(Y)our Space: Next wave technology ushers in new occupational demands
Business is becoming all too familiar with the disruptive effects of technology. Presently businesses of all shapes and sizes, drawn from across a wide spectrum of industry sectors, are grappling with the challenges ushered
3 mins to read
Business is becoming all too familiar with the disruptive effects of technology. Presently businesses of all shapes and sizes, drawn from across a wide spectrum of industry sectors, are grappling with the challenges ushered in by the digital revolution. This has brought about significant organisational transformation, fundamentally different talent requirements and the rise of an innovation imperative that places the capacity to innovate as the key determinant of business competitiveness.
Each of these challenges influences the future real estate needs of business. Naturally, changing business structures can lead to a resetting of the corporate footprint and indeed has fuelled demand for business space in all global markets over recent years. Similarly, the tech and creative talent sought by transforming businesses also pushes them towards locations that they are perhaps not typically associated with. Occupier mobility is therefore on the rise, as occupiers take flight to gain access to in-demand skill sets. Finally, for many occupiers, the office has been radically repurposed as an innovation lab, creative hub, business accelerator or incubator in response to the rising innovation imperative.
Far from reaching their apogee, next wave technologies such as Automation, Artificial Intelligence (AI) and Robotics will ensure that the real estate trends noted above intensify. The commercial application of the technologies noted in the infographic below, will bring a new period of rapid organisational and process re-design over the next three years. It will influence the future form, function and location of the workplace. It will change the quantum of floor-space required by a business. It will bring about the closer interaction between humans and machines, and it will ultimately create more productive and efficient organisations, in keeping with the renewed push for productivity.
Source: Knight Frank, 2018 (Y)OUR SPACE Report. Sample = 129 Global Corporate Real Estate leaders)
The impacts of these technologies transcend global office markets. They are proving particularly disruptive to the operations of industrial occupiers and the efficiency of supply chains. It is easy to be swept away by visions of a tech-led industrial utopia. Whilst the potential of automation, robotics, augmented reality and the internet of things are alluring, the harsh commercial reality is that implementing such technology is extremely costly. Consequently, the adoption of such technologies will not be as universal, seamless or rapid as visions of the future often maintain. We believe in a future where automation and robotics are an integral part of the industrial workplace and the operations of industrial occupiers. We are witnessing first-hand the growing power of such technology in driving the operations of some of the tech titans occupying industrial space, such as Amazon, Alibaba or ASOS. Yet there will be a long tail of occupiers – of both industrial and office space – who respond to next wave technologies over the longer-term. This will generate churn and change in real estate markets for some time to come.
For more insights into the dynamics shaping occupier decision making and the implications for global real estate markets, take a closer look at (Y)OUR SPACE