MANY US ARCHITECT ENTERPRISES - GONE IN FIVE YEARS?
Things are changing fast in the architectural profession and they are going to be changing even faster during the next five years. Many architecture firms currently have business plans that will not allow them to make it to the other side. You should probably consider changing your business plan now to assure that you are still here in five years.
It is an obvious fact that office buildings are failing. You can stay with them and suffer the consequences, or find another way to work. Some office building owners are closing down or repurposing facilities. Other office building owners are slipping into insolvency and bankruptcy.
Lenders try to pass off failing office buildings as being due to high interest rates, and at some point interest rates may come down, but the problem is probably mostly not related to interest.
People are spending a lot of time and money, supporting their places at work in office buildings, and they are not getting compensated for those expenses. Increasingly, office workers are negotiating work at home deals with their employers.
The costs to companies of leasing office space and providing and maintaining furnishings, fixtures, equipment and office based computerization and communications is becoming increasingly unaffordable, which is made worse by employee absenteeism resulting from more work at home activities. Let’s look at the issue in more detail.
Assume a 40 hour work week Monday through Friday and an average commuting time from home to office of 48 minutes one way. That is one whole eight hour business day per week, just moving people around from home to office and back.
All time spent at the office means that floor area at home sits idle and unused. All time spent at home means that floor area at the office sits idle and unused. This does not include other time spent away from the office on business trips, attending conventions, vacation time or medical leave.
All time spent commuting means that floor area at both office and home sits idle and unused. These losses are staggering, but up until the year of the pandemic no one paid much attention. When an employee lives and works all in in one place it not only saves a whole business day per week in commuting time, it allows the employee opportunities to mix and match or combine hours for working with hours for managing responsibilities and leisure at home.
Once employees begin working at home they join an environment of colleagues from countries all over the world, who are doing the same thing. Constraints on distance disappear, and employers soon find that it is possible to utilize qualified resources for labor located any place in the world and that is happening.
The National Council of Architectural Registration Boards allows qualified architects in countries all over the world to present their credentials, take the US Architectural Registration Exam, obtain NCARB Certificates and reciprocate with most of the States and Territories of the United States to become licensed architects.
Compensation for architects and architect firms in countries with still developing economies are sometimes at a whole order of magnitude lower than that paid in the United States.
US based architects, including CEOs, will begin, some already have, to resign from their firms and operate as lone wolves, leading international wide area networks. One former CEO of a hundred plus personnel firm in Dallas, Texas, now a lone wolf architect, told me that he interfaces with his clients in a very quiet and confidential manner. He said he has clients now who don’t want to go anywhere near a conventional architectural firm for fear of getting their projects hacked by other members of the firm.
Other former CEOs, indeed architects at all levels, may increasingly be forming strategic partnerships with offshore architects who function as architects of record for projects in the United States. Dropping rates of compensation will begin to make it economically impossible for US based architects to continue to function as architects of record, to occupy office buildings and carry internal staff. Lone wolf architects can manage everything in a series of online relationships, i.e., virtual enterprises. US architects who attempt to continue practicing without offshore architects of record as strategic partners and who continue to operate in office buildings with internal personnel will risk losing market share and fading into oblivion, insolvency and bankruptcy and I think this is starting to happen now. Current sole proprietor architect practitioners, if they stay on top of exploding and emerging technical skills and opportunities, could win large portions of market shares now managed by some of the biggest AE firms in the world, which is exactly what former CEOs of many of those largest AE firms in the world are and will be doing. Sole proprietor architect practitioners and those former CEOs will find themselves on the same leveled playing fields.
I think it will be vital to get your hands around the control and use of artificial intelligence, machine learning and quantum computing. That probably means nurturing contact with some propeller heads in Silicon Valley or someplace like that and/or exploiting emerging computer applications that are artificial intelligence capable.
The amount of work that I can see coming that can be done by just one small architectural enterprise is probably going to start very soon exploding exponentially, and when I say “small,” I am thinking about one “army of one” architect per enterprise, possibly officing in a bedroom at home, running a huge international wide area network, comprised of dozens if not hundreds or even thousands of collaborators online in locations all over the world. Conversely, the number of businesses needed to produce the available work to be done could start going down just as exponentially, and the result could be a very small club of architectural enterprises still left standing. Those few enterprises would likely be outrageously successful.
