Industry Trends One of the attributes of a professional education is the ability to apply lessons learned to new situations. Certainly, design firms are facing new situations that will have a major impact on their professional status and business operations. • In 2030, about half of the buildings in which Americans live, work, and shop will have been built after 2000.
From the industry movement toward integrated design and construction and building information models to marketplace demands for energy-efficient and sustainable designs, to security-conscious installations, to absolute contractual responsibility, the evolution of the design professions seems to be accelerating. This evolution, while providing the opportunity for enhanced services and innovative solutions, also may result in the dissolution of some professional service firms. While the past provides limited value in assessing the long-range future risks of providing professional services in a dramatically changing market, applying the benchmarks of claims and losses can assist a firm in positioning itself for near-term changes and opportunities. Need to Recreate the Built Environment There are many expert predictions for a strong and growing economy with an increasing demand for design services. The predictions, however, are not consistent as to what areas will be long-term growth centers. All predictions, however, indicate that the need for capital spending for new infrastructure and buildings and other productive resources in general is enormous. Most experts recognize that energy efficiency will be a driver of design. All recognize the changing demographics of the United States and the rapid development of many international markets. One long-range analysis published in 2004 by the Brookings Institution stated that while there is not a general sense of how demographic, household, market, and industry trends will require newly designed and constructed facilities to accommodate future growth, the need is apparent. The study, Toward a New Metropolis: The Opportunity to Rebuild America (Arthur C. Nelson, The Brookings Institution Metropolitan Policy Program, brookings.edu ), predicts the overall estimated demand for new housing, commercial, and industrial space over a 25-year period. Among the report’s findings are the following:
• Most of the space built between 2000 and 2030 will be residential, with the largest component being homes. • On a percentage basis, the commercial and industrial sectors will have the most new space, with over 60% of the space in 2030 being less than 30 years old. • Overall, most new growth will be in the South and West, with much of the West experiencing a doubling of space by 2030. • States with a strong industrial presence will see the largest amount of growth in industrial space. For instance, by 2030, 70% of the industrial space in the Midwest will be less than 30 years old. In 2030, about half of the buildings in which Americans live, work, and shop will have been built after 2000. - Toward a New Metropolis: The Opportunity to Rebuild America
Changes Caused by Economic and Demographic Pressures
The need for new facilities in the U.S. is well documented, and the international demand for projects is intensive. It is clear, however, that this massive expansion of the built environment will not take place along the same lines as in the past. The two major forces that will have the most significant impact on design firms are demographic changes and the rapid change in how projects are financed, designed, and constructed.
5 • From Risk to Profit - Benchmarking and Claims Studies
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