This month’s Research in Focus highlights NYU Schack’s very own Professor Scott Robinson, covering findings in his recent research The Digital Infrastructure: The Impact of 5G and Edge Computing on Real Estate. Scott Robinson, Co-Head of Real Estate and Lodging at Oberon Securities, provides a deep review into the antiquated real estate industry’s transition into the 21st Century digital economy. Robinson begins his analysis detailing the shift businesses and consumers underwent when augmenting their physical activities and engagements digitally as a result of the coronavirus pandemic. This conversion, Robinson states, necessitates robust digital infrastructure whereby further distributed networks are likely to be adopted to facilitate this omnichannel (‘the hybrid physical-to-digital approach’). Since much of the infrastructure in our networked and digital economy consists of “real assets”, Robinson argues that real asset investors and investment vehicles should be retooled to support this growth. “Everything from automated transactions, smart manufacturing, smart buildings, IoT, and autonomous transportation will all be connected through wired and wireless networks, the information will be stored in advanced data centers, and all these endpoints will be managed through an array of consumer and enterprise applications”.
For the non-technical reader, Robinson voluminously provides a history on the technologies disrupting our world, everything from how and why transmitting “bulk” data wirelessly matters, the importance of 5G’s improved transmission speed, and culmination into Edge Computing. The combination of 5G’s ability to increase transmission speed and low latency (millisecond measure of delay in data transmission), coupled with Edge Computing’s role in enabling better data control and truly continuous/real-time operations, has the potential to reshape and accelerate entire economies.
This new technology will affect nearly everything in our daily lives whereby Robinson names Streaming Services, Smart Homes and Smart Buildings, Factory Robotics and Autonomous Vehicles as immediate beneficiaries. Its impact on real assets is nothing short of outsized as the property sector rushes to embrace this technology. A seemingly never-ending source of uses for this technology ranging from Architectural, Engineering, and Construction uses, to Municipality-level applications, to PropTech on the operational and building management side. The property sectors immediately embracing this new technology, Robinson mentions, are the Office and Industrial sectors. The real estate industry is responsible for 13% of US GDP but 40% of Co2 emissions. 5G and related infrastructure produces healthier buildings in the office sector by “improving ventilation and air quality measurement, the integration of blockchain, AI, and machine learning allows organizations to measure greenhouse gas emissions and consumption data more accurately”. The e-commerce explosion displaces the brick-and-mortar retail, and begets efficient industrial logistics, taking form in stacker crane mobility allowing for more vertical storage space, while robotics allows for the movement of these pallets and crates around the warehouse floor. 5G and Edge Computing maximize throughput and resolve congestion in real-time.
The technologically driven paradigm shift in the 21st Century will ultimately disrupt all forms of society, though as Robinson incisively identifies, the prominent culprit of the disruption will occur behind the walls of the worlds ‘built-environment’.
See the following link for the full research paper: The Digital Infrastructure.
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