The Next Real Estate Crisis
April 4th, 2008by David Barnes, Vice President, Strategic Analysis
OK, I know you were expecting me to blog on “Helicopter Ben Plays Whack-A-Thon.” I almost did. Lucky for you, I discovered a more interesting topic with an equally catchy title.
At our US FPD Conference, I was impressed by a keynote from Dr. Chung of Samsung SDI. He used an analogy developed by Rolf Jensen of the Copenhagen Institute for Future Studies in the 1999 book titled The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business. The thesis of the book is that people use rational thought assisted by computer technology, when making decisions, yet we are beginning to see evidence that the stories about products or policies affect our choices as much or more than the data does. For example, Mr. Jensen points out that technology has enabled mass production of chicken eggs at low cost and high quality but consumers are increasingly willing to pay 20% more for free-range chicken eggs. The story or emotion surrounding free-range eggs involves the treatment of chickens and sentimental feelings about traditional farms. In some European countries, free-range eggs have taken 50% of the market despite higher prices. Free-range and mass-produced eggs have similar qualities, so demand for free-range eggs signifies the heart is winning over the brain. One of many implications, in my mind, is that life-like display technologies will have a huge impact on consumer emotions if image processing and social networking software support it.
Any of us that have done business in Italy will recognize the importance of emotion. I therefore found it interesting that 2,000 IBM workers in Italy staged a virtual protest against a new pay package in Second Life, a virtual world on-line. The head of IBM in Italy resigned and workers got a new deal. The president of Microsoft France presented an award to the protestors for novel use of the internet. In my mind, it may take time for Ford workers to leverage the internet in similar ways but I suspect political activists in the Philippines will find the transition from political action via texting to politics in virtual worlds a shorter step.
The formation of OpenSocial as a development framework for social networks outside any walled garden like Facebook or MySpace has the potential to make social networking a simple extension of email—which may also be free—like Mozilla’s Thunderbird 2. History suggests that consumers will break out of any walled garden because the value of networks increases non-linearly with the number of people involved. Besides, the grass always looks greener on the other side of the fence.
As social networks weave their way into the internet and become a natural extension of today’s email or chat behavior, the influence of more realistic images on handhelds, notebooks, desktops and TV sets will grow. How long will it be before virtual world software becomes standardized and integrated? Imagine the real estate crisis that might occur in Second Life if anyone can build a virtual world of their own! Children today may grow up to own their own piece of cyber space where they can express utopian ideals, protest policies or do business. In this scenario, the “land” would be free and its social value would depend on the emotional experience developed on it. Display technology will be out of this world.
