Grand challenges have been identified in a growing number of professions, institutions, governments, and industries to focus attention on significant problems and opportunities. In real estate, grand challenges have received limited attention. This paper explores grand challenges and whether real estate may benefit from identifying, framing, and pursuing solutions to grand challenges.
The research involves identifying and exploring how grand challenges have been pursued in other fields and disciplines and the related outcomes. These findings are then considered within the context of real estate. Suggestions are developed for possible frameworks to facilitate the value of grand challenges in real estate.
Grand challenges in engineering and management have produced results in education and research. Other research has defined four categories of grand challenges with real estate fitting into three of the four categories. The only scholarly real estate-related article on the topic considers how real estate aligns with each of the seventeen UN Sustainable Development Goals. It then outlines the skills necessary for real estate to effectively address grand challenges and finds these skills to be in short supply. Additional findings include how identifying and framing grand challenges contributes to their solution and how the civic wealth creation framework may expand real estate’s conception of how it contributes to value and wealth creation.
Grand challenges merit additional research into their potential value in real estate. The relationship of development, equity investment, operation, and redevelopment and grand challenges may be fruitful. Limitations include a dearth of real estate research on grand challenges and a willingness to initiate such research.
Real estate often faces resistance in the form of “NIMBY” and “BANANA” attitudes. Grand challenge research may provide an approach to developing a “do good” mindset to replace the “do no harm” mindset. Shared goals among all stakeholders generated by grand challenges may facilitate more trust within the entire real estate ecosystem.
Real estate and the built environment are crucial elements of society and its functioning. Grand challenges can focus research on the underlying mechanisms that may move real estate from seeking to minimise harm to seeking to increase civic wealth.
Grand challenges and real estate’s role in addressing them have received scant attention. This paper explores how to initiate thinking about real estate and its responsibility to society.
Introduction
Challenges abound in real estate and the built environment (hereafter simply “real estate”). These challenges may be classified in two ways: (1) challenges the real estate industry faces in effectively conducting its business and (2) local or societal challenges that real estate can help address. Rising construction costs, regulatory uncertainty, changing space demands, and changing tastes are examples of challenges to doing business in real estate. Global environmental change is an example of an external challenge.
The Counselors of Real Estate (CRE), Urban Land Institute (ULI), Royal Institution of Chartered Surveyors (RICS), and other real estate organisations regularly produce analyses of the changing business challenges facing the real estate sector. These challenges are important because they affect the feasibility and viability of the real estate industry to develop, own, and operate a high-quality built environment. The real estate business environment is volatile, uncertain, complex, and ambiguous (VUCA), making long-term enterprise sustainability difficult for firms in all facets of the industry.
CRE, ULI, and RICS also identify external challenges facing the communities, regions, nations, and world in which real estate operates. Often, these challenges relate to the seventeen Sustainability Development Goals (SDGs) developed by the United Nations in 2015. Specific goals and target dates provide a basis for evaluating progress. Given the local nature of real estate markets and the significant impact real estate development has on its immediate neighbourhood and extended community, the specific SDGs of greatest importance may be those of the community, and these may vary across communities and time.
Non-real estate professions, industries, universities, scholarly fields, foundations, governments, and other organisations have identified societal challenges of particular importance and labelled them as “grand challenges” (GCs) to focus attention and effort. Professional real estate and real estate-related organisations have identified and actively pursued issues and challenges but have not labelled such challenges as “grand challenges.” For example, the American Institute of Architects (AIA) developed the “Framework for Design Excellence”:
The Framework for Design Excellence represents the defining principles of good design in the 21st Century. Comprised of 10 principles and accompanied by searching questions, the framework seeks to inform progress toward a zero-carbon, equitable, resilient, and healthy built environment (emphasis in original and accessed at: AIA.org).
Real estate academic conferences and journals have included sessions and articles on significant local and global challenges. However, an initial review found no academic real estate organisations explicitly identifying “grand challenges.”
This paper considers fundamental questions about the potential role of GCs in real estate. What are grand challenges and how are they classified? Does real estate have GCs? Do GCs matter and, if so, how? Are there models, frameworks, and processes capable of providing structure and understanding of how real estate can interact with other stakeholders to address grand challenges? The goal is to assess whether identifying GCs may be helpful in moving real estate from a mind-set of “do minimal harm” to “do no harm” to “do good.”
What is a grand challenge?
