It’s no surprise to say that technology is having a significant impact on the workplace and the use of corporate real estate. The fast pace of change has seen technology impact all aspects of business, government and culture, as well as personal life, with a constant flow of new innovations and solutions helping us to do things more quickly and efficiently. Equally, technology also provides a challenge to business and, more specifically, corporate operations, with a whole array of disruptive technologies.
Disruption is indeed now running a swathe through a whole spectrum of industries. CoreNet Global’s recent report, The Bigger Picture: The Future of Corporate Real Estate, attempts to capture the impact of technological change, and a variety of other factors, that will influence, disrupt and transform the corporate real estate (CRE) profession. As business strategy and operations are reshaped and consumer preferences change, we will find that the ‘how’ and ‘where’ people want to work will transform.
Providing an opportunity to take stock of where we are and, importantly, the direction we are heading, The Bigger Picture Reportdraws on the expertise of many industry professionals. It provides multiple perspectives on the forces that are instituting change. These range from the global economy, people, talent and wellbeing, environment and energy, corporate social responsibility, risk mitigation, and, of course, the impact of technology and subsequent cyber risk.
The impact of technology
The impact of rapid technological change was also at the heart of many of the presentations at the recent CoreNet Global 2016 Summit held in Amsterdam. In the visionary keynote from entrepreneur and innovation expert Mark Stevenson, he challenged delegates to rethink how they incorporate technology into their business environments. Stevenson argued that the digital age has now already passed (digital was the “cocktail sausage before dinner….it was the trailer….we’re done!” he told delegates). He went on to share insights into a potential future business landscape where the ways in which we work, and the businesses that provide services and products, will be almost unrecognisable due to the fast paced and democratising potential of technology. Such revolutionary and dramatic change may be some way off, but it is still imperative that institutions and individuals address the challenges and opportunities posed in the here and now.
The real world application of emerging technologies is impacting how corporations manage and use their real estate and the ways in which people live and work
The real world application of emerging technologies is impacting how corporations manage and use their real estate and the ways in which people live and work. These changes, in turn, impact the public perception of the corporate enterprise and reflect back on overall efficiency, sustainability and profitability.
The Bigger Picture Report seeks to crystallise the key areas of technology that are creating new styles of living and working. These include the emergence of intuitive mobile technologies that mimic human behaviours that are becoming increasingly affordable and available across the globe. The proliferation of individual technology devices-of-choice is leading to an increasingly mobile and connected workforce that is changing real estate requirements in terms of how much physical space is required, where facilities are located, and how space is configured, utilized and managed.
The increase of remote and co-working spaces coupled with the societal shift to mobile or flexible work practices is necessitating a greater emphasis on the technology infrastructure within most major corporations. This in turn extends to an increasing awareness among corporates of the vulnerabilities of their technology systems and security protocols, particularly in relation to data protection both in and out of corporate premises. Cyber risk, in addition to physical risk, and the ways in which CRE professionals need to focus on this growing area of concern is a particularly interesting takeaway.
The freedom of knowledge workers
Tech-savvy knowledge workers have the freedom today to choose when and how they work, and employers are waking-up to this. The next generation workplace will see CRE professionals providing technology enabled environments that provide both the employee and the organisation with greater flexibility and agility. Future ‘multi-modal’ workplace networks will provide an even greater number of workplace choices. People will elect to go to workplaces that provide the right social or professional interaction to help them work most productively.
We are seeing CRE teams becoming ‘curators’ of space, facilitating not only the right level of amenity but also the right operational mix to maximise business outcomes
We are seeing CRE teams becoming ‘curators’ of space, facilitating not only the right level of amenity but also the right operational mix to maximise business outcomes. We are seeing a world where employees are increasingly seeking to dictate a work style that is consistent with their chosen life style, and corporates will need to learn to adapt to these changes in order to ensure that they can continue to attract and crucially retain, talented workers.
The technology enabled mobility of the workforce directly impacts the traditional office model and leads to greater uncertainty of accommodation needs. This in turn demands greater flexibility from corporate leases. Changing space footprints to meet the demands of a more collaborative, less desk-bound workforce will lead to shorter leases that will impact landlords, developers and investors. New development funding models will need to adjust, as will valuations predicated on long-term lease commitments. Real estate financing models will become more global and complex, generated by teams leveraging the technological capabilities of the spaces they are funding. Competition to lease space will increase with large landlords becoming ever more focused on the services to be provided to their occupiers.
Also of note is the advance of artificial intelligence and cognitive technologies; disruptive technology that will impact the amount of physical space currently needed to host transactional work. Some industries will see a shrinking human workforce. Up to sixty percent of those currently doing transactional work may be replaced or augmented by AI, automation, smart cognitive-thinking machines, or the next generation of robotics. On the surface this thinking may sound futuristic, but AI and automation are already happening. To make the point, simply make a phone call to your bank or cell phone provider.