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- Industry context
Last edited 28 Jul 2017
We could be on the brink of a demand revolution
When Rio de Janeiro hosted the 2016 Olympics, one in six of the half-million visitors stayed in Airbnb lodgings. Without the additional rooms, Rio would have needed to build another 257 hotels to house those tourists, according to a study by the World Economic Forum.
Beyond the material and environmental savings – not to mention the hotel over-capacity avoided – the visitors generated $25 million in income for their local hosts, spending an average of $136 per day.
By using artificial intelligence technology to manage its already-efficient power use, Google has reduced the amount of electricity it uses to cool data centres by 40%, describing it as a 'phenomenal step forward.'
Developed by DeepMind, a British firm acquired by Google in 2014, this machine learning technology could also help power plants get more energy out of a given amount of fuel, while cutting energy and water use in a wide range of manufacturing sectors.
[Image: World Economic Forum – Understanding the Sharing Economy]
A passenger car is idle 95% of the time. But changes are underway to reduce that waste, and also congestion: in cities such as Mumbai, Delhi and Mexico City, shared vehicles are expected to account for almost half of passenger miles by car by 2030.
These are but a handful of examples showing how economic activities are being reconfigured around the world, with radical implications for the future.
 A new industrial revolution
Thanks to advances in computing power, artificial intelligence, and digitalisation, as well as in material science, information technology and product design, concepts which were once only theoretical propositions – such as advanced analytics, cognitive computers, machine learning, operational transparency (through the use of blockchains and smart contracts), hypermobile operations, and experience-based services – are now very much reality.
These developments also call into question the assumption of ever-increasing demand from an increasingly affluent, growing global population.
Typically, forecasts of future demand are simple extrapolations of the historical relationships between per capita demand for a specific product and per capita income.
It is time to revisit these assumptions.
How we meet future needs will be shaped by a variety of factors – population figures, resource availability, income levels, regulatory pressures, relative prices, cultural preferences and technological breakthroughs.
But new technologies are bridging the gap between producers and individual consumers in many sectors and this, together with big data, creates new ways for consumers to signal their preferences in a far more immediate and informed manner.
 New dimensions
Let’s take energy as an example. For much of the last century, energy policy discussions were dominated by concerns over supply scarcity and access to conventional energy supplies at affordable prices.
But policy also matters.
In May, 2017 the International Energy Agency (IEA) said it would review its electric vehicle (EV) use and oil demand forecasts, after India and China signalled preferences for electric cars and other non-gasoline vehicles.
Although fundamental disruptions of the kind being seen in the energy sector do not automatically bring more sustainable outcomes, the good news is that opportunities abound to move collectively into more positive, uncharted territories. The growth of the consumer sharing economy, represented by the likes of Airbnb and Zipcar, is now well-established.
Less well-known is circular economic thinking, which has enormous transformative potential to lessen resource burdens and environmental impacts.
 Circular savings
With growing widespread use of energy-efficient light bulbs, such as LEDs, Goldman Sachs estimates US power consumption for lighting could drop by one-quarter between 2015 and 2020 – the first meaningful decline since Edison invented the lightbulb.
Meanwhile, new cultivation methods could decouple food production from land use, through hydroponics (water-based systems delivering nutrients through fortified solutions), aeroponics (soil-less systems using minimal water), and aquaponics (combining aquaculture and hydroponics to cultivate fish and plants in a closed-loop system).
 Changing diets
And as the impact of meat production on both health and the environment becomes the subject of growing concern, there has been a sharpened focus on demand-side options such as changing diets and reducing food waste.
Since 2014, more than 90 global companies – from digital giants Microsoft, Apple and Google and retailers Walmart and Marks and Spencer, to carmakers General Motors and BMW, as well as financial giants Goldman Sachs and Bank of America – have made a commitment to go ‘100% renewable’.
The commitment to no net deforestation from four agricultural supply chains by the Consumer Goods Forum also points to how major companies can drive sustainable practices throughout their value chains.
Of course, no transformation is straightforward, even though the prospect of decoupling resource consumption from economic growth is on the horizon.
Exciting new materials may be harder to reuse, for example, 3D printing could well lead to a proliferation of unsustainable, disposable products – the environmental equivalent of cat memes on the internet.
 Overcoming challenges
There is a clear need for geographically tailored options to decarbonise construction, whether by using alternatives to traditional cement, improved energy efficiency in cement production, and perhaps carbon capture and storage.
But this also raises more questions.
Does this not merely displace resource considerations to another sector?
And machine learning could further help to identify optimal solutions.
 New dynamics
But efforts are underway to develop radically different assessments of the future, this time led by companies with an acute understanding of the need to optimise assets to unlock value and enhance customer experience.
In recent years, governments and businesses are increasingly exploring the use of ‘nudges’ in policy-making – with the goal of using behavioural science to enable citizens to better make their own decisions.
Uncertainties aside, policies and measures designed using behavioural science and empirical evidence hold great promise – not least because the success of any policy is contingent not only on its technical potential but also its palatability and uptake.
With the help of behavioural insights and new technologies – through data analytics and optimisation – governments and businesses alike have the opportunities to help shape future consumption decisions towards more sustainable outcomes.
 More with less
Looking to the future, the need for policies and regulatory models that both accelerate innovation and avoid locking in unsustainable resource pathways is clear, not least because it is not easy to predict disruptive change, and disruptions do not necessarily bring better environmental outcomes, or that they could be misused.
Ultimately, the prospect of doing more (and better) with less, holds the key to a more sustainable future, which is unlikely to emerge solely from the interplay of market forces for using idle cars, empty apartment rooms or technologies to make energy use more efficient.
To harness the potential of meeting future needs with less, and to capitalize on the alignment of technologies, new business models and consumer preferences requires new forms of collaboration between governments, cities, businesses, labour, and civil society.
It also necessitates diligence and openness on the part of stakeholders, and a redesigning of policies and planning processes to enable the most sustainable and equitable options to become the new business-as-usual for our growing population.
Please find the original article here
--Future of Construction 13:35, 04 Jul 2017 (BST)
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