Is a “GC” a real thing or merely a rhetorical device? Does a challenge remain a challenge whether “grand” or not. Are GCs simply mundane challenges with a good PR firm? How do commonly cited challenges such as “global challenges” and “societal challenges relate to GCs? Are we wasting time on a meaningless distinction without a difference? The answers to these questions depend on one’s definition of a GC. Brammer et al. (2019, p. 520) describe GCs as calls to action focusing on specific domains and identifying large unresolved but potentially solvable problems. George et al. (2016) cite the Grand Challenges Canada definition of GCs as …”Specific critical barrier(s) that, if removed, would help solve an important societal problem with a high likelihood of global impact through widespread implementation.” Eisenhardt et al. (2016) posit that, “Regardless of their specifics, grand challenges are complex, uncertain, and without easy solutions.” They further note that GCs often require a collaborative interdisciplinary approach and may morph from a purely technical problem to one with important social dimensions. GCs have specific goals, sub goals, and target dates.
The word “grand” may connote global or society writ large. However, Brammer et al. (2019), note GCs can involve small or large geographic areas. Thus, GCs may target multi-national, regional, or global problems, while others may target community, MSA, or regional challenges. For example, assuring a safe and reliable supply of fresh water is a GC for the Las Vegas and Phoenix MSAs because the challenge matches the characteristics of GCs outlined earlier.
Brammer et al. (2019) also note that GCs differ on the dimension of complexity:
The second dimension of our framework reflects the degree of sociotechnical, scientific, system, and stakeholder breadth that a specific challenge encompasses. Much of the GC research characterises this dimension in relation to the relative complexity, negotiatedness, and the range of stakeholders that must necessarily be included and engaged in finding a solution to a specific challenge.
Some GCs have many moving parts and multiple stakeholders possessing diverse skills and information at varying levels, along with differing values, perceptions, and goals. Stakeholders engage in conversation, facilitation, mediation, arbitration, and litigation to identify who benefits, who pays, and who bears the risk associated with proposed solutions. Such GCs are quite complex. Other GCs may involve fewer stakeholders, more uniformity in thinking, narrow goals, and less contention. Such GCs are less complex. This continuum of complexity is useful to understanding how real estate contributes to solving GCs. GCs possessing differing levels of complexity and involving different geographic areas, may be assigned to four categories (Brammer et al., 2019):
Classifications of grand challenges
Community Grand Challenge → Lesser complexity and Smaller geographic unit
Global Grand Challenge → Lesser complexity and Larger geographic unit
Complex Grand Challenge → Greater complexity and Smaller geographic unit
Societal Grand Challenge → Greater complexity and Larger geographic unit
Given the local nature (smaller geographic unit) of real estate markets and the impact of positive and negative real estate generated externalities on a local area, real estate has an obvious connection to Community and Complex GCs as identified by Brammer et al. (2019). Simultaneously, real estate has an impact on Global and Societal GCs involving larger geographic units and possessing varying levels of complexity. Thus, it is not unusual for real estate to face multiple GC categories.
Further, real estate development, operation, and redevelopment involve dynamic relationships with many stakeholders and multiple ecosystems over the decades-long lifecycle of improvements. At every geographic level, real estate activity engages in business environments with varying levels of complexity, volatility, uncertainty, and ambiguity. Real estate’s engagement with grand challenges is complex.
Grand challenges in real estate: the current situation
The Association for the Advancement of Collegiate Schools of Business (AACSB) has adopted expanded standards for assessing the impact of business research. These new standards move beyond the traditional notion of the assessment of research impact based on the number of articles and related citation counts to include assessments of the usefulness of research for addressing “real world” problems in business or society. AACSB institutions must monitor and report the impact of research on business and society. This “real world” impact is crucial in a higher education environment facing doubts about its value, decreasing numbers of high school graduates, harsh budget realities, and the need to demonstrate value creation for society commensurate with the public and private funds utilised. GCs provide a common and consistent foundation for evaluating the business and societal value of business research, including real estate research (AACSB, 2023).
An initial search identified only one real estate-related article (Edkins et al., 2021) with the phrase “grand challenge” in the title. This insightful article from the project management area examined the relationship between real estate and each of the seventeen UN SDGs. The authors summarise the contribution of their paper as:
The value proposition of this paper is to illustrate the relevance and contribution of project management to real estate and to consider the implications from the proposed set of eight highly relevant, cross-cutting themes. Within the six principal implications identified, we show how project management in the 21st century needs to be more strategically focused and front-end orientated on issues that have been considered beyond the domain of traditional, technocentric and execution-orientated project management (Edkins et al., 2021).
Edkins et al. (2021) identify real estate’s role in solving grand challenges and the nature of the approaches most likely to have a significant impact on such efforts. More and better strategic thinking, greater emphasis on early-stage collaborative efforts, and creating interdisciplinary solutions to complex challenges are emphasised. They identify 8 GC themes for real estate in the 21st century:
Digital disruption
Health and wellbeing
Learning environments
Accessible and affordable housing
Beyond placemaking
Resilience
Infrastructure interfaces
Community inclusion
Edkins et al. (2021) highlight that solutions to GCs are beyond the reach of one individual or one academic or practice area. Instead, GCs require the ability to deal with complexity, work in a collaborative manner, develop a strategic mind-set, and create an interdisciplinary approach to problem solving.
