~ Gary London

Does Technology Really Matter?

The topic on the tongue of most attendees, speakers and panels at the Urban Land Institute’s Fall meeting in San Francisco this past week was “technology”.

One of the more interesting presentations that I attended featured futurist Paul Saffo, who spoke about the “exponential” speed of change – he even taught us mathematically what exponential really means! A surprising conclusion: builders shouldn’t try to keep up with the newest technology. This is because it changes so fast as to threaten to make even the newest buildings technologically obsolescent by the time they are completed. He suggests that it is better to keep buildings as dumb as possible (my term) so that they can accommodate technology as it happens. In other words, don’t bother to spend the money. Its wasted.

Also from him, a wakeup call about autonomous autos. This is something I have also been thinking about for a long time. At some point cars that are run by robots will have a transformational effect on the form of cities, the habits of the where and when of commuting, even whether builders need to include parking structures in their buildings.

According to Saffo, they’re here. He declared with one declarative, almost outrageous distinction from my “at some point” observation: he thinks the autonomous car will be on the road and working within the next five years. This hearkens back to his exponential thinking. He told us that almost all of the technological kinks have been worked out of these cars. The only problem they haven’t solved is dealing with human drivers. That has caused just about all of the accidents in the on-the-road tests.

So, there will be a period of tension between humans and robot cars until they get to know each other’s driving propensities a bit better. But Saffo believes that is not going to slow down the inexorable transition to driverless cars. And soon.

Speaking of technology: this was by far the overarching theme of this year’s ULI conference. I believe that was mainly due to the location of the conference in the tech capital of the world, where attendees lined up to see and hear the products of the new age entrepreneurs, who have caused the commercial and residential repopulation of SF, not just the Silicon Valley.

I have no doubt that the location played a role in elevating technology to the front of the themes of the week. But in so elevating, I think that an important point is missing. We are treating TECHNOLOGY as if it is a separate sector. Some even still equate it to the boom and bust era of the beginning of this century when all kinds of stuff were thrown up against the Internet wall to see what concepts stuck.

But this is not what is happening at all. Technology is in everything. At this point, it is just business. What we are seeing in the Apple, Google, Facebook, Salesforce, etc., are companies emerging and stabilizing as the standard bearers of what is business today.

This is no longer a separate sector that requires a special response from the land use development sectors. It’s just the 21st century of what is going on economically. Our job is, as it is always, to accommodate these businesses in our buildings, and weave them into our communities.

They really aren’t different. They occupy office buildings or corporate campuses. They create job demand which, in turn, creates housing demand. The demand is people. They want to live as near or as convenient to their jobs as possible. They want the highest quality of life possible. Right now they are mostly young because, well, new jobs are usually filled by young adults, in any economy and in any time.

In this regard technology companies and their employers are mostly indistinguishable from their forebears including their parents, grandparents and great grandparents. Which mostly takes us back to the industrial revolution.

An example of this point is two panels I attended regarding how people work today. The buzz in the commercial office sector is “co-working”, and the need to accommodate these co-working environments where mostly small businesses and startups share space. There are even big companies and web sites all set up to make it seamless for both the commercial office owner and their prospective tenants to slip into one of these environments.

I think much ado is being made of nothing. The percent of businesses resident in this business mode is infinitesimal, in the single digit percent of all demand. Perhaps 100,000 persons in the entire U.S. are in co-working environments according to Emergent Research. Sure, it’s great if “We Work” signs a big lease in your building to take up your vacancy, or even to serve as the anchor tenant. But it’s not going to happen in most buildings and not in all but the biggest markets.

In other words, co-working is interesting, but not particularly impactful. It may end up being more about dating or otherwise dealing with the loneliness of smallness or startupness than it is some kind of impactful business and occupancy trend.