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How technology is transforming our homes and neighborhoods.

Last year, Paul and Sarah Edwards moved into the forest. They gave up residence in Santa Monica, California, for a four-bedroom house located in the Los Padres National Forest. Santa Monica, the couple's home for a decade, had become less pristine over the years, and they wanted more of the fresh-air lifestyle. Today, they live - and work - in an environment they once dreamt of.

A view from any part of their home consists of mountains, trees, or a lake. Yet the couple - authors who have written numerous books, including Working From Home - haven't had to sacrifice any of today's modern necessities to commune with nature. Their house is equipped with three phone lines, five computers, a satellite dish, and the capability to broadcast a weekly radio show. Says Paul Edwards: "A lot of the attractions of the city are deliverable over wire. We can shop the markets of the world via the Internet and be entertained via the satellite dish."

Most Americans may not want to live (and work) in the wilderness. But if they wanted to, an increasing number of them could. Paul and Sarah Edwards represent a growing trend: wiring your house for everything, including work. Over the next few years, as technology continues to rip through society, the work-at-home labor force - which currently totals 21 million - is expected to swell to record numbers. This new form of cocooning will likely bring new challenges for workers and businesses alike, and it will be the spark that finally brings advanced technology into the home. "The invasion of the home by work will transform our culture," says Joseph Coates, president of the Washington, D.C., futurist firm Coates & Jarratt, Inc. "Everything in society will change in big or small ways for a massive number of people."

Coates estimates that 5 percent of the American work force currently works at home or a satellite office close to home. In five years, he expects 20 percent of all workers to give up the power suit for the sweat suit. But will the home be equipped to accommodate the coming revolution? And is American business up to the challenge?

When asked about the home of the future, most people still talk about the physical parts: The home office, which traditionally has been tucked away in the basement, attic, garage, or even a spare bedroom, will move front and center, signaling its greater significance in the information age, experts say. Ceilings will rise higher, up to nine feet, and floor plans will be opened up to create flexible, multi-use spaces that evolve to suit the changing needs of growing families. At the most extreme, homes will be loft-like spaces where the ever-changing boundaries of flex space will be determined by movable partitions or screens. "The room that will be on the chopping block will be the living room," says Gopal Ahluwalia, director of research for the National Association of Home Builders. "The family room will get bigger - it will become the living room - and the kitchen will get bigger and fancier and will also be used for entertainment."

Others talk about the smart appliances that may one day control the home. We've heard about all kinds of gadgets that may eventually have the capacity to turn our humble homes into "smart houses," making The Jetsons' space-age pad look like a prehistoric cave. Under such scenarios, networks of computers will "chat" with major appliances, and virtually take control of the mundane household chores. The front door will open when it hears our voices, lights will turn themselves on the second we enter the room, thermostats will automatically adjust themselves to changing weather, and the refrigerator will make a grocery list (oops! - we're out of milk!) and order fresh food from a Web-based grocery store.

However, few people talk about how this will all work and whether consumers actually want talking coffee pots and the like. Today, every industry, it seems, is gunning for squatter's rights in the home. Cable and phone companies, as well as Internet service providers, are all vying to control the flow of information in and out of the home. Media Fusion, for example, is attempting to develop technology that would redefine the term plug-and-play - data, voice, and video transmission through power lines and available to homeowners via the outlet. Microsoft has built the Microsoft Home, a prototype of what's to come, such as remote access to home information. Electrolux, the Swedish appliance manufacturer, is developing "Screenfridge," a refrigerator that not only tracks the contents of the ice box, but functions as a video and voice message center for the family. Even Old Economy staples such as BellSouth want some action; the former Baby Bell recently introduced wireless home se! curity, a feature that would be included on the monthly phone bill.

And yet, the most difficult of questions remains: What will consumers want when it comes to their homes? Research so far suggests that, in many ways, consumers expect the most and want the least, indicating a desire for complex appliances with the most simple and easy-to-use design. According to a May 1999 report from Roper Starch Worldwide, 85 percent expect to own a personal computer within the next decade; 55 percent expect most mail to become electronic; and 49 percent expect they will do most of their shopping from home. A study by Owens Corning indicates that today's young adults have even loftier hopes: 41 percent of Gen Xers and Gen Ys believe that by 2010 their homes will be completely wired; 30 percent think they will have multipurpose rooms; 23 percent say they will be maintenance-free; 15 percent say they will be made of high-tech materials; and 13 percent believe they will be modular. By 2025, 26 percent think the their homes will be fully automated.