Additional research into GCs in real estate is lacking. However, the fields of engineering and management have extensive research and programmatic experiences with GCs. A review of these academic fields provides useful insights into the potential value of identifying and exploring GCs.
Grand challenges in two non-real estate domains
National academy of engineering
In 2008, the National Academy of Engineering (NAE) convened a panel of eighteen experts from business, academia, and policy organisations aided by fifty subject matter experts. The panel identified fourteen engineering GCs distributed among four themes: health, sustainability, security, and global environment (Mote et al., 2016):
Engineering grand challenges.
Make solar energy economical.
Provide energy from fusion.
Develop carbon sequestration.
Manage the nitrogen cycle.
Provide access to clean water.
Improve urban infrastructure.
Advance health informatics.
Engineer better medicines.
Reverse engineer the brain.
Prevent nuclear terror.
Secure cyberspace.
Enhance virtual reality.
Advance personalised learning.
Engineer the tools of scientific discovery.
These clear and simply stated GCs represent an aggressive and focused engineering agenda.
The NAE GCs have been impactful. Since 2013, the National Academy of Engineering (U.S.), Royal Academy of Engineering (UK), and the Chinese Academy of Engineering have jointly sponsored biennial Global World Challenges Summits. These interdisciplinary meetings bring scholars, practitioners, and policy makers together to share ideas on addressing GCs through research, teaching, and practice. In 2009, the NAE created the Grand Challenges Scholars Program (GCSP) for college and university engineering students. The program emphasises training engineering students in five competencies helpful in addressing GCs (Mote et al., 2016):
Five competencies for addressing grand challenges.
Research/Creative
Multidisciplinary
Business/Entrepreneurship
Multicultural
Social Consciousness
Globally, around one hundred engineering undergraduate programs in the GCSP are producing engineering graduates trained to deal with GCs.
Academy of management
Within the Academy of Management, Colquitt and George (2011) published a “From the Editors” note in the Academy of Management Journal asking potential authors to consider addressing grand challenges in papers submitted for publication. Five years later Eisenhardt et al. (2016) repeated the emphasis on grand challenges in another Academy of Management Journal “From the Editors” note. To date, papers, special journal issues, and symposia have addressed GCs. Howard-Grenville and Spengler (2022) summarise their extensive literature review of management papers dealing with GCs following the publication of an article promoting a GC research agenda in 2016 (George et al., 2016):
All in all, our review of 161 papers in the core management domain that cite George et al. (2016) shows that there are a variety of ways in which scholars have joined the conversation on grand challenges: for (a) framing contexts as worthy of study; (b) orienting toward theories of collaboration and innovation; (c) elaborating how we conceptualise grand challenges and study them; and to (d) critiquing the management field and calling for further evolution.
The management field approaches GCs from the standpoint of developing insights into organisation structure, collaboration, leadership, stakeholder theory, innovation, and entrepreneurship helpful to those leading and managing efforts to address GCs. GCs prompted a wave of fresh thinking and research on how to best deal with collaborative, interdisciplinary, complex, dynamic, and uncertain challenges, whether labelled as “grand” or not.
Lessons from engineering and management GCs
In engineering, GCs drove global collaboration, research, and education efforts. Engineering also demonstrated the value of simply stated and specific GCs. In management, the topic of GCs produced significant research on how organisations and teams can work effectively in interdisciplinary efforts to solve GCs. Engineering and management demonstrate that GCs can provide a focus for collaborative research and education.
Grand challenges in real estate: the possibilities
Research indicates that addressing GCs requires collaboration among diverse groups, creativity, and innovation enhanced through interdisciplinary and intercultural approaches, a strategic (long-term) mind-set, and specific and time-sensitive goals. Addressing GCs also necessitates developing a desire to move from compliance to seeking to do good. Simply avoiding the tragedy of the commons is not enough. There must be a commitment improving the commons. This requires looking at value creation and wealth creation and how they can be distributed among all stakeholders in a more equitable and holistic manner. GCs foster an infinite game mind-set in which sustaining the game for all participants is the most important indicator of success. In real estate development, investment, lending, operation, and redevelopment, these characteristics, mind-sets, and actions can be a challenge.
The mind-sets and actions discussed above are not new in real estate. Davy and Harris (2005) propose many of the same concepts and constructs as a pathway to improved practice and enhanced value creation in the real estate design professions. Davy and Harris (2005) also propose thinking in terms of ecosystems, an insightful suggestion fitting the integrated nature of successfully addressing GCs. Ecosystem thinking moves real estate toward collaborative co-creation of value and wealth by multiple stakeholders. Davy and Harris’s (2005) work has been robust and durable, remaining relevant today.
