By Imre-Gustav Vellamaa
In 1942 Isaac Asimov proposed the Three Laws of Robotics:
1. A robot may not injure a human being or, through inaction, allow a human being to come to harm.
2. A robot must obey the orders given it by human beings except where such orders would conflict with the First Law.
3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.
I would not bet on it that the EU was taking these three laws into consideration when they established the legislative framework that included the Energy Performance of Buildings Directive 2010/31/EU (EPBD) and the Energy Efficiency Directive 2012/27/EU to boost the energy performance of buildings. However, there is a strong correlation between the two. What is it?
AI with tremendous development
These two directives are the foundation to promote three main policies that, beside others, will help to achieve a highly energy-efficient and decarbonized building stock by 2050. The building sector is crucial for achieving the EU’s energy and environmental goals. At the same time, better and more energy efficient buildings improve the quality of citizens’ lives while bringing additional benefits to the economy and society. Can humans achieve these goals without help? I would not bet on it. And the reason very simple – older buildings’ stock needs total renovations with automatization and newer buildings are just inefficient because of automatization as it is too complex and too complicated for humans. Just one sample from HVAC: an automatization of a modern 25.000 sq m office building with 3.000 controllable mechanical components and 50.000 datapoints significantly supports any of the world’s best building operators, but the gap between the achieved and achievable results can still be huge! I know from my own personal experience that even gaps of over 30% are possible. What to do?
In 1997 Deep Blue was the first computer to beat chess world champion Garri Kasparov. Since then, robots–or maybe it is better to start using the more modern term artificial intelligence (AI)–have had a journey of tremendous development. And 30 years later, AI was ready for the real estate market as well. One of the main reasons for that was definitely Industry 4.0. (this term was first publicly introduced in 2011). According to University of Oxford the major technologies driving the fourth industrial revolution are: cloud computing, the internet of things, artificial intelligence and machine learning, and sensors. And the most important one: real estate as an asset; and the industry is not immune to the innovations made possible by the fourth industrial revolution. How well are real estate owners and managers prepared for that? Is the real estate market ready for AI?
A long way to go
The Global PropTech Survey 2019 prepared by KPMG pointed out that only 58% of real estate companies had digitalization strategies and only 25% had strategies for data processing.
Likewise, the survey of KPMG that focused on technological trends of the real estate sector pointed out the similar results: only 29% of the companies used data analytics and 54% had no intention of using in in the near future.
97% of all respondents believed that digital and technological innovations would start to influence their business, but their readiness for that purpose was only at 5 points or less in a 10-point scale. 95% of real estate companies have hired someone who is responsible for leading their digital transformation and innovation. In 62% of these cases, this is a senior employee. However, in 65% of these cases, this person is not a digital or technology specialist. To summarize these results: the situation is not too bad but there is still a long way to go. And I truly believe that there will be remarkable changes in the results of the 2021 survey compared to 2019.
It has been said that “Covid is the last wake-up call for the conservative real estate industry”. This statement is probably a bit too dramatic but there is some truth to it. The EU directives’ goals for 2050 seem too far off, but the direct pressure for higher efficiency from tenants–who actually pay the bills–has grown remarkably in 2020-2021. And this changes the market significantly. Solutions are needed fast!
As proposed in 1942
Fortunately, these solutions already exist and are being develop continuously. Four years ago, nobody (?) believed that AI could operate huge HVAC systems (I am not talking about monitoring or analytics or new hardware but an ability to adjust the right setpoints automatically in the existing high-level infrastructure, 1,000s of times per month!). I absolutely agree that very often it is annoying to start using new technologies. There are also different risks involved. But how to overcome all the bottlenecks to launch new technologies is a topic for another time. Today, I would like to focus on the fear of robots… sorry – artificial intelligence.
There is no reason to be afraid of AI just because it is AI, something new, of because of Asimov’s three laws from his science fiction novels. The reason why AI makes sense is logic. For a real AI it is not enough to follow just one rule. In the context of real estate, it cannot be efficient if ventilation is working perfectly but more heating is needed because of that. It is easy to save even 100% of energy but all the people would flee the building because these savings would make the building dark, cold/warm, without fresh air etc.
Thus, in every real AI solution many indicators are taken into consideration at the same time–energy efficiency, indoor climate, comfort and wellness, technical conditions etc. And the main indicator is still the same–safety. Exactly like Isaac Asimov proposed in 1942.