The Future of Cities, Construction & Real Estate

Transcription

1 The Future of Cities, Construction & Real Estate

2 1 Agenda 1. WEF Infrastructure & Urban Development Initiatives 2. The Future of Cities 3. The Future of Construction 4. The Future of Real Estate

3 Shaping the Future of Urban Development & Services Initiative

4 Shaping the Future of Urban Development & Services Initiative Structure Steering Board (Companies) Steering Board Advisory Board (International urban experts) Regional Working Group (Key regional stakeholders) Arup (Chair), Audi, Averda, BT, Cisco Systems, Citi, Danfoss, Hindustan Construction Co., Hewlett Packard, IBM, Japan Asia Group, JLL, Jabal Omar Development Company, King Abdullah Economic City, Mahindra Lifespace, Mori Building, Novo Nordisk, Phillips Lighting, Qualcomm Technologies, Wadhawan Group, Rockefeller Foundation, RMZ, Siemens, Toshiba, Volvo Group, World Bank Advisory Board City Representatives NGOs / Charities / Public Organizations Tech-Pioneers & Social Entrepreneurs Urban Experts Academia May April 2018: Cities & Migration Deep dive on migration and cities, exploring the types, causes and patterns of migration to cities, the impact on urban infrastructure and services, the solutions that can be employed and how cities can seek to future proof themselves to address this growing challenge. Embracing Circular & Sharing Economy Recognize the impact of the sharing & circular economy and identify how cities can leverage this opportunity, to do more with less and how greater public private cooperation can assist. Support cities in developing a regulatory framework where the sharing & circular economies can co-exist with the traditional delivery models Affordable Housing Understanding the affordable housing demand and supply gap in cities. Role of private sector in supporting public sector to meet housing needs and achieving affordability challenge GFC Cities & Urbanization ( ) Collate: Collate best practice case studies on where city data, technology and innovation has enabled city transformation. Disseminate: Case Studies report will be produced and disseminated. Implement: Leveraging Council members and the Global Shapers to implement these ideas in cities around the world. City Data: Collate cross sectoral city data indicators to identify the systematic impacts and trends resulting from urbanization using sample cities. The systematic impacts and trends will be analysed and visualised to demonstrate that cities are living, breathing organisms that operate as systems of systems. Future Briefing: The councils work will be captured in a digital and interactive Future Briefing e.g. research, analysis, commentary and recommendations. Convention & Dissemination Host sessions during the Forum s annual and regional meetings and co-host other events. Disseminate through blogs: 3

5 Shaping the Future of Construction Initiative #FutureOfConstruction

6 Projects: Shaping the Future of Construction Initiative A multi-year project enabling the transformation of the IU industries Background Year 1: Mapping the Future Year 2: Implementing Innovation Enabling industry, accounting for 6% of global GDP and #1 consumer of raw materials Industry traditionally slow to adopt new technologies productivity lags behind the rest of the economy Megatrends such as demographics and urbanization, tight budgets, regulatory pressure and sustainability will shape the industry Need to confront also internal challenges, e.g. shortage of young talent, insufficient knowledge transfer and little cross-functional cooperation Assessed the current state, challenges and future outlook for the industry Developed Industry Transformation Framework listing 30 measures from technology & tools to people & culture Identified many best-practices and innovative approaches from various industry stakeholders Call for action to embrace innovation on the company, sector and government level Main finding of Year 1: "there are great innovations, but they are not adopted" Aims to identify key success factors for implementing innovation on the project, company & government level Guide the industry in its transformation process to improve project delivery (time & budget), lifecycle performance and minimize its environmental impact Conduct in-depth case studies to understand implementation challenges and identify key learnings on how to overcome those Year 3: Scenarios for the Future Aims to derive strategic implications for companies and governments in the construction ecosystem to help them master the transformation of the industry Develop scenarios for the future based on megatrends Conduct workshops and interviews with CEOs to understand their strategic responses and implications for their business along key dimensions such as business models, talent, collaboration, value chain integration, regulation etc. Connect the work on innovation in construction with (previous) WEF work on PPPs and O&M of infrastructure assets Steering Committee of the initiative Industry Transformation Framework Key Success Factors for Innovation Scenarios for the future

