Series:The Home of the FutureKent LarsonPart A: Scenario, Creating a Home in the FutureThe home industry may look something like this in a few years:By 2015, savvy well-capitalized companies from outside of thehousing industry have taken over the market, and speculativedevelopers have all but vanished. A young couple looking tobuild a new home begins the process at one of a number ofinternet home sites, where they play design games and select fromoptions presented to them. As the system begins to understandtheir needs and values, proposals are produced for their evaluation- which then, in turn, leads to additional designs.In the process, they find that there has been an explosion ofcreative activity as dozens of young architects and industrialdesigners develop and license systems to integrators - based onnew industry-wide standards for both physical buildingcomponents and digital technologies. Systems from onemanufacturer are now interchangeable with another, similar towhat evolved in the PC industry twenty-five years earlier. Theylearn that Ikea Systems has expanded their kitchen and homefurnishing product line to include low-cost kit home componentswith Scandinavian detailing and energy saving technologies;BMW has developed sleek, modernist, high-tech housecomponents made from no-maintenance, high-performancecomposites and metals; and Home Depot and Martha Stewarthave partnered to offer fully furnished reproduction historichomes.At each step of the process, our couple investigates spatialconfigurations and options for lighting, finishes, appliances,energy producing components, and a whole host of newtechnologies - making choices that take them closer and closer totheir ideal. For several weeks, the couple spends hours eachevening in their living room discussing alternatives and exploringthe wealth of information available to them.With a limited budget but unwilling to compromise on quality,they finally settle on a small, compact design strategy developedby an Australian architectural firm with cleverly conceivedtransformable and multi-use spaces using BMW parametriccomponents. For example, they select options for the conversionof the husband's office to a formal dining area for the parties theywill host every few months, and also to a guest suite with fold-down bed for the occasional overnight visitor. They preplan aseries of additions they intend to make over time as the size oftheir family and income increases. They also attach an efficiencyapartment for the wife’s frail mother, signing up for a $49.95 permonth, 24-hour health monitoring service byHomeBiometrics.com that includes a host of robotic assistivedevices that will help her live independently.Ordering their home is no more difficult than buying anautomobile on-line. Behind the scene, software agents havealready negotiated with lenders, installers, and energy and serviceproviders, allowing the couple to precisely determine their totalmonthly cost. Rejecting lease options, they choose a twenty-yearmortgage with a twenty-year warranty and upgrade package withregularly scheduled maintenance. The shrink-wrapped, digitallytagged house components arrive on their site four weeks afterordering, and three installers connect the pieces together usingconductive, industrial Velcro fasteners. They move in two weekslater.Living in their new home takes some getting use to. With sensorarrays and digital displays embedded into most surfaces, the homebegins to discover their patterns of activity and tries to anticipatewhat they might need or want. At first, it gets it only about halfright, but within several weeks it begins to fit like a glove. Itadjusts the ambient light for reading a book in the afternoon,keeps tuna fish on hand in the pantry, monitors their nutrition, andsuggests new films that they may enjoy. It becomes a companionof sorts.Part B: Assessing the VisionHow realistic is this scenario? If it seems farfetched, this is onlybecause the housing industry is years behind others intransitioning to the information economy. Compare the housingindustry to others:Most major companies outside of housing competeinternationally, with innovation on one side of the globe instantlyrippling across to the other. New materials, technologies, andprocesses are adopted in just months. Industrial behemoths havebecome lean, agile, integrated, and digital - they tap informationin real time . . . . In housing, competition is primarily local,processes are labor intensive, and innovations take an averageseventeen years to find their way into homes. More sophisticatedtechnology is found a $39.00 Furby doll than in many newhouses.We assume that this year’s cell phone or disk player isdramatically more useful, higher quality, and less expensive thanlast year’s. Customers are demanding more for less from theirproducts - and getting it . . . . Except for the vanishing smallpercentage of homes designed by architects for individualadventurous clients, the U.S. housing industry produces variationsof the same low-grade, standard product that it has been makingfor the past 50 years. There is a perception that housing gives youless for more with each passing year.Companies making products from cars to clothes have becomecustomer-centric, selling lifestyle and fantasy. Whimsy andpleasure are often as important as function and features. Manyhave “disintermediated,” cultivating a relationship directly withconsumers. The Ford Motor Company has decided that Fordismis outdated, with “mass-build-to-suit” to replace mass-productionfor the customization of cars in the future. Sophisticatedcompanies are selling services, systems, and experiences – notcommodities . . . . Speculative homebuilders still market a handfulof “one-size-fits-all” commodities on a take-it-or-leave-it basis.Rather than helping to create experiences and pleasure – a stageset to play out one’s life – developers are creating mostly banalboxes.New Rules of the GameBut the rules have recently changed in the housing industry,creating risks for companies stuck in the old ways andextraordinary opportunities for those who know the new game: 1)the internet, information technologies, and powerful computationhave created a new alternative to factory or site-built mass-production models: mass-customization, 2) labor-intensive, siteoriented processes are increasingly unworkable in a hot economywhere skilled labor is expensive and scarce, 3)