Impacts of Digitization on Real Estate Sector Jobs - Significant Structural Change Expected

Abstract

Previous research on automation and job disruption is only marginally related to the real estate industry and its characteristics. This study examines the substitution potential of occupations in the real estate sector, with an emphasis on the German real estate industry. Since Germany is the largest EU economy insights for the German real estate market allow a first approximation for Europe. For this, an extensive database of the German Federal Employment Agency containing 286 occupations is combined with a database of the German Institute of Employment Research reflecting to what extent tasks within jobs can be automated by current technical capabilities. This study follows the task-based approach of Dengler/Matthes (2018), thus calculating the substitution potential of jobs in the real estate sector, revealing that for the 286 identified occupations and their respective tasks a weighted average of 47% can be substituted through current technological capabilities. This research quantifies the magnitude of the job killer aspect of digitization in the real estate sector. However, digitization also has a job motor aspect. Thanks to digitization, new jobs will arise. This contribution indicates the extent of the structural change the real estate sector has to face due to digitization: one out of two real estate jobs will have to be recreated.