The past twelve months have been anything but normal, in fact, 2021 could go down in history as the first year of the "new normal" as we came to terms with a pandemic that is reshaping the world. While 2020 will always be seen as the year that rocked the world with restrictions, and lockdowns, 2021 will be the year we accepted COVID as a challenge to overcome by adapting the way we live and work in the new public health reality. Now, as we move into 2022, we can begin to analyze the data and trends to see what the next year holds for the smart building sector.
Perhaps the biggest evolution in buildings during the pandemic has been the continued trend of remote work and how that is establishing itself as a long-term reality for modern society. Before the COVID-19 pandemic, the US workforce spent just 5% of their total working time remote from the office. By the spring of 2020, that figure had risen to 60% and remained at a similar level well into 2021 according to a special report by The Economist. In Europe, 89% of companies in the Owl Labs’ ‘State of Hybrid Work 2021 report claim they intend to develop a hybrid working model for the post-pandemic era. While progressive governments like Portugal and Germany make it mandatory for employers to offer remote work to any employee that wants it.
“This is not just a health and safety measure in response to the ongoing pandemic, these are permanent policy changes in response to long-term trends that were accelerated during the crisis,” we wrote in an early-November article. “Freelance work emerged as a major labor shift after the 2008 recession, full-time remote workers were a growing force over the last decade, Scandinavian nations have long been experimenting with 4-day work weeks, and digital nomads have flooded the internet with photos of laptops on beaches. The last decade has proved that there are health, wellbeing, comfort, and ultimately productivity gains to be found in remote work, and hybrid work models appear to be the best way to unearth them.”
In 2022, we will experience the next stage of acceptance for remote work as more and more companies develop hybrid working models to suit all their employees and create resilience for the ongoing crisis. Hybrid work will take many forms but as the process of acceptance continues we will begin to see more and more companies downsizing their workspaces to reduce costs and create new revenue streams. This consolidation of office space will require occupancy analytics technology, however, to provide the data that shows employers exactly how many workers will likely be in the office at any given time. Meaning smarter buildings will get a head start on this evolution, which will, in turn, drive the adoption of smart tech in office buildings.
“Given the level of detail required to truly optimize hybrid work models, large buildings today will only really know how to manage their hybrid working models with occupancy analytics data – anything else would now be considered guesswork,” we wrote in a late-November article. “However, while hybrid evolution may be the driving factor, building owners and managers who adopt occupancy analytics will also find an array of new applications at their disposal. The benefits of occupancy analytics are as broad as the smart buildings themselves; it provides a layer of data intelligence on all systems to support health, safety, security, efficiency, and productivity. Occupancy analytics also opens up a whole new world of occupant-experience focused applications.”
There has also been a strong environmental tone to economic recovery efforts with progressive governments and companies reacting to public pressure not to neglect the climate change challenge during the COVID crisis. In some ways, the emergency mode of the pandemic has allowed us to place an even greater focus on climate change mitigation through green economic recovery programs. Buildings were on the agenda at the COP26 climate summit in Glasgow in November, suggesting that building energy efficiency will not be ignored by the international community as a critical part of solving the existential environmental crisis.
“The greening of society is driving client commitment and experienced design teams are increasingly available as the smart building market matures, but the COVID-19 pandemic has created a complex budgetary landscape across the commercial real estate sector. We have been trying to tackle climate change for decades and now we expect to succeed while still battling the pandemic and facing a deep global recession,” we wrote in a September article. “While the post-pandemic recession will impact budgets, the green recovery will focus funding and regulations on environmental goals to at least maintain the fight against climate change during the downturn. The pandemic has presented an opportunity to rebuild, and smart building energy management embodies that green recovery.”
The continued uncertainty of the crisis forces us to predict carefully but our analysis suggests global growth of BIoT in smart commercial buildings at 11.6% in the best case, with overall market revenues rising from $42.8Bn in 2019 to $82.7Bn in 2025, versus 7.3% in the worst case, with more modest total revenues of $65.2Bn by 2025. Through the emergence of hybrid work driving the adoption of occupancy analytics, the need for greater health and safety standards in all commercial buildings, and the rising environmental pressure for building efficiency, 2022 promises to be a big year for a smart buildings industry well positioned for that best-case scenario.