[Lee Myung-ho's Future Preview] The Future of Homeconomy and Housing

One of the changes brought about by COVID-19 is the rediscovery of the home. Amid social distancing, people's activity spaces inevitably shrank to their homes. Many daily activities such as working, attending classes, shopping, enjoying entertainment, watching movies, and exercising have been reorganized around the home. The home has expanded its function beyond a sanctuary and living space, leading to a shift in perception. As the home became the central space for daily life and economic activities, a new market called Homeconomy (Home + Economy) or stay-at-home economy has grown.

The lifestyle of ‘Jipkok’ (staying at home) and ‘Home-jok’ (home tribe), where people find and enjoy various activities at home, has emerged as a new trend. The Homeconomy market is expanding into food delivery, home entertainment, daily necessities purchases, home appliance rentals, and home care services. In Korea, the area where Home-jok spend the most is home food, including cooking at home and ready-to-eat meals, followed by home beauty, home furnishing (furniture purchase and home decoration), home cafe (coffee maker sets), home training (exercise), and home entertainment (video games, video streaming). This reflects a lifestyle change where the home is newly recognized as a space for leisure and relaxation rather than just housework or sleep.

Above all, the expansion of the home’s functions was made possible by non-face-to-face technologies and services, i.e., digital technologies that support it. The new lifestyle is backed by digital technologies that offer convenience, efficiency, and sustainability. E-commerce, D2C (Direct to Customer) business models, digital on-demand entertainment, social media, remote work tools, and digital education have expanded since the advent of smartphones in 2008. This trend, combined with COVID-19, has led to an explosion of online services and digital content markets in an ‘untact’ (non-face-to-face) manner.

IoT Products Spotlighted as Jipkok Population Grows... ‘Home’ Transformed into an Economic Activity Space

In particular, the distribution industry is experiencing a clear contrast in changes. Traditional retailers such as department stores and large shopping malls, which have represented the distribution industry for decades, are facing crises with sharp declines in sales and operating profits due to COVID-19. On the other hand, some have encountered growth opportunities. Along with the increase in online shopping, consumers have chosen small convenience stores and shops near their residences to avoid crowded places. As preference for nearby shopping increased, convenience stores emerged as a core pillar of offline distribution. Convenience stores are strengthening new services beyond existing ones such as public utility bill payments, cash withdrawals, and mobile phone charging, including delivery, insurance sales, and unmanned multifunction devices. Unique services such as transforming stores into small art galleries or having robots deliver products have also appeared.

As time spent at home increased, smart home products attracted attention at CES, the world’s largest electronics exhibition. Home service robots, in particular, received attention. Robots that can recognize the location and shape of objects to grasp or move them, and assist with household chores such as setting the table before meals and cleaning dishes afterward, have appeared. There were also products that, after purchasing ingredients via an application, automatically send cooking modes, times, and temperatures to a smart oven according to the user’s selected recipe, helping with cooking tailored to personal preferences. Products that provide home training content such as stretching and yoga and allow users to check their exercise in real-time through a camera connected to the TV have also emerged. As smart home products make home life more convenient and increase the activities possible at home, the time spent at home as well as consumption and leisure activities centered around the home and nearby areas will increase. The rediscovery of local areas is expected to accelerate the reorganization of lifestyles centered on local communities.

The biggest change is that the home is transforming into a space for economic activities. Online video conferencing tools like Zoom and various collaboration applications have become everyday work tools, creating an environment where people can work from home. In the future, a hybrid work practice combining office work and telecommuting will become established. Google announced plans to adopt a ‘hybrid work’ model where employees spend about two days a week in the office for meetings and other tasks and about three days working from home or a location of their choice. In Korea, companies like SKT and Lotte Shopping are promoting plans to operate distributed offices near employees’ residences. As the time spent working from home increases, how will future housing change?

Photo by Asia Economy DB

An Era Where Location Importance Disappears... Natural Environment Will Gain More Importance than Urban Centers

In fact, from the perspective of human history, the home and residence have been the central spaces for economic activities. Since humans evolved as Homo sapiens, for about 300,000 years, 97% of that time, humans engaged in economic activities such as caregiving and food procurement within small or extended family groups of hunter-gatherers. The agricultural era, which began about 10,000 years ago in the Middle East, accounts for only about 3% of human history, during which economic activities expanded to collective farming including families and commerce. The industrial era of the past two centuries, characterized by the separation of residence and workplace in companies, accounts for only about 0.06% of Homo sapiens history.

Production in the industrial era was characterized by mass production and mass consumption. It was an era favorable to economies of scale and large corporations. Now, production is shifting to customized small-batch manufacturing, and with the development of digital technologies, especially big data and artificial intelligence, personalized consumption in all fields is possible. Companies are also dividing into small organizations that can quickly adapt, and the era of one-person companies is opening. Economic activities are conducted based on the internet and digital platforms, diminishing the importance of work location. The trend of companies leaving densely populated metropolitan areas and employees working away from company offices is expected to increase.

COVID-19 has accelerated this trend. People who can work remotely will leave urban centers to find homes with lower population density and larger spaces. The importance of locations with large shopping malls, hospitals, and cultural facilities is decreasing, while the importance of more pleasant natural environments is increasing. As shopping, work, and entertainment are handled online, factors that cannot be obtained online are becoming more important in choosing spaces and locations. Areas where people can enjoy their own lifestyle while working are gaining attention. The recent housing shortage in the Seoul metropolitan area, which has shaken the country with a real estate frenzy, may be like the deeper darkness before dawn.

Myungho Lee, Planning Committee Member, Yeosijae Foundation

This content was produced with the assistance of AI translation services.