and the roadway.

Officials will see if the technology, called Wattwaycan provide enough energy to power street lighting in the town of 3,400 residents over the next two years, according to The Guardian.

It’s not a new idea however. A similar project in the Amsterdam, The Netherlands opened back in 2014, but on a cycle path instead of a regular road.

If the trial proves successful, Royal wants to see the panels installed in one out of every 1,000 kilometres (621 miles) of road in the country.

France currently has a total of 1 million kilometres (621,000 miles) of road.

Solar Panel Road
Image: EPA/CHRISTOPHE PETIT TESSON
But the technology comes with a mighty price tag: The stretch of road cost 5 million Euros (US$5.2 million) to build, leaving some experts questioning the project’s value.

“It’s without doubt a technical advance, but in order to develop renewables there are other priorities than a gadget of which we are more certain that it’s very expensive than the fact it works,” Marc Jedliczka, vice-president of Network for Energetic Transition (CLER), told Le Monde.

Colas, the road’s manufacturer, is hoping to reduce the cost of production of the panels.

It’s also currently working on a hundred small solar experiments, half in France and half from abroad. 

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Categories Creative Office Spaces, Narrative, Tech Industry

Shipping Containers and Farming?

Months ago, I wrote a narrative on old warehouses becoming indoor farms. (Click here to read.)  Now, we are seeing shipping containers being used to grow produce.  No transportation costs and no packaging costs are clear advantages of this new way of farming. Here are are few more:
 
–          Each 320 sq. ft. box has the growing power to produce 2 acres of lettuce a year.
–          Grow time from seed to harvest can be 6 weeks.
–          Funding for food and agricultural technology startups has doubled in the past year to over $4 billion.
–          No pesticides or GMO’s needed.
–          6 of the top 10 most popular vegetables can be grown in these shipping containers.
 
The times are changing. Want to know more about how space is being used creatively? Give me a call.  

 

Craig
602.954.3762
ccoppola@leearizona.com

Are Shipping Containers the Future of Farming?

The startup Freight Farms is using repurposed freight containers and LED lights to grow acres’ worth of produce in a fraction of the space
By CHRISTOPHER MIMS
WSJ_Logo_BlackBackground_1200x630social
 
June 8, 2016
INSIDE THE CAVERNOUS INTERIOR of a former Boston-area taxi depot—walls covered in graffiti, pools of water on the concrete floors—three gleaming green-and-white containers sit side by side. The steel boxes are former “reefers”—refrigerated shipping containers used to transport cold goods. Bone-chilling rain is falling outside, but inside the 320-square-foot boxes, it’s a relatively balmy 63 degrees, and the humid air is heavy with the earthy smell of greens. Filling each box are 256 neat vertical towers of plants, bathed in a noonday-intense pink light.
 
The crops being cultivated here—lettuce, herbs and other leafy greens—are not what we’ve come to expect from this kind of operation. But the company behind this agricultural innovation owes a large debt to America’s pot farmers. Freight Farms was founded in 2010, its existence predicated on a bet that LEDs would soon become efficient enough for farming as if the sun had disappeared—without breaking the bank. Co-founder Brad McNamara puts it this way: “Traditional research said, yeah, LEDs are good, but the more important research was that they were improving at a Moore’s-Law rate.” Moore’s Law, used to describe the exponential increase in computing power over the past 50 years, can be applied to LEDs thanks in part to the needs—and considerable resources—of marijuana growers.

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In addition to 128 LED strips, each “farm” has a water circulation system, 8 gallon-size tanks of liquid fertilizer and a propane tank for producing supplemental CO2—all running on as little as 10 gallons of water and 80 kWh of energy per day. Under the right conditions, a grower can go from seeds to sellable produce within six weeks. According to data pooled by the company, an average Freight Farms box can produce 48,568 marketable mini-heads of lettuce a year—the growing power of two acres of farmland.

Freight Farms is part of a rapidly expanding field: Food and agricultural technology startups received $4.6 billion in investment in 2015, almost double the $2.36 billion that poured into the sector in 2014, according to a report from agriculture investment platform AgFunder. Companies like John Deere and Monsanto have long invested in new technology for conventional farming, but we’re now seeing a disruption of farming itself.

Freight Farms (1)

“A tractor passes quickly over rows of lettuce—too quickly, it seems, to be performing any complex task. But this tractor is outfitted with computer vision from Blue River Technology, which uses image-recognition artificial intelligence to identify the weeds and weaker plants. In a flash, the machine thins the crop and feeds the healthy lettuce heads—doing a field worker’s job in a fraction of the time.

“But a (potentially) bigger benefit of agricultural AI is a more focused application of fertilizer, pesticides and herbicides, which, when sprayed indiscriminately across entire fields, wreak havoc on our ecosystems. Blue River hopes to lower both the cost and the environmental impact of farming—not bad for what started as a Stanford class project.”
—Mike Ramsey

In 2010, Gotham Greens completed what was then the world’s largest rooftop greenhouse, perched atop a Brooklyn warehouse. “When we started this thing in 2009, we were one of the only ones out of this new guard of hydroponic indoor farming,” says co-founder and CEO Viraj Puri. “In 2016, there’s probably 100 of us.” Near Chicago, FarmedHere, which sells produce to Whole Foods, operates a 16,000-square-foot warehouse filled with towers of hydroponic greenery. In Newark, N.J., AeroFarms, which recently received over $30 million from investors such as Goldman Sachs, is transforming a 70,000-square-foot steel mill into the world’s largest indoor vertical farm.

