Organisations and individuals do not own everything they need. Civil engineering firms may hire road traffic management solutions, individuals may rent holiday houses, governments may hire specialist technical equipment, and large businesses may license specific intellectual property for specific purposes. This is the essence of this industry - entities providing tangible and intangible assets on a temporary basis. While other industries have significantly changed over the last decade or so, for this industry change is generally more evolution than revolution. However, change is happening and this is what this article is canvassing. That is, what could happen in terms of careers and business in this industry. It is a futurist’s take on how things might pan out over the next 10 years or so.
For the purposes of clarity, the future of this industry is viewed through the lenses of climate change and computerisation. For these are the two global megatrends that are shaping much of the world as we know it. There are other global megatrends, such as technological convergence (for example, collaboration across the fields of genetics, nanotechnology and robotics) but their influence on the rental, hiring and real estate services industry is not as significant.
About the global megatrend of climate change
Our world is being impacted by the rising atmospheric concentration of green-house gases (ie. carbon dioxide, methane, nitrous oxide, and a range of industrial gases). The established scientific consensus is that there is a direct correlation between the rising concentration of carbon dioxide in the atmosphere (rising from an historical peak of 300ppm, to about 420ppm today) and a rising average global surface temperature (increasing 0.180C every decade for the last 40 years).
However, whilst the average global temperature is rising the average temperature in the Arctic polar region is rising at about twice the rate. The phenomena is due to large weather systems carrying more energy into these region than they can handle.
The Artic, and other regions where water is naturally solid (ice and snow) comprise what is called the cryosphere. It is these regions, the two poles, the mountains of high elevation and areas of permafrost at sea level, that have seen sometimes dramatic changes as the surrounding air has warmed. There are examples of this: the loss of ice sheet mass, the reduction in the coverage and thickness of Arctic Sea ice, the changes in atmospheric jet streams, the increased acidification of polar oceans, and Arctic Circle heat waves and wildfires.
Quite obviously, this megatrend will continue to both drive change in natural world ecosystems, and change in our reliance upon, and production of, green-house gases.
About the global megatrend of computerisation
In a supportive role, the printed circuit board plays a vital role in the megatrend of computerisation. Computer chips are mounted on printed circuit boards (PCB), which are more commonly known as motherboards. Motherboards are what a computer’s memory (RAM) and processor (CPU) is plugged into. Likewise, the connectors that the computer’s monitor, keyboard and mouse are all connected to the motherboard. Each have different connectors. These connections enable the processor chip to communicate with the outside world. For smartphones, tablets and laptops, the approach is the same.
As time has gone on, more computing power and functionality is squeezed into smaller physical spaces (compare the capabilities of a desktop computer from 20 years ago with a current smartphone). Thus, the complexity and size of the computer’s printed circuit boards has needed to keep pace.
Early PCBs mimicked the point-to point wiring of the television and radio sets of the time. To achieve this, traces of copper were etched onto one side of a glass epoxy substrate. In time, wiring density was improved by etching a layer of copper on both sides of the insulator – with soldered joins between the layers if the design called for it.
As technology progressed, copper layers were sandwiched between a rising number of insulation layers, etched copper lines became finer, and surface mount technology was used to attach components to the PCB rather than soldering a component’s wires through drilled holes.
To cater for current needs, high density PCBs with etched wires of about 100µm (100 millionths of a metre) thick are used. And flexible PCBs, where circuity and components are mounted on polyester film, are currently used – but will see further improvements as wearable technology becomes more pervasive. Continual progress in the PCB manufacturing processes, will continue to support improvements in component and wiring density, circuit board flexibility, and the physical constraints of electrical signals speed and the ability to handle high loads of electrical power.
The impact of these two influences
Let’s turn now to the current, and potential, impact of the climate change megatrend upon the rental, hiring and real estate industry.
One area of importance in any advanced or developing economy, is the construction industry and what it creates. The ravages of extreme weather events will lead to the construction of climate resilient buildings, facilities and infrastructure for both private and government sectors. Associated with this increasing demand on construction equipment to support these projects, will be requirements for this equipment to be climate friendly. For it’s not just the operations of any of these structures that will be required to have low-carbon profiles, but also the construction phase of these structures.
This requirement for leased machinery that operates with both low emission energy and materials won’t be limited to the construction industry. Consider too, that the push for similar low emission profile equipment will be felt across the agriculture, transport, industrial feedstock production and other industry sub-divisions.
Either supporting, or driving, this shift is the risk profile that insurance companies are willing to bear. This will obviously have an impact upon the equipment that is both available and able to be used. Government contracts, and other market makers, may well lead in this requirement.
The operators of industrial, office, residential and retail properties will be under increasing pressure to provide carbon-suitable properties for their clients. As energy use in buildings makes up almost 18% of global emissions, the use of green building rating systems will become more important. Systems such as LEED in Europe and the USA, Green Star in South Africa and Australia, and CASBEE in Japan will be critical in providing reference points for decisions that the operators will be making.
