PROBLEM IS POTENTIAL
“Problems are opportunities for creativity and innovation.”
Jeff Bezos, founder and CEO of Amazon
CONSUMER PROBLEMS
A home is the foundation of every person's life, a warm haven and a manifestation of our individuality. Indeed, a roof over one's head is not a luxury, but a vital necessity for every one of us, that is, for 100% of the world's population. But here's the problem: about 70% of us stand aside from the real estate market, not because they do not want to have their own home, but simply because they cannot afford it. And in the end, this dream of one's own corner becomes unattainable due to the lack of money and the opportunity to take out a mortgage with sky-high interest rates.
Those 25% of the population who are more fortunate, and who have financial means or the ability to use banking services, also can't feel secure. The selection and purchase of ready-made real estate or the construction of one’s own home is stretched out over many months and even years, costs a large sum and requires specialized knowledge so as not to be deceived. So much housing on the market turns out to be of insufficient quality and imposes too many demands and corrections on future owners, which they will have to make after the purchase.
The whole process is further complicated by the fact that construction involves a huge number of participants: developers and builders, brokers and agents, designers and engineers, salespeople, suppliers and manufacturers, lawyers and accountants, managers and consultants, logisticians and so on, and a huge number of intermediaries between the aforementioned roles. Each of them plays their part in creating the home of your dreams, and if only one detail is out of place, it can disrupt the entire chain and lead to consequences as disappointing as they are painfully expensive.
And then there is the "human factor" – after all, creating a single piece of real estate requires thousands of small and large elements, from a "nail" to large technical systems. Hundreds of interconnected processes and people, where one person's error can lead to the failure of everyone's work.
INVESTOR PROBLEMS
Investing in real estate is traditionally seen as a reliable way to preserve and increase capital, but for the 5% of the population who are investors, this asset type is not without significant problems. The main difficulty lies in the low yield of investments combined with insufficient transparency and high risks, similar to those faced by buyers.
The inefficiency of the construction industry's systemic nature creates a vicious circle: the complexity of construction processes and their insufficiently effective coordination are exacerbated by a large number of intermediaries, inevitably leading to extra costs. As a result, the final price of a real estate property can be inflated to unjustifiably high values, reducing the potential income for the investor and making investments riskier than originally expected.
Moreover, to profit from investments in real estate, investors need to consider the commercial use of the property: sale, rental, or starting their own business. This, in turn, makes the income of investors heavily dependent on the overall state of the market and the needs of buyers or renters. Therefore, if the real estate market is in a downturn or there are liquidity issues, investors may face periods of no income or even loss of part of their investments.
Only those investors who delve deeply into the study of the construction business and the real estate market, constantly analyzing potential risks and evaluating growth potential, will be able to avoid pitfalls and achieve stable investment results. But it's a path fraught with failures and mistakes, and not everyone is willing to take it, especially given the current market conditions.
Thus, the problems of the real estate market for investors are multilayered and conditioned by a whole range of factors: from the high cost and complexity of entering the industry to the risk of capital loss due to market instability and unpredictability of demand. These complexities require investors not just capital, but also deep knowledge and strategic vision to successfully navigate these challenging waters.
PRODUCER PROBLEMS
The issues facing "producers" in the real estate market are extensive and multifaceted, affecting all participants in the process, from developers and builders to accountants and managers. Their primary concern is low sales, driven by lengthy business processes. Such dynamics require constant planning and adhering to a "planned economy," sensitive to demand fluctuations and banking interest rates.
Only a third of the population is actively involved in the real estate market, while the remaining 70% are either deprived of access to real estate or interact with it very infrequently. Competition is high but not always rational: producers are compelled to invest significant resources not in product improvement but in marketing and advertising. Inefficient intermediaries add complexity, complicating the already challenging interaction between manufacturers and consumers.
The lack of a unified, self-updating, and efficient system capable of considering the interests of all participants is a stumbling block to improving the situation. Such a system should cover planning, analyzing the needs of all parties, and subsequent organized implementation of the set strategy. This would minimize the current market problem: the detachment of the "producer" from the end consumer and the inability to correctly allocate resources among different aspects of production and sales.
GLOBAL PROBLEMS
We live in a world where technology enables us to look across the globe with just a single click, and at the same time, billions of people in that very world are fighting for the basics—food, shelter, safety. The paradox is simple: the lack of resources is not a consequence of their absence, but the result of inefficiency and inequity in their distribution. Global problems like hunger, poverty, and homelessness are not isolated issues but interlinked nodes in one extensive system of challenges.
Living in the era of information technology, we confront statistics that prompt us to think deeply. Take hunger, for instance. As of the end of 2019, according to official UN figures, 821 million people were suffering from hunger—that's one in every nine people on Earth. Post-pandemic, these numbers have only increased. The UN estimates that to resolve the global hunger issue on Earth within ten years, an investment of 237 billion dollars in World Agriculture is necessary. Yet each year, we, the inhabitants of Earth, watch and pay for food advertising amounting to 500 billion dollars and waste 400 billion dollars worth of food. We cannot find and allocate 237 billion dollars but squander 900 billion dollars! Isn't this absurd for the "Rational Human in the 21st Century"? Hunger isn't an isolated phenomenon, often linked to poverty, climate change, wars—a list of global challenges, each with its own "resolution price".
Similar to how homeless people seek shelter in the most unfavorable conditions, our world also seeks refuge in stability and prosperity. At the beginning of the 21st century, we see how expensive advertising is for us—billions invested in drawing attention to products often end up being ineffective and just lost in the abundance of information noise. Meanwhile, millions are deprived of the essentials—food, water, shelter. This situation's absurdity further emphasizes that problems exist not because of a lack of resources but because of a lack of an effective system.
The paradox is that we live in a world where economic instability and inequality are sharper than ever. A systemic approach to developing technologies for using the planet’s and humanity's resources is necessary, which can ensure the sustainability of evolution in the long term and unite humanity and the planet in a more harmonious symbiosis. Artificial intelligence will obviously and to a greater extent manage science and technology; utilizing a variety of technologies and their derivatives from the blockchain, which provides data security, to quantum computers with their immense computational power. The integration of AI, blockchain, and progress in industry 4.0 and the near future—5.0, could lead to a solution—creating a universal system capable of solving complex tasks in conditions where every action of our species must be mindful of directed and sustainable development.
Such a system could unite humanity's efforts in combating global problems, providing a base for the sustainable development strategy proposed by the UN Sustainable Development Goals. Just think, if each of us participates in an integrated ecosystem based on principles of fairness and sustainability, we could optimize resource consumption and direct our actions toward solving global problems such as poverty, hunger, and the climate crisis.
Ultimately, the question before us is: can we transition from a competitive economy to an economy of cooperation and mutual assistance? The answer may lie in applying technologies that are now available and continually evolving, in pursuit of making this goal a reality.