Paul Unger Editor PlaceTech

Editor’s note: Is tech recession proof?

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Paul Unger

Will the property industry cut innovation budgets in the recession or will a crash trigger a drive in adoption?

Evidence for ­­both sides stacks up depending on which study you read. Research quoted in this month’s Harvard Business Review found that a recession encourages adoption of new technologies. One reason is that employers are able to recruit workers with better computer-related skills due to increased unemployment.

Other researchers add that companies with reduced activity have spare capital to deploy on tightening ­up procedures, adding transparency and data analysis to better understand their position and boost efficiency through automation – all areas where digital transformation can help.

There is also the view held by some that “the greatest inventions happen in war”. The pressure and urgency felt in hard times forces innovation through organisations, ‘we have to try something different’.

Those predicting a reduction in spending might respond that when times are tough bosses slash at the non-core overgrowth and stick to what they know, doing things in the same way they have always known, pre-digital practices will be the default.

My own Twitter poll of 40-odd people – not likely to trouble the professors of Harvard any time soon –counted more people who thought there would be a decrease in spending than felt there would be an increase.

This surprised me as I have always believed, perhaps naively, that the overwhelming benefits of modernisation in industry will insulate tech from the chop. Companies will be keener to cover themselves in the latest armour, that didn’t exist a decade ago, against recessionary blows.

All this is academic to a degree. Negative circumstances are everywhere to be seen but there is no global recession. By now the UK should be out of Brexit, chaos ensues in politics, and not just here. The domestic investment market has frozen due to nervous indecision. There have been forecasts of a crash in China that would spread around the world and, while it is cooling, it hasn’t nose-dived. There are warnings daily of shrinking profits in the US and a tech bubble illustrated by the wave of IPOs for loss-making arguably over-hyped unicorns. Yet economies remain largely buoyant.

The longer this remains the case and we continue to see increasing numbers of property players testing out innovation, then the greater the likelihood they will see the benefits before the market tide turns for the worse. The greater the chance of tech budgets surviving if adoption has already begun.

As in so much where business is concerned, timing is everything. And not all proptech will be worth keeping. There is good tech and bad tech.

Whether you have worked out the difference in time will depend on what you do now and with whom.

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