7 Shaping the Future of Real Estate

8 Shaping the Future of Real Estate Initiative Analysis & Recommendation Phase (2014) Early Warning System & Business School Case (2015) Recommendations Mitigation Solutions (2016/2017) Facilitate high-level discussions about how consequences of asset bubbles can be limited through innovative solutions. Understand the underlying mechanisms, root causes, investigate leading theories, assess the impact (capital and social cost) of highly volatile markets Facilitated multistakeholder discussions Developed industry recommendations on how policies and strategies can contain and mitigate asset price volatility Secured CEOleadership commitment and collaboration to a shared vision and established priorities high-level multistakeholder discussions further define real asset ecosystem how the consequences of asset bubbles can be limited through innovative solutions. help market players make more informed decisions designing a prototype early warning system to flag markets that may experience dramatic downturns institutionalizing the team s insights and learning through developing an educational curriculum comprehensive case study 2015 Early Warning System & Real Estate Ecosystem Case Studies Compile leading practices and mitigation solutions focussing on (a) improvements of market data, (b) increased transparency, (c) assessment of external policy impacts, (d) stabilizing interventions addressing the specific capital structure of real estate (e) special requirements for emerging markets as well as (f) requirements of an information clearing house ( hub ) to better assess economic costs and benefits of alternative policy options, development of financial instruments, reform of the banking sector as well as the impact of microeconomic factors, such as long-term spatial planning regimes; Assess the social angle of wealth destruction from unmitigated consequences of asset bubbles, particularly in housing. Mitigation options will include (a) affordable housing solutions, (b) novel funding/investing/financing, business options and new urban services to mitigate the risk of uncontrolled informality, (c) new financial instruments to mitigate extreme volatility, (d) transparency and anti-corruption solutions as well as (e) regional specifics including emerging markets. Source: World Economic Forum Shaping the Future of Real Estate Initiative

9 The Future of Cities

10 An Urban World: Global Footprint The 30 Most Populated Urban Agglomerations Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative & PwC Research 9

11 Source: World Economic Forum, Global Risk Report 10 Global Trends Impacting Cities Climate Change Environmental Degradation Ageing population Increasing polarization Rising Migration Accelerated Urbanization Fourth Industrial Revolution Universal Design

12 Global Urban Challenges North America Climate change South America Economic development Climate change Mobility Environment resource management Urban planning Climate Change Environment resource management Social inclusion Mobility Water Environment Management Europe Migration Climate change Economic development Demographic change Environment resource management Middle East & North Africa Water Safety & Security Innovation & Entrepreneurship Migration Environment resource management Sub Sahara Africa Water Economic Development Economic development Innovation & Entrepreneurship Safety & Security Environment resource management Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative & PwC Research Water Asia Urban Planning Environment resource management Climate change Water Mobility Social Inclusion Oceania Climate change Environment resource management Economic development Investment climate Power/ Energy 11

13 Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative & PwC Research 12

14 Forces Driving Urban Transformation & Challenges Encountered New Business Models Digital integrated city services CityOps (city operations) as a service Public asset revitalization The circular and sharing economy Innovative public services outsourcing Pricing structures for peak load distribution Talent Leadership City advisory Challenges Encountered in Transformation Governance Budget Constraints Technology Innovations Internet of Things Mobile-based Sensing Location & condition sensing Big data Data analytics Open data Intelligent Transport Smart grid Sourcing Citizen Risks e-id Demographic & Mobile Trust health monitoring Challenges Attracting and Lack of visionary Governance Reduced Budgets retaining talent leadership Structures Difficulty in Technical /Special Mayors with limited Collaboration across increasing taxes Knowledge power level of government and user charges Project and program Top leadership Lack of transparency management support Policy Distortion capacity Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative & PwC Research Increased dependency & Vendor Lock-in Regulatory Issues Lack of trust Increased Migration (Rural, Economic Opportunity, Wars and unrests) Demographic Change (Ageing) 13