This could turn out to be the biggest exchange of wealth in the AE professions since before the dawn of the Industrial Revolution.
More and more projects will be produced by forming temporary project by project strategic partnerships, which are instantaneously formed and mobilized and operational for the life of each specific project and liquidated immediately upon completion of the project work. These strategic partnerships will ebb and flow in a continuous process, utilizing world class talent drawn from the four corners of the planet.
Regardless of where personnel are located. It will become necessary to change the way these personnel are compensated and to seek personnel who can work for predetermined and lower compensation as the markets for architectural services continue to become more and more competitive.
I’m pretty sure you don’t discover your profit/loss margins until your personnel turn in their time sheets and you don’t get a complete look until the last time sheets are submitted and you don’t have any control of what your personnel are costing you because you pay them on the basis of time spent, not work produced.
You need fixed prices before starting work, and agreements to pay for the work if and when you get paid. Fixed amount compensation provides your team incentives to press forward aggressively to get the work done as soon as possible so they can get paid. Paying if and when you get paid preserves your cash flow and protects you against loss until you get paid.
Knowing your margins ahead of time also allows you to be more selective about the projects you choose to produce. You should not wait until you have invested the full resources of your enterprise to produce the work only to find out that you did the work for a loss. It’s better not to ever have done that work in the first place.
It's not easy to do because there are a lot of not so well qualified and incompetent architects competing for your business, but if you are diligent and/or lucky you can find and hire top quality personnel who will gladly work for you on the basis of work produced. You likely will have to look offshore.
Many of the architectural personnel in other countries will not only agree to be paid on predetermined fixed compensation amounts, but will work much less expensively on a US Dollars per hour basis and probably faster and at often higher quality than the way your current employees are working now. These are highly experience licensed architects and engineers in their respective jurisdictions who have 10 to 20 years of experience, working for projects in the United States.
There is more.
Neurolink has already installed devices into some human skulls to interface with computers. This will be offered commercially very soon, and you can expect architects to start participating. However, the advantages of Bluetooth human-computer interfaces may come at a price. We humans are accustomed to absorbing information at 1x and possibly 2x and we can distribute data at 5x, or 10x or 1,000x or a million x, but what happens to us as biologically free and independently thinking and existing human beings if we begin being Bluetooth linked to receiving and processing data at a million x? At some point does who we are begin to become essentially some sort of cyborg, completely displacing who we were?
Moving on - Quantum computing, artificial intelligence, and the global economy will be completely overhauling the digital work environment and many architecture enterprises who are exploited by rather than exploiting these conditions may not survive and many architects will probably be displaced. The firms and the architects still left standing will become fierce technology users. Architecture enterprises still standing will have digital productivity and creativity going through the roof. What will be left of the human condition of the architects running these enterprises I think is quite open to conjecture.
While Neurolink Bluetooth human-computer links will greatly improve the productivity of architects, just making those links to ordinary computers will not be enough to stay in the game. Those architects who make human-quantum computer links will be significantly ahead. How far ahead is that
Technology is exploding. Moore's law of a doubling every two years of the number of transistors that can be placed into an integrated circuit and in many ways applied to technology in general, now has a new yardstick and quantum computing is part of that yardstick. Elon Musk estimated in an interview recently that artificial intelligence is now multiplying at the rate of 10 times per year if not every 6 months. Couple that with the sobering speed of quantum computing, and we are looking at truly mind-boggling change. You may have heard about the speed of quantum computing, but are you aware of just how fast it really is? The following is an example:
In 2019 Google's Sycamore, a 53-qubit refrigerator sized quantum computer, was given a task to perform a specific complex mathematical problem—sampling the output of a quantum circuit. Google claimed that Sycamore could solve this problem in about 200 seconds (just over 3 minutes). Google compared Sycamore's performance with that of Summit, the world's most powerful classical supercomputer managed by the US Department of Energy. Google's team initially estimated that Summit would require about 10,000 years to solve the same problem. Later, this estimate was revised down to 2.5 days by IBM, but still, the quantum computer showed a significant speed advantage. So, ultimately just any human-computer link may not be good enough. It matters WHICH link that might be.
