Real estate and the economy in 2020 – online jobs and your career – op ed

Obama’s supposed gaffe

The Right has taken to blasting Obama on his misunderstanding of business and the economy, which to be quite honest, is an easy target given our current state of affairs. Believe me when I say that President Obama typically loses me after the words good morning, good evening, or “My fellow Americans,” but what most are calling Obama’s latest gaffe actually resonates more strongly than most would give him credit for.

We’re not just losing jobs overseas, we’re shipping jobs to the internet and to deny this reality is a failure to understand the fundamentals of business. Better examples than President Obama’s ATM reference in his June 14th interview with NBC’s Ann Curry might be real estate, the travel industry, and in many cases, the retail sector. The fact is that jobs are moving online faster than ever before, and this phenomenon is really just heating up.

The international workforce

Zappos, for example operates on an Nth of the workforce a FootLocker chain operates on, and more likely even less of a total operating budget. A local FootLocker store operates via micro market conditions and prices their shoes based on those conditions, whereas Zappos has a macro target and can, in some cases, charge more for shoes with a global demand. FootLocker’s only option is to compete online and to reduce storefronts to one location in a central market versus five stores spread over that same market.

This is happening in virtually every sector of our economy and this transition is easier for some industries than for others. Very quickly, the web in general is learning habits and patterns of the American consumer and beginning to make smarter suggestions designed to assist in making decisions. The Decision Engine Bing by Microsoft instantly springs to mind as it attempts to remove the sales person and insert your sphere of peers, giving you options at your fingertips. Another site that comes to mind is PriceWatch.com where I will not step foot into a retail store to compare prices or specs on a computer I’m interested in buying, rather I will just press enter and take advantage of free next day shipping. Sorry Fry’s, sorry Best Buy, and you’re welcome Geeks.com. Why Geeks.com? Simple- lower overhead means lower prices until it doesn’t, but for now, my machine is $100.00 cheaper with the same specs.

The shift – disintermediation

No, I think President Obama rightly points out a shift we in real estate have been talking about for years, and it’s a long word many do not know, but that word is disintermediation. The smarter our technology becomes, the more dependent we get. For example, Scion aims to prove that one day with their “build your car how you like it and it arrives in four to six weeks at your door brand new” concept. The idea is infant today, but you can see where Scion will inevitably reduce their dealership footprint across the country, thus reducing overhead and giving them a nice increase in profits. Are there still jobs in manufacturing? Of course there are, but what of those administrative and sales jobs at the dealership, the maintenance of the facility, the lot porters, or even the management team? They’re gone. Instead, you see something like a Fiat Dealership kiosk anchored to a local mall where one can ask a $10 an hour clerk for a test drive, or scan a QR code for the details and a list of what other’s liked.

I wittnessed this in a local Finish Line store this week where I no longer needed a sales clerk, instead, I scanned the shoes’ QR codes and got the details and other options that were only available online. Retail is slimming down the store front model as witnessed in Target stores where the full line of most products is only warehoused online via Target.com. Commercial real estate is already feeling these realities, as soon, Target stores are reducing their outliers to more centralized “come touch it and order it” convenience type stores where you pay more for instant gratification.

In real estate, as online suggestions become better, that sort of online suggestion of ‘you might like this home‘ with a recommendation of ‘buy now as this is the optimal pricing for this home in this area‘ comes to fruition, that “can do” American spirit prevails into a transaction that needs fewer people to manage. Online lending, online title, and online everything reduces even further the need for human interaction, because we’re simplifying the management process for consumers. What once may have been feared is now looking more and more like an app yet to be crafted by some kid at Harvard looking to connect these people and those people or even to get peers to rate them.

Obama was correct

President Obama wasn’t wrong, he’s right, there is a shift in the economy that is like strong current in a river. Innovation is not a new challenge, it’s an old one, except that it now moves at the speed of a smartphone. The answers lie not in fear but in looking ahead to the challenges of an ever expanding market place to find your place, and the President rightly brings it front and center. The question is, how does a nation or Wall Street harness it? Do people really think an ATM disrupts jobs? It only doesn’t disrupt if it takes more people to maintain and operate the ATM than it does to simply walk up to a teller in your bank. One of them pays more, one of them is more qualified (or now over qualified) and the list goes on and on.

I haven’t looked lately, but I wonder where those ATM parts are engineered and created- is it all done in Boise? Somehow, I bet if you look really closely, they’re made in China. But Obama and the right needn’t worry, ATMs are also on their way out if you have a smartphone, cash is becoming less and less necessary, just simply swipe your phone to debit your account.

In further researching this, it’s hard to tell what President Obama has seen in actual numbers of jobs being lost to modernity and our need to be speedy, but looking globally, not just at your industry in a vacuum, it’s a lot… and only trending more and more that way. Why ship a job overseas when you can ship it online at a fraction of the cost?

How many editors will this article see before publishing? One. How many will will it take to print and distribute globally? Zero. How much does it cost to syndicate it? Only the willingness of the consumer to share it for free. In essence, zero jobs were created to send this post around the world. Sorry, newspapers. Welcome to 2020.