15 Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative & PwC Research 14 Enablers for Urban Transformation Stakeholders Purpose Lenses Characteristics Enablers Impact Governance Structures City Scale Administration Increased Devolution Regulations Begin with Fundamentals Develop Smart Regulations Successful Execution of Action Plan Academics Private Sector Government Citizens NGOs City Vision Technology & Governance Business Models Collaboration Agility Innovation Integration Institutional Capacity Attract & Nurture Talent Optimize Processes Leadership Pragmatic, Business Friendly Balance multiple roles Standards Enhance Reuse Integration & Interoperability Planning Break Silos & Integrate ICT Balance over, under-planning Realization of City Vision Improved Delivery of Urban Services Sustainable Development Funding & Financing Make project and institution financially sustainable

16 Accelerating Public Private Partnerships in Urban Development Stakeholder Readiness for Urban transformation Risks in PPPs: Developed Economies Community opposition Asset transfer Asset-specific regulation Changes in taxation Risks in PPPs: Developing Economies Cancellation or change of Change of industry scope regulations Environment and other Judicial risk permits Corruption and market Breach of contract distortion Risks in Urban Development Public Private Partnerships Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative & PwC Research Participation in Urban Development Value chain Government Initiated Actions 1. Stability of the regulatory environment 2. Efficient administration 3. Reliable dispute resolution mechanism Private Sector Initiated Actions 1. Engagement with the public sector 2. Engagement with local communities 3. Ethical conduct 15

17 Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative & PwC Research 16 Action Plan for Transformation

18 The future of cities cannot be one of unsustainable expansion it must be one of tireless innovation 17

19 18 Four Principles at the heart of Top 10 Urban Innovations: Unleashing spare capacity Cutting out the peaks Small-scale infrastructure thinking People-centred innovation

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21 20 Infrastructure for Social Integration: Medellin Medellin s elevated cable car has led to the city s spatial, social, economic and cultural transformation. Connects the city s low-income residents and communities with its wealthier commercial centre. Medellin was considered one of the most dangerous cities in the world. Today, it is seen as a laboratory of progressive architectural and urban interventions.

22 21 Amsterdam Sharing City On February 2nd 2015, Amsterdam was pronounced the first Sharing City in Europe. The purpose of the Sharing City initiative is to create a playground for pilot projects. Projects include: ParkFlyRent leases out cars parked by holidaymakers at Schiphol airport Camptoo allows people to rent privately owned motorhomes AirDnD (Drink and Dine) which offers food in private homes prepared by around 2,000 amateur chefs

23 22 SolarLeaf, City of Hamburg The city of Hamburg, Germany, for example, implemented the world s first bio reactive facade SolarLeaf house pilot project. The integrated bio-reactive facades generate renewable energy from algal biomass and solar thermal heat. This biomass and heat generated are transported to the building s energy management center, where the biomass is harvested through flotation and the heat by a heat exchanger. The heat that SolarLeaf provides is equal to the total heat demand of the 15 residential units.

24 23 Hydrogen Leader City Project, Fukuoka In 2014, Fukuoka launched the Hydrogen Leader City Project, a low-carbon program to promote hydrogen energy wherein human sewage is used to produce hydrogen for fuel in fuel cell vehicles, or FCVs. In this collaboration between industry, academia and the government, the city government provides the biogas generated from sewage, and the university and private sector provide the thought leadership, strategic direction, design advice, construction and operation facilities, and supply chain.

25 24 Intelligent Street Poles as a Platform for Urban Sensing Next-generation LED street lights can act as a platform for a host of sensing technologies that collect data on weather, pollution, seismic activity, the movement of traffic and people, and noise and air pollution. By linking these intelligent street poles into a network, it is possible to sense what is going on across a city in real time and provide innovative solutions in areas such as public safety or identifying where there are free parking spaces. One such system, the Light Sensory Network, was demonstrated by Cisco, Sensity and the City of Chicago during walking tours at the Internet of Things World Forum.

