Chris Pieroni, Operations Director at Workspace Group Plc, London’s leading provider of space to new and growing companies, this week gave a keynote speech at the RIBA Offices Conference.
During his speech, Pieroni stated the role of the office, as we know it, is changing as are the companies that increasingly occupy them. As a result, landlords need to think more carefully about the design and build of their properties.
As recently revealed in a report by Google, the Standard Industrial Classification (SIC), originally created in 1948 for a 19th century manufacturing economy, fails to properly take into account the new metrics for growth in our new “digital economy”. According to Pieroni, the same applies to today’s offices.
The types of businesses that will form the bulk of economic growth in the future, and therefore the bulk of new office space requirement, will be fast-growing small businesses. Traditionally placed under the umbrella term, SME, these are not the ‘traditional’ SMEs as we have come to understand the term but are fast-growing small businesses. According to Goldman Sachs research on 10,000 UK Small Businesses, just 1% of these fast-growing small businesses were responsible for 23 per cent of new employment between 2007 and 2010.
Many of these high-growth companies make up the TMT sector, currently a favourite with many property companies. However, at the conference Pieroni argued that in fact the TMT sector is not just one sector anymore but is now three different sectors, each with its own specific locational and business requirements. He stressed the need for property companies to adapt to these changing requirements as the role of the office and the staff in them, continues to change.
For example, an average of 15% of office floor space is currently used for storage. What, asked Pieroni, will be the effect on this following the greater impact of cloud computing? Similarly, will the greater use of cloud effect enable greater flexibility in workforce and a wider geographic spread?
Yes, according to Pieroni, who said that these are the reasons why the proportion of space occupied by large companies is falling and why companies need to adapt to cater to the developing needs of business. For example, digital connectivity will be a primary consideration over storage space when it comes to occupying office space and landlords should be responsible for providing VIOP quality connections, handsets and data storage.
Chris Pieroni, Operations Director at Workspace Group, said:
“Over the last 15 years there has been a fundamental change in the makeup of companies in the UK and a very large proportion of growth is coming from these ‘fast-growing small businesses’. These businesses have different needs to a ‘traditional business’ that would inhabit a ‘traditional office’ and so if they are to thrive then buildings will need to be designed and built offices with these different needs in mind.
“At Workspace we have tried to keep these differences and values at the heart of our redevelopment and refurbishments. For example, these ‘fast-growing small businesses’ place importance on the community provided in office buildings, enabling greater collaboration among small businesses, as well as greater ability to grow and contract with greater flexibility.
“Our flexible lease lengths, as well as our business spaces are designed to suit the needs of new and growing companies. Our co-working offering, Club Workspace provides the opportunity for companies to grow right from inception with co-working spaces and communities across London, specifically designed to suit the needs of start-ups, digital companies as well as larger corporates using co-working space to suit the needs of a geographically diverse staff base. It’s not only offices that will see the effects of this new emphasis but it will continue to influence any public ‘community’ space, be it simply an office or a hotel lobby or even a library.”