For now, that vision may only be true for the likes of Bill Gates, who can - and has - spent fortunes on his high-tech, state-of-the-art Seattle megamansion. But for the majority of Americans, that vision of the future may still be trapped inside the crystal ball. Technological innovations are likely to enter the home as they have thus far - first storming into high-tax-bracket homes, allowing occupants to complete the most mundane of tasks with quick speed. Then, rippling through to the rest of the social order.

Granted, technology is trickling down to the Joneses at a faster clip than ever before. Whereas the telephone took 38 years to reach a critical mass of 10 million customers, broadband access is expected to take only 4.75 years to reach the same number, according to an IBM Market Study. Already 64 million of the nation's households have home PCs, up from 52 million just two years ago, according to Parks Associates. In just four years, that number is expected to rise to 77 million. What's more, Parks projects the number of homes with online capabilities will grow to 73 million in 2004, from 50 million today.

Are businesses ready for the home technological revolution? Futurist Coates doesn't think so. Working at home, says Coates, will change the "behavior day" of most workers, and most companies haven't even begun to imagine how the shift will affect the way people use products. "If you're hired to do work eight hours of the day, there's no reason why you have to do it between 9 a.m. and 5 p.m.," he says. "You may do the work in those hours or you may create another schedule. Either way, your behavior will change, your lifestyle will change, your purchasing patterns will change. Will you still need a $25,000 automobile to drive 4,500 miles a year?"

The flaw in most corporate thinking, says Coates, is that it focuses on the short-term future, the next three to four years. And it's centered around who will have the edge over whom. "But anyone who runs a services business needs to relate the shorter-term planning with longer-term planning," says Coates. "You have to first see what others have tried and then go out and find a way to do business differently." What does that mean? It not only means looking for new avenues to market products, but new reasons why people should need them.

Some industries have time to answer those questions, because technology is still developing and people are just beginning to become familiar with it. But one industry that can't wait is housing. The most immediate wake-up call is for home builders. There were 1.67 million new houses built last year. Only 5 percent to 8 percent of them were wired properly, says Bill Lane, chief operating officer of Smart House, Inc., a three-year-old private company that is building a national sales and marketing network for installed home electronic systems. The majority of homes under construction today don't have the capability to carry all the services consumers are likely to want, such as DSL, cable modems, bandwidth, or digital satellite services, says Lane. "First-time buyers aren't going to accept moving backwards," he says. "And when it comes to the home office, consumers want all the benefits they've become accustomed to in the workplace." Warns Coates: "When consumers turn their wrat! h on the defective, inadequate, poorly designed items, their wrath will be unforgiving."

Some contractors, though, are taking heed: Allied Business Intelligence Inc., a technology research firm based in Oyster Bay, New York, predicts some 800,000 housing units will have structured wiring by 2004. That's eight times as many homes as in 1999. In new-home construction, "structured wiring" is competing with other "no new wires" networking methods that include phone lines, power lines, and wireless technology to be the home networking method of choice. Structured wiring, which typically adds $700 to $2,000 to the cost of a home, relies on cables and other wiring connected to a central distribution hub.

And once wireless technology, which is already being marketed to big business, becomes economically feasible for the average homeowner, workday and playday will blend seamlessly and the office will move with us, whether it's to the beach boardwalk or the corporate boardroom. According to "Home Networking Structured Wiring Systems," a report by World Information Technologies Inc., a market research firm in Northport, New York, some 49.8 percent of homes with home networks will be using wireless technologies by 2003, compared with only 9 percent in 1999. "Right now, only in the high-end projects are the real technological changes taking place," says Brett Martin, spokesperson for the National Association of the Remodeling Industry. "For the middle class, this will not happen for at least five years, or perhaps ten. It will depend on the pricing and the education of the consumer and of the contractor."

If the PC revolution is any indication, the consumer may not have to wait long. 3Com, a leading vendor of modems, hubs, and switches for corporate networks and Internet access, estimates that some 18 million U.S. households already have multiple PCs. Industry watchers say that the two- and three-computer home in the 21st century will become as standard as the two- and three-television home was in the 20th. It's even likely that each room will have its own computer with its own function. For instance, the computer in the kitchen may display your favorite recipes and talk you through the instructions, while the one in your home office may be programmed to call up stock reports and business news.

"People will be more involved with `Internet snacking' - getting information at will, as they walk by," predicts Brent Lang, director of marketing for home networking for 3Com, which has just introduced HomeConnect, a home network kit. The same type of networking, says Lang, could be used to connect home appliances. "This may be a ways away," he says, "but you could be in your car and regulate your sprinklers, lighting, security system, or you could be on the road and `see' through a video camera in your house what is going on there while you're away." For now, though, don 't throw out the home alarm system just yet.

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