Is It Realistic To Expect Moore's Law In Housing?
By now most are familiar with Moore's Law. This simple observation made by Gordon Moore more than 60 years ago has been the basis for the boom in computation and digitization. While some are questioning whether it is coming to an end, it certainly pushed humanity forward.
When we think about how different life is compared to what it was in the early 1960s, the two worlds are not even comparable. Our life is vastly different than what it was 30 years ago, let alone the same period prior to that.
There is no doubt digitization is affecting many areas of our lives. For example, a big portion of the retail sales world shifted to online. This is, of course, digitized. This naturally helped push costs down since warehouse space is a lot cheaper than store front.
Over the last few months, I followed some of the progress in the arena of 3-D printing. This is potentially going to have a big impact in the housing market. Construction is so vitally important to the global economy yet is very expensive. There is not a great deal of technological progress being used since the industry is basically the same as a number of decades ago.
One of the biggest advantages to technology is that it sends costs plummeting. The idea of the zero, or near-zero, marginal cost society follows this idea. As technology advances, the margins on products are squeezed. They effectively become commodities which help to reduce the cost across the board. Those companies that try to hold margins up end up losing market share for competitors who provide lower costs but equal quality.
Since so many industries are just now starting to see technological innovation entering, it will be a while before things really take hold. The construction industry is one example of this.
However, it is not too early to ask if it is realistic for us to expect a trend similar to Moore's Law? After all, we know what happened over time with computers, televisions, smartphones, and a host of other products with chips in them.
Not all followed what happened with chips. Nevertheless, it is obvious how the cost of computers, as an example, dropped significantly over the last 20 years while the products themselves improved greatly.
Could this happen in something like housing?
Many believe it is possible. A technology such as 3-D printing enables a great deal more creativity, flexibility in materials, reduction of waste, and scalability of size. Also, the printers themselves fall under the Laws of Information Technology.
This means there could be radical advancements as more companies start to innovate with this technology.
Of course, that is not the only area where things are changing. The materials sciences is also seeing a profound evolution. Computing is helping in this arena where researchers are finding they are now powered by more powerful devices that can reduce the time to create new materials.
The boom in 3-D printing actually pushed the material sciences forward.
Many will think the idea of housing dropping significantly as something that is impossible. This is not surprising since most cannot envision something that is radically different from what they know.
Nevertheless, there is a great deal happening today that was not possible in the past. In fact, much of our daily lives would be considered "magic" to someone from 100 years ago.
Expectations have a great deal to do with what actually materializes. Since we know technology can drive down costs, perhaps it is time we expect companies in industries that are "old fashioned" to advance at a much faster pace.
Within the next few years, we will have enough examples of 3-D printed homes to start putting pressure on builders. My guess is those that do not embrace the technology will end up getting left behind. It was not too long ago that retailers did not fully embrace online shopping and look at what happened there.
ultimately, those that get a start on this will find themselves leading the way. Since we are dealing with technology, it is likely we do see rapid advancement in the capabilities. This should help to drive down costs. As more companies get involved and innovate, we will likely see the snowball effect occurring.
This could eventually have an effect on prices.
Do you think it is unrealistic to expect a trend along the lines of Moore's Law in housing?
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