Up until the past year or so the primary driver behind investment in smart building technology was cost reduction. Smart heating systems optimized heating based on occupancy, motion sensors ensured that lights weren’t left on without inhabitants, motorized window shades minimized the impact of direct sunlight on air conditioning, and smart security systems reduced the chance of crime during off hours. Despite these cost and energy saving technologies, though, beyond system-wide HVAC optimization, most offices today are manual: we switch off lights at the end of the day, leave monitors on all weekend, and lock the office with a 19th-century key. To understand the lag in smart building adoption from both the tenant and the landlord perspective, NewtonX issued a smart building survey to 500 commercial building landlords in New York and Los Angeles, as well as 500 senior office managers at companies with 100 employees or more in the office. The insights from this survey informed the data and projections in this article.
While growth in the connected homes market has been steady since 2016, it has yet to undergo explosive growth or see strong household penetration. For commercial buildings, however, the size of the smart office market is expected to double over the next five years, from $22B to $46B in 2023. NewtonX survey results strongly indicated that new research on employee productivity and wellbeing may push building managers to adopt IoT as a productivity-boosting measure and a boon to attract talent.
Good Office Climate, Good Office Results
Bio-adaptability systems can improve employee productivity and energy levels by optimizing office climate. For instance, lights can adjust their color spectrum throughout the day to fight ocular fatigue and mimic the circadian rhythm. Additionally, HVAC systems can monitor air quality, which would eliminate the fatigue-inducing effects of bad air quality or CO2.
Smart office buildings also simplify office tasks, including guest registration and real-time conference room booking. Asset tracking can also be used to keep track of crucial equipment and ownership of equipment (such as a medical device or even just a shared computer). Even elevators can be optimized based on employee calendars to direct and take employees with meetings on the same floor together. These small adjustments to office life can streamline basic processes, thereby improving employee productivity.
Finally, smart offices attract top talent, particularly in the high tech sector. They improve comfort, alertness, and, according to some survey respondents, even happiness (due to light changes that combat seasonal affective disorder).
Employee Efficiency Drives Energy Efficiency: A Win-Win for Employers
While employers save money through attracting better talent and improving employee productivity, landlords and employers alike can also realize immense cost savings from improved efficiency in smart offices. For instance, the 52-story New York Times headquarters in New York uses an integrated IoT system that aligns lighting controls, motorized window shades, and LED drivers to optimize energy consumption while also improving the office experience. The system resulted in a 70% energy savings.
In the U.S., buildings consume 47B gallons of water daily, and HVAC systems are typically responsible for 44% of this energy consumption. Smart HVAC systems that integrate with other IoT devices such as smart blinds and dynamic temperature monitoring based on occupancy could save tenants and owners millions.
That said, many are still reluctant to adopt smart office systems based solely on energy savings — particularly since the ROI is not immediately felt. Because of this, suppliers will need to rely on the combination of worker productivity and energy savings, rather than just one or the other, to convert both tenants and landlords. In the short term, the popularity of small office IoT items such as smart outlets and connected switches will grow until suppliers are able to offer a unified ecosystem that is both intuitive and comprehensive.