If addressing GCs demands collaborative co-creation using innovative, interdisciplinary, and constantly evolving approaches, how do these approaches occur in real estate business environments with little trust and multiple stakeholders possessing markedly different goals, needs, and values? How do ecosystems of stakeholders form and flourish? How are sufficient trust and flexibility created and maintained to design, construct, operate, and redevelop a built environment that “does good” in a holistic sense? While numerous frameworks exist, two promising approaches are considered.
Grand challenges that are collaboratively identified and framed are part of the solution process
GCs contribute to their own solutions. The very act of collaboratively thinking about challenges and refining them into thoughtful and concise GCs contributes to the problem-solving process. This process involves the essential activities of identifying and framing GCs. When GC identification and framing are accomplished within an inclusive ecosystem in an open, collaborative, and equitable manner, the resulting GC is more likely to garner widely shared consensus. Consensus building is an iterative process involving debate and revision until a final GC emerges. As a consensus, not everyone will support the GC, but few will reject or actively resist it.
GCs contain seeds of thinking to help move real estate development, operation, and redevelopment toward the co-creation of solutions by:
Providing shared goals and sub-goals for all stakeholders.
Providing motivation based in economics, psychology, and sociology.
Providing a common language regarding challenges, objectives, and metrics that facilitates better communications clarity and specificity.
Establishing Incremental GC goals to motivate useful action, even if that action does not completely solve one or more GCs.
Establishing specific incremental goals may and agreed-upon financial and non-financial metrics for measuring progress in geographic terms ranging from the building itself to a global level.
Carefully and collaboratively identifying and framing GCs is a big step toward addressing them. Shared goals and values and reliable progress metrics facilitate the development of trust and the formation of virtuous cycles.
Civic wealth creation: an expanded value creation framework
Lumpkin and Bacq (2019) introduced the civic wealth creation framework to explain how three groups of stakeholders collectively and collaboratively create civic wealth. Civic wealth creation is “… the generation of social, economic, and communal endowments that benefit local communities.” Civic wealth clearly goes beyond purely economic considerations and may serve as a framework to understand how GCs may be addressed in real estate. Wealth is an important concept in that within it is the potential to sustain further growth and development, consistent with the concept of the infinite game. The three stakeholder groups each possess a unique set of values, assumptions, and goals, collectively called logics, motivating their perceptions, thinking, decision-making, and actions (Lumpkin and Bacq, 2019):
Community: Stakeholders within geographic areas of varying scale, such as a neighbourhood, city, or MSA or a group of people with shared interests, beliefs, culture, ethnicity or other characteristics. Community stakeholders utilise the logics of kinship and citizenry.
Regimes of Support: Stakeholders providing resources and/or the authority to act. They facilitate CWC and can be private or public in nature. Regimes of Support utilise the logics of influence and control.
Enterprise: Entrepreneurial efforts to generate revenues by taking ideas to market. These efforts can be for-profit or not-for-profit in nature. Enterprises utilise the logics of business and entrepreneurship.
The interactions between these three groups create four kinds of wealth:
Type of Wealth → Created by Interaction Between
Economic Wealth → Regimes of Support and Enterprise
Communal Wealth → Enterprise and Community
Social Wealth → Community and Regimes of Support
Civic Wealth → Community, Regimes of Support, and Enterprise
By considering how different stakeholders collaborate to create wealth, CWC provides a model for making sense of how real estate can move from compliance to doing good. As a collaborative and catalytic enterprise, real estate can contribute to producing diverse types of wealth. As noted by Lumpkin and Bacq (2024):
When diverse stakeholders and regular citizens participate, negotiate, collaborate, and coalesce around positive societal change initiatives, they can develop viable remedies and new approaches to complex problems that have impeded local economies. By being willing to confront differences and overcome challenges rather than blame intractable problems on market failures or government failures, champions of CWC are bringing together the forces needed to restore and empower local communities.
This brief overview of CWC suggests its potential for better understanding how real estate can co-create economic, communal, and civic wealth while contributing to solving GCs and other challenges facing society and the real estate industry. More real estate research may bring CWC’s potential into focus.
Summary
This paper deals with whether or not real estate needs grand challenges. While other fields and organisations have identified and pursued grand challenges, real estate has not. In the fields of engineering and management, grand challenges have been catalysts for research and education efforts. These results support the development of GCs and the research and education efforts they may generate. A collaborative process for identifying and framing real estate GCs can contribute to finding solutions.
The civic wealth creation framework may provide a starting point for better understanding how real estate produces positive and negative impacts on civic wealth, how to measure those impacts, and how to enhance wealth creation. GC efforts can start with a small-scale effort and use an iterative learning loop to evaluate the results and make decisions about whether to expand real estate GC efforts. Real estate may not “need to” develop and pursue GCs, but there is evidence real estate may “want to” consider the possible value of GCs in creating new ways to understand the world and real estate’s role in it.