26 The Future of Construction

27 Car manufacturing Construction 26 Construction has changed very little in the past Today

28 Productivity has not changed either or even deteriorated Index of US labor productivity Relative improvement: +153% 200 Non-farm business labor productivity CAGR +1.9% 100 CAGR -0.4% Construction labor productivity % 1. Peer set based on US companies with ECS-related SIC codes. Output per working hours Source: Global Vantage; Compustat; Bloomberg; S&P Capital IQ; BCG ValueScience Center 27

29 Megatrends Shaping the Construction Industry 28

30 29 New (digital) technologies will transform the industry BIM & digital asset mapping 3D printing/additive manufacturing Big data & predictive analytics & simulation Wireless monitoring (sensors, RFID, IoT) & connected equipment Autonomous construction, incl. drones & robotics Advanced Building Materials Cloud and real-time collaboration, mobile connectivity 3D scanning & photogrammetry Pre-fabrication & modular construction Augmented reality & virtualization

31 Construction Industry Transformation Framework 30

32 We analyzed innovation leaders to identify KSFs & policy recommendations to accelerate innovation 31 The Edge New Karolinska Hospital Burj Khalifa Anglian Alliance Moladi

33 32 Most sustainable office building with BREEAM rating of >98% IoT that connects everything from elevator, towel dispenser to coffee machine >30,000 sensors in the building collect information about usage for smart facility management Building app allows users to interact with building (lighting, room booking, coffee machine, etc.)

34 33 New Karolinska Solna Using BIM across the entire lifecycle of world's largest hospital PPP BIM-enabled cloud collaboration tool allows smooth handover of the hospital's 12,000+ rooms Enhanced facility management incl. 29 automated guided vehicles that will autonomously conduct logistics between the different buildings We simply could not have done it without BIM

35 34 Burj Khalifa Technological innovation to enable construction of the world's tallest building Record-breaking concretepumping and glass panel installation enabled through close collaboration with suppliers Early involvement of government, regulator and utility company enabled smooth construction process Very experienced, multi-talented team & specialty consultants

36 35 Supplier Alliance to improve delivery of Anglian Water's capital project Developed over 200 standard products through longer-term perspective of 5-year investment plans Vision to become continuous improvement organization design the product once get it right use it many times...

37 36 Train the unemployed to build for the homeless. Low-tech & low-skill affordable building solution from South Africa Hennie Botes, Founder and CEO In-situ casting of houses with re-usable plastic formwork Piping & wiring, window frames placed into assembled formwork before filling with aerated mortar System used for residential housing and courthouses in Tanzania & 20 countries

38 37 Building a 57-storey skyscaper in only 19 days Applying manufacturing principles to construction Shifting 90% of construction process to factory using pre-fab Steel-frame floor plates pre-fitted with wiring and piping and structural steel columns are sticked together during assembly

39 BSB exemplifies broader trend towards modular construction Some examples of modular construction Modular Construction UK insurer Legal & General invests 50M in a flat pack housing factory to prefabricate complete homes, incl. white goods and interiors Integrated into BIM Object Libraries Applied across all sectors (commercial, residential and infrastructure) Driven by non-traditional players from manufacturing industry leverage their experience CREE (part of Austrian Rohmberg Group) offers wood hybrid pre-fab building system that is fully integrated with BIM Object Library. UK utility company Anglian Water developed over 200 standard products for its infra projects that are produced off-site, e.g., treatment plants Source: Expert interviews, company websites; BCG Analysis 38

40 Manufacturing giant Flex aims to revolutionize construction Leading global manufacturer of consumer electronics Design, manufacture & service products for OEMs (Apple, Cisco, Dell, Microsoft, HP, etc.) 200,000 employees $24 billion revenues Aim is to reduce building costs by 50% and grow this into a billion dollar business line Mike McNamara, Flex CEO Source: Company website; youtube; BCG Analysis 39

41 40 Software to transform standard industry robots into autonomous 3D printers Focus on metals using Wire- Arc Additive Manufacturing Multi-disciplinary team collaborating with several industry players The first step was to make everybody want this project. Gijs van der Velden, COO