A similar situation will be faced by those offering fleets of passenger and commercial vehicles for rental. These fleets, whether by government regulation or consumer demand, will be shifting to either electric or hydrogen power. The flow-on impact from this shift in engine power sources will largely be felt in those providing maintenance services to these companies. Some cost reduction estimates are in the order of a third – for example, electric vehicles don’t require regular fuel filter and oil changes, as well as repairs to major systems such as the combustion chamber.
Another area of this industry division is the leasing of intellectual property. As the transition to a low-carbon economy occurs and as the natural environment changes IP, such as patents and trademarks, that are associated with this emerging situation will become more valuable. While seemingly insignificant, at about 0.5% of global GDP, the ability to earn replacement royalties and license fees from new tranches of research and development will be a critical response to the changes ahead. For example, global income for local companies may arise from discoveries about new sea-wall materials and construction processes. Or even in medicines for those who suffer from new diseases as the regions were they live become warmer and wetter.
Secondly, the global megatrend of computerisation.
As with other industries involving physical equipment and structures, digitisation and digitalisation are used to provide both operating efficiencies and to expand income streams.
The opportunities for digitisation, the conversion of a physical parameter to its digital representation, abound. Functions such as location tracking of a fleet’s individual vehicles and the ability to remotely monitor construction equipment performance become feasible through the use of an increasingly wide variety of sensors and other computing equipment.
This digitisation of the physical, which can be placed under the IoT (internet of things) banner, also applies to properties in the industrial, office, residential and retail space. So called “Smart Structures” provide operators with readings of the environmental conditions and the structure’s response. For example. temperature, humidity and wind speed as standard measurements. Human presence for controlling an office’s air-conditioning, lighting and window shading. Traffic load and speed in the case of bridges and roads.
Digitalisation, the use of digitisation and computer technology to improve business process, is applicable to all sections of this industry. Efficiency, for example, can be achieved in the construction quoting process – where gathering pricing and availability information from equipment providers can be used to reduce the time it takes to respond to a tender.
Likewise with revenue streams. Organisations could use specialised market platforms to offer IP licenses to new customers. Where the potential users of the product or process could be located far from any of the typical regions that customers reside.
As with almost any sector of the economy, the more information that is available and the better that information is used by businesses, the more efficient and responsive they become. As a new generation of employees rise through the ranks over the coming years, organisations that allow those with born in a digital-native society to apply their skills will prosper.
So. As with other industry divisions, we can see that the global megatrends of climate change and computerisation the impact the rental, hiring and real estate services industry for the foreseeable future. Climate change will primarily be felt in terms equipment being made available for hire and the carbon profile of buildings that are operated, whereas computerisation will mainly have an impact upon the efficiency of operations and the ability to find new revenue streams.
What are your prospects
From the preceding, and from a career perspective, there are several observations that can be made:
If you are more the “get it done” type: you’ll be providing equipment and machines with low and zero carbon usage. They will also have greater digital functionality
If you are more the “thinking” type: there’ll be more data and a greater need to analyse data from a systems perspective in order to manage operations, customers and regulations. You’ll be needed to research the latest in responses to climate trends in the sectors you support
If you are more the “creative” type: you’ll have opportunity to use specialist internet platforms to create and find new markets for IP. You’ll have opportunity to find low and zero carbon equipment for the sectors you support
If you are more the “helper” type: you’ll be needed to support individuals in the transition to a digital-first way of operating
If you are more the “leader” type: you’ll need to be very comfortable with leading people in an industry that will become more disrupted by weather events and with competitors that are becoming more efficient and responsive due to computerised operations
If you are more the “structure” type: you’ll be faced with not only changing regulations, but also changing market dynamics
Overall, from a career perspective, in the years ahead you’ll need to comfortable with an industry that is in a state of transition. Importantly, the two global megatrends covered in this article are shaping the sectors that that this industry supports.
And from a business perspective, like with other industries, when it comes to responding to climate change it is all about mitigation (ie. shifting focus to reduce risk) and resilience (ie. fortification to handle risk). With respect to computerisation, the road ahead is all about automation and the use of data. So, for those operating within the rental, hiring and real estate services industry, likely business prospects are along the following lines:
Mitigation: support property decarbonisation operators, seek low-carbon insurance products
Resilience: diversify IP portfolio, monitor changes to building codes
Automation: use industry IT standards to streamline processes , improve asset IoT functionality
Data analysis: encourage usage of data, implement digital monitoring of equipment
Overall, and quite obviously, for businesses there are both risks to be aware of and opportunities to exploit in the change that is happening.
The rental, hiring and real estate services industry, like all other sectors of any economy, is being affected by the global megatrends of climate change and computerisation. Not only will these phenomena continue to change this industry, but as this industry supports other industries – what happens in other sectors will influence it. While competition, in response to these megatrends, will cause change from within. External sectors will respond to these same forces – driving the industry to change.
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