The risk of digitalisation in capital intensive industries

Abstract

Despite the prevalence of digitalisation, the real estate industry has demonstrated significant resistance to this transformation. Therefore, this study examines digitalisation in capital intensive industries, focusing on commercial real estate. Based on interviews with high-level executives in Germany, the study focuses on the inherent challenges of digital transformation, which can pose significant risks and have received little attention in the literature. The digital resistance is influenced by its heterogeneous nature, risk aversion and digital literacy deficits and a fragmented data landscape and lack of standardisation compound these barriers. However, the study emphasises that digital transformation is not merely about technology adoption but a collaborative, integrated, dynamic and digital risk-aware approach. While the study focused primarily on real estate, the findings could resonate across capital-intensive industries, highlighting the need for continuous adaptation to ensure industries remain resilient and competitive in this evolving landscape.