42 Design automation from semi-conductor industry Design rules & objects as input "What if" analyses to choose optimal solution Patented modularized and prefabricated components The approach to designing buildings has not fundamentally changed through BIM: instead of drawing plans for pyramids in the sand, you now draw with your mouse. Deepak Aatresh, CEO 41

43 BM specialist venturing into 3D printing of houses (incl. multi-storey) Ink is mixture of cement, sand, fibers & additives up to 50% demolition waste Built the first 3D printed office in Dubai and partners with RE firms for commercial projects Plan to use 3D 'printed formwork' for infrastructure If you don't believe it's possible, we'll print a prototype. 42

44 It's not just Winsun 3D printing driven by many players Some examples of additive manufacturing 3D printing (Additive Manufacturing) Vinci signed long-term partnership with French startup XTreeE that printed Europe's first loadbearing structure (working with LafargeHolcim, Dassault Systems and ABB). Unprecedented freedom of design ("build what we couldn't build before") Currently, mainly off-site printing ('printed pre-fab'), future on-site autonomous construction Starting in vertical construction but venturing into infrastructure BAM launched a freeform 3D printer to autonomously navigate construction sites and print different materials Russian startup Apis Cor went public with its 3D printed house that was printed and painted in 24hrs and cost just about $10k Source: Expert interviews, company websites; BCG Analysis 43

45 44 Predictive analytics software for construction and other heavy equipment industries Optimize unscheduled downtime, lifespan, maintenance cycles, etc. Forbes' hottest startup of 2015 and now valued at over $2bn We are choosing to be disruptive with an industrial partner who has a strong edge, rather than disrupt the old-fashioned way from the outside. Brad Keywell, CEO

46 The Future of Real Estate

47 46 Technology & Real Estate Developments include e-commerce and a growing demand for warehouse space, shrinking demand for retail space and new customer expectations. The internet and its infrastructure is changing conventional supply-and-demand patterns. Robtics Reprogrammable & Multi use space

48 47 Bubbles Technology & Real Estate When global equity and real estate markets hit their lowest points in March 2009, $34.4 trillion of global wealth was destroyed. US households lost $6 trillion loss in the market value of their homes. In aftermath of the crisis, trends in real estate markets have become increasingly hard to predict. Therefore, imperative to take long-term perspective. Policy-makers are currently debating whether asset-pricing dynamics can, or should, be managed with the public interest in mind.

49 48 Migration & Urbanization The United Nations predicts that 65% of the developing world and 86% of the developed world will be urbanized by 2050 and that 3 million people per week are migrating to cities. The real estate sector can help find solutions: coming up with social housing concepts, for example, or helping to reinforce rural communities.

50 49 Sustainable Real Estate Real estate consumes 40% global energy 20% green house gases orignate from buildings

51 50 Addressing Affordability Demand and Gap In million people lived in slums and required adequate, affordable housing By 2025 Investment of $9 trillion to $11 trillion is required for construction With land, the total cost could be $16 trillion By Another 1.6 billion will require adequate, affordable housing. Equal to 440 million units $1 trillion - $3 trillion will come from public budgets REST? Addressing the causes: Land availability and supply Costs and types of construction Ownership Financial models

52 51 Infrastructure as a catalyst of real-estate development The quality of infrastructure systems, such as transportation, utilities and telecommunications, is the most important factor in real estate investment and development in cities, according to a survey by the Urban Land Institute. Strong telecommunications systems, including high-speed internet, topped the list, along with good roads and bridges, and reliable and affordable energy. Infrastructure plays a critical role in guiding real estate activity and economic development, and reinforces the need for close coordination between land-use planning and infrastructure planning.

53 52 Demographic transitions are redefining consumer needs The change in demographics has a substantial impact on the real estate industry.

54 53 53 Grazie Danke Thank you Merci धन यव द Tack آپ کا شکریہ благодарю Gracias ありがとう Dziękuję תודה לך شكرا لك Alice Charles Lead, Urban Development & Global Leadership Fellow World Economic Forum Route de la Capite Cologny, Geneva Switzerland T. +41 (0) M. +41 (0) E. Bedankt ਤ ਹ ਡ ਧ ਨਵ ਦ 谢谢

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