The international supply chain from China, ie, Chinese manufacturing infrastructure, will soon totally collapse. It is already happening. Newly Chinese manufactured building transformers, for example, are on 42 month back logs and it’s getting longer. Whole building projects are frequently on shorter time schedules. Over the next five years companies and governments all over the world will enter a triage scramble to find and to build new manufacturing infrastructure to replace collapsing Chinese manufacturing. Customers, including architects, will not be able to find enough or suitable manufacturing resources to buy what they need to run their enterprises. Depending on the industry, fixing or replacing supply chains will take months to years and in some instances it will take decades. Many enterprises, including architecture firms, will have to rely on international wide area networking to provide access.
Monetary exchanges will go digital, severely impacting cash and who knows what that result will be? Artificial intelligence and machine learning will start doing everything you used to do as an architect.
Driverless cars are here. Flying cars will come next. Sooner than anyone thinks we will have to give up our drivers’ licenses because digitally managed traffic control of driverless flying cars will require hair trigger accuracy and bumper to bumper tight tolerances not possible to be met by humans individually piloting their own vehicles. Three and four lanes of traffic will displace two and those lanes will be stacked 3 dimensionally two or more layers vertically. It is entirely possible for us to see traffic management like this in five years. Driverless ground based taxis and trucks are already operating in many cities now in various parts of the world. Practically all of the taxis in Silicon Valley in California are driverless Teslas. Management of digital traffic will not allow a relapse into localized isolated office environments. The pace of architectural digital work will have become too fast even for digitally managed traffic to support commuting to and from office and home.
Giving up personal driver’s licenses will probably come in phases. The most severely impacted traffic gridlocked areas will come first, restricting traffic to driverless ground based vehicles during rush hour and gradually expanded from there. Aftermarket driverless kits will become available for manually driven cars if access to lower velocity ground level driverless zones is needed.
A new paradigm may emerge to define architectural practice. Professional seals and signatures may collapse into an acceptance by jurisdictions of Building and Zoning Departments, who authorize unsealed and unsigned robot-generated construction documents to be presented for building permits and zoning approvals and no longer subject to tedious and time-hogging reviews and to be constructed without jurisdictional Building Inspections because those documents will be totally free of errors and omissions, while artificially intelligent construction robots turn in perfect 3D printing performances. Achieving building design and construction documents may become no more complicated for a building owner or user than to go to a kiosk in a local department store, and using Elon Musk-styled Neurolink brain implants for mental telepathetic directions, inputting building program requirements and waiting momentarily while finished documents are presented, possibly to be captured on a stick drive or cell phone. The future will indeed be different. In many ways the future may already largely be here.
A few days ago I asked ChatGPT to make a list of 30 brand names of digital applications currently offering building industry related artificial intelligence. The list included 4 applications offered by Autodesk. One of those applications is one that is in wide use by architects and engineers today, and that is Revit. I need to look deeper into this, and I invite you to do the same. It’s my understanding that Revit is deep into Advanced Computational Design, but I think that capability is just fast computations and does not yet get into real artificial intelligence. However, keep your powder dry. We might start seeing AI emerge from some soon to be released version of Revit.
What should you do first? I think the first place to start is by gradually decentralizing the production of your architectural working drawings to become part of a wide area, possibly international, network of architect drafters and modelers. As you become familiar and comfortable producing your working drawings in this manner you might try forming an international strategic partnership with an offshore architect to function as the architect of record for one or a few of your projects. Other than offshore architects of record, this is precisely the type of business Archline.com, LLC offers now, and we have been doing this for 25 years, over 1,000 completed assignments in over half the states in the US for over 150 firms.
Some architects tried Archline out to produce the working drawings for a couple of large projects two years ago – and Archline has now completed 30 large projects with them. The same as for them, Archline and I and our teams will make you look great. I promise - and if you're serious, I will name names and put you in touch with some of Archline’s present and past architect clients and introduce you to our team leaders who will be working with you. Call them. Talk to them. Go see them. Decide for yourself.
If you are interested in our putting our heads together to try and figure out how to make something mutually beneficial out of all this, then choose a time for us to schedule a short online session. Calendar for Charles Traylor or call me (214) 304-2850 at your convenience or email me at archline@archline.com and let's visit. You'll be glad you did.
Best regards,
Charles Traylor, Architect, NCARB, CEO and Founder
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