Nick Coote, Director of Office Agency at Lambert Smith Hampton, takes a look at the key underlying forces that have been transforming our economy and culture, having a visible impact upon office space demand and use.

A fundamental shift is underway

A creative class is creating a forceful change agenda. As hypothesised by Richard Florida in his influential book “The Rise of the Creative Class”, Florida’s widely accepted premise is that, through all the social changes caused by technology and globalisation, an even deeper force has been at work – the rise of creativity as a fundamental economic driver.

We are seeing the rise of a new social class as a result. Spanning science and technology, arts, media and culture, traditional knowledge workers and the professions, this new class is a significant part of the modern workforce.

A new workforce with new expectations

Building better, more vibrant locations, Florida argues, is not about attracting companies with handouts and tax breaks, but rather, building a ‘people climate’. In this context, openness to all kinds of people, regardless of their gender, race, nationality or sexual orientation, is an economic necessity.

The talented are favouring cities over suburbs and the urban centres are challenging the suburban out-of-city locations for talent and high-tech industry.

This dynamic can be seen in action as Silicon Valley in California loses traction against the urban centre of San Francisco. Similarly, here in the UK, the Thames Valley (renowned as the UK’s Silicon Valley) is losing traction to London, which, in recent years, has attracted ‘new’ technology giants such as Google, Amazon, LinkedIn and Facebook.

“In a modern, knowledge-based economy, city size matters like never before. In the nineteenth and twentieth centuries, a factory would be located where you could find raw materials, power and cheap labour.

Today, in a services based economy, what investors are looking for is not a river to dam, but access to a deep pool of human capital.

There is a powerful correlation between the size of a city and the productivity of its inhabitants.

The top 600 cities in the world contain just 20% of global population but create 60% of global GDP”

George Osborne, Chancellor of the Exchequer

A new workforce requires a new workplace

The dawning of this new creative age has led to more respect for life/work balances and sustainability. Businesses must seek to maximise their ability to hire and retain the best talent, so if the people are urbanising, then so too will the businesses. They are seeking to maximise the productivity of their workforce and the leading mantra in this regard is ‘flexibility, communication, collaboration’.

Today’s ‘modern workplace’ is open plan, with few private offices, incorporating flexible meeting rooms and breakout areas. The preference is for everybody to be on one floor, or as few floors as possible, to engender communication and collaboration, with as few physical barriers as possible.

A new, agile, way of working

The ‘modern workplace’ is the operational office platform – how that platform is utilised brings us to the concept of ‘agile working’. This involves empowering employees to work where, how and when they choose, in order to maximise their productivity and deliver the greatest value to the business.

What does this mean for the Northern Powerhouse?

To succeed in this ever-changing world, the Northern Powerhouse must compete in the global market by offering a credible, creative, knowledge-based economy that can challenge other major cities in Europe and beyond as a place to locate, live, work and succeed.

It has many of the ingredients needed to create a vibrant location to attract the creative talent; from world-class arts and culture, to the latest music arenas and sporting facilities. In addition, it offers substantial cost advantages over London and the South East.

The Northern Powerhouse is a ‘whole greater than the sum of its parts’ concept and both the challenges and benefits of connecting its cities politically, culturally and physically are clear.

"Cities are central to innovation and new technology. They act as giant petri dishes,

where creative types and entrepreneurs rub up against each other, combining and recombining to spark new ideas, new inventions, new businesses and new industries.”

Richard Florida, Wall Street Journal – ‘The Joys of Urban Tech’

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