Today’s Powerhouse Technology & Property
For those of us working in the service industries we are all smack-bang in an era of sweeping change in the way we all work. Much of the change is being energised by technology and by tech related businesses like Google, Amazon and LinkedIn.
In Sydney Amazon’s substantial growth requirement will see them up grade from 3500sqm to 10,000sqm. LinkedIn recently committed to approximately 4000sqm at 1 Martin Place, while Intuit, who were not even in Australia until recently have secured 2200sqm in the top 2 floors of 1 O’Connell Street.
Technology combined with the demands of climate change and the need to better use resources (capital and people), plus shifts in global economic power, big shifts in population demographic and consolidation of the number of people living in big cities are key drivers.
But it is technology at the core and that extends to areas like robotics as we start thinking more about robotics as part of the technology mix, because we’ll see ‘machines’ with the ability to work, act and think independently moving out of the factory into the office.
Imagine a city built around such a mix of technology, its not that hard because our built environment has always been shaped by technology, it’s been that way since the wheel. Usually transport technology, like the oxen and cart, or the steam train, canal or cars, but soon the dominant technology will be communications technology, the workhorse of a modern economy.
Beyond The PC
Moving way past the familiarity of the PC and thinking about the full spectrum of technology into robotics for example, how will this impact property?
Looking to the future it’s predicted that around 2021 the first driverless cars will be licensed, and by 2022 there will be hotels that are 100% robot-served.
Soon self-drive cars will not need to be parked in expensive CBD towers, your car could drop you off and then self-park outside the CBD until its time to come and collect you, so there’s a potential for more space to be used more productively and hopefully less traffic congestion. Then we should think about some management services that could well be delivered by robots.
The function of property as a result of technology is fast becoming far less ridged, more connected, less like buildings on isolated islands.
It’s The Knowledge
Knowledge intensive economies, fuelled by technology that thrives in the CBD create an energy that’s possible to feel. Walk down Sydney’s Martin Place, Melbourne’s Collins Street and there’s a tangible buzz.
The modern CBD has a heavy concentration of economic activity (Sydney $64b) and this concentration happens despite very high rents. However technologies play a role there because industries like finance are reaping the savings that technology delivers and so they can afford to pay high-end CBD rents. If banks no longer have to finance a branch network, they can spend that money in other ways.
They can also use the Cloud and reduce IT costs. The Internet is also delivering cost savings that we all experience everyday. Even the use of mobile phones reduces some costs by comparison to the big telephone systems of the 1980’s. Remember PABX, and fewer businesses now have a receptionist as such.
The Rise of Skype
Skype is a familiar example of technology impacting work. According to data from TeleGeography Skype’s international traffic volume continues to soar. TeleGeography estimates that Skype’s on-net (Skype to Skype) international traffic grew 36% in 2013, to 214 billion minutes.
International telephone traffic from fixed and mobile phones also continues to grow, but at rates well below the 13% average of the past 20 years, and the benefits of traffic growth have largely been offset by steady price declines.
Skype added approximately 54 billion minutes of international traffic in 2013, 50% more than the combined international volume growth of every Telco in the world.
But despite the rise and positive impact of technology we need to continue to invest in infrastructure, and with the Sydney and Melbourne CBDs representing some 10% of the total Australian economy, it’s almost impossible to wonder why there’s not universal support for the NBN.
If you catch a Taxi from one part of the city to another and that taxi is NBN service connected, in a flash you can pay by credit. No fumbling with paper dockets and receipts, image day-to-day communications at every level of business working like this.
However with all potential up-sides of technology, CBD areas are under pressure to function better and this can be seen in the growth of light rail. Light rail is being used in urban areas across the world to move people more effectively.
While buildings become smarter, a line of parked buses on the Sydney Harbour Bridge or snaking along Brisbane’s Coronation Drive is not a good look. Congestion in Sydney’s CBD costs $5.1 billion/annum and so the new light rail looks like a good idea, and Sydney is not alone, there are now some 400 light rail networks world-wide, 200 being planned and 60 under construction. The G’ light rail on the Gold Coast connects almost 18,000 resident, business and student commuters every day.
Smart Offices Mature
With such wide access to technology and a bright future it’s reasonable to ask what’s a suitable definition of a Smart Office. Today at its core it seems that smart offices encourage collaboration with building a key facility at the intersection of learning and knowledge.
Teamwork is now common across all formats of work and office space needs to be able to expand and change to meet these demands.
As office amenities increasingly become recruiting tools, more companies are embracing elements of the outdoors—using plants and a sense of space to create enticing and ultimately more productive workspaces.
Aided by technology offices that were once only places for intense work in separate cubicles are now designed to incorporate spots to escape and socialize.
The idea is like creating neighbourhoods and that suggest a more co-operative and friendly association between the people in the space, between aspects of a business. Given the importance of CBD areas to our economy it’s easy to appreciate how smart offices assist observation and the sharing of information important in knowledge based economies like Australia’s.
For management some of these trends will require a complete re-think as the character of the entire workforce changes. Working in virtual collaboration will be common, possibly in new purpose designed office neighbourhoods and business clusters because face-to-face contact along with the benefits of technology will remain an imperative.