Freight Farms has received $5 million in funding to date and projects to sell 150 farms this year, at $80,000 each. Selling produce to consumers has proved difficult for many ag startups, but Freight Farms operates no commercial farms itself; instead, the company supplies the technological infrastructure and tools to grow. As a result, its business model has less in common with agricultural operations than it does with Google or Facebook, from its start in a tech incubator to its reliance on data, code and automation. Every Freight Farms box sends a river of data—such as temperature, humidity readings and CO2 levels—back to the company’s central servers. Just as Google becomes more powerful as more people use it, each Freight Farms owner benefits from insight gained across the network. Buyers, many of whom are first-time farmers, are trained in a two-day course and connected by a private online forum where they share everything from data on crop selection to marketing ideas.

There are more than 60 Freight Farms containers installed in 22 states and two Canadian provinces, in climates ranging from the long winters of Ontario to the sweltering heat of Texas. In a development that surprised even the company’s founders, the containers are increasingly making their way onto traditional farms for supplemental income outside the growing season. But most are parked in the interstitial spaces of cities, from warehouses and underneath highway overpasses to alleyways behind the restaurants where their crops are served. The result is hyperlocal produce, which sometimes travels just a few feet from farm to table.


BN-OH626_freigh_P_20160602170424

“We harvest it in the morning, and often it’s in a salad for lunch,” says Bobby Zuker, co-owner of Green Line Growers, which operates out of the former Boston-area taxi depot.

“It feels like a little bit of a science project,” says Mike Betts, a personal chef in Boston who buys lettuce, spinach, kale and herbs from Green Line Growers. “They’re specifically dialing in the nutrients—exactly what that plant needs—and it comes through. You break off their lettuce and it has heightened sweetness. Their arugula is a lot spicier than the wholesale version of it that’s cut a week before and sitting in a plastic container until I buy it.”

That just-picked freshness comes at a price. Green Line Growers sells its mini-lettuces for $1.25 a head—more than twice the cost of typical organic store-bought lettuce. Like many tech services before it, Freight Farms is starting off as a niche product for the rich, but that may not always be the case. The cost of growing indoors is likely to drop with improvements in the efficiency of LEDs, which are projected to require half as much energy in 2030 as they do today.

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Gotham Greens CEO Mr. Puri cautions that indoor farming is unlikely to render traditional farming obsolete. “Hydroponics and controlled-environment agriculture lends itself to certain types of produce, like highly perishable leafy greens, salads, herbs and vining crops like tomatoes, cucumbers and peppers,” he says “But a lot of other ag staples can’t be grown in a commercially profitable way, like grains, root vegetables and tropical fruit.” For the fortunes of Freight Farms and its competitors—not to mention American consumers on the whole—that may not matter. According to the U.S. Agriculture Department, the market for organic produce in the U.S. was $15 billion in 2014. Right now, a Freight Farms container can grow six of the 10 most popular vegetables in America, and demand for those items is expected to increase if Freight Farms achieves its ultimate goal of producing vegetables without pests or pesticide for less than the wholesale cost of their conventional alternative. If that happens, boxed farming could go a long way to feeding a growing population with shrinking arable land. And assuming Uber continues its success, there’ll be plenty more abandoned taxi depots, too.

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Categories Architecture, Narrative, Tech Industry

A 3D-Printed Building?

3D printing is by far one of the most exciting and innovative technologies hitting the market today. But most people have no idea how far along the technology has come. From ears to planes, car parts to prosthetic limbs, and now entire office buildings, 3D printers are already creating amazing things and disrupting entire industries in the process.

Below is an article about an office building in Dubai made entirely through 3D printing.  

My takeaways: 

–Technology is disrupting not only brokerage but development and construction as well.

–The pace is lightspeed.  In the next 24-36 months, we will see a 3D-printed building in the USA.

–Anyone not looking at these advancements, is doomed. 

Everything we know, we need to relearn. This narrative is part of that process, as is our brokerage business. Let us know how we can help you manage all the disruption happening in your world.

 

Craig
602.954.3762
ccoppola@leearizona.com

This May Be the World’s First Functioning 3-D Printed Building

Bloomberg
May 24, 2016
3D Building

Dubai has opened what it said was the world’s first functioning 3-D-printed office building, part of a drive by the Gulf’s main tourism and business hub to develop technology that cuts costs and saves time.

The printers — used industrially and also on a smaller scale to make digitally designed, three-dimensional objects from plastic — have not been used much for building.

This one used a special mixture of cement, a Dubai government statement said, and reliability tests were done in Britain and China.

The one-storey prototype building, with floorspace of about 2,700 square feet, used a 20-foot by 120-foot by 40-foot printer, the government said.

“This is the first 3-D-printed building in the world, and it’s not just a building, it has fully functional offices and staff,” the United Arab Emirates Minister of Cabinet Affairs, Mohamed Al Gergawi, said.

“We believe this is just the beginning. The world will change,” he said.

The arc-shaped office, built in 17 days and costing about $140,000, will be the temporary headquarters of Dubai Future Foundation — the company behind the project — is in the center of the city, near the Dubai International Financial Center.

Gergawi said studies estimated the technique could cut building time by 50 to 70 percent and labor costs by 50 to 80 percent. Dubai’s strategy was to have 25 percent of the buildings in the emirate printed by 2030, he said.

(Reporting by Lara Sukhtian; Writing by Sami Aboudi; Editing by Louise Ireland)

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