Today is the fifth post of the series entitled “New Economy” in which I’ll discuss the impact Google has on the economic system, and the implications for IWMS vendors.
Small is the new big
Once upon a time in retail, you had to have a store, which needed location, location, location; capital to fill it with inventory; and cash flow to hire staff and buy ads to bring in customers. (Jarvis, 2009)
Google has created a whole new economy.
The economy of the small.
Now you can find both customers and new marketplaces online at a fraction of the costs. In fact, you can run a company from your garage (Like Google did).
Yes, there will remain big companies, but they have to compete with a very large number of small-sized companies.
As the small sized companies don’t need a lot of office space, don’t need many employees, don’t need large advertising campaigns, and don’t need a lot of inventory, profits accrue fast.
Small and Corporate Real Estate
The economy of the small has its’ effect particularly on the corporate real estate (CRE) industry. The CRE industry is a perfect example of the scarcity economy.
There is only limited space available at the top locations, which makes it extremely expensive. In fact, it makes it more expensive than it should be.
Now, the corporate real estate industry is in trouble. Top locations need to compete with suburb garages / living rooms, as the economy of the small has changed working conditions.
Organizations are reevaluating their real estate portfolios, and reducing the number of square feet per person simply because it has many benefits in terms of real estate costs and sustainability.
This will inevitably lead to a reduction in the costs per square feet.
Small and IWMS
So, what should IWMS vendors learn from this?
- The strict physical separation between work and private will disappear. It means that more people want do their work from their home office. If your IWMS is not web based, you will be in trouble.
- Many real estate executives face constant pressure to adapt their real estate portfolios to changing market conditions. Your IWMS should support the constant question what-if?, and enable real estate executives to answer those questions.
- Work times will shift from the opening hours of the building to the work times of the employees. Employees need to be able to work 24×7 at any location they choose. Therefore 24×7 access to the IWMS needs to be guaranteed.
- As the cost of independence has dropped many one-man spin-offs have emerged. These independent agents can be of great value to the IWMS vendors. Companies should encourage and support some one-man spin-offs. (Jarvis, 2009)
Small and You
So what do you think about the economy of the small? How will it impact you? Please use the comment box below for your comments.
Jarvis, J. (2009). What Would Google Do. New York: HarperBusiness.