Smart Buildings

“The Office has to be Interesting, or Else People are Just Going to Work from Home”

"Technology is exponentially advancing, delivering innovations that will fundamentally transform consumers’ lives and business operations. This rapid technology adoption means companies have to be light on their feet,” states a recent opinion piece from global real-estate firm JLL’s Australian office. “How can you create an agile workplace that allows you to quickly shift your business model and workforce to take advantage of new opportunities?” the article asks, before highlighting four key trends impacting the future workplace. The emergence of the Internet of Things in Buildings (BIOT) has provided a way to further tailor spaces for the unique demands of each customer. It is no surprise then, that JLL seeks to place the physical office space at the center of this new era of work. “At a time when technology enables us to work from anywhere, office environments will represent so much more than a workplace. They will be the center of value creation within organizations […]

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"Technology is exponentially advancing, delivering innovations that will fundamentally transform consumers’ lives and business operations. This rapid technology adoption means companies have to be light on their feet,” states a recent opinion piece from global real-estate firm JLL’s Australian office. “How can you create an agile workplace that allows you to quickly shift your business model and workforce to take advantage of new opportunities?” the article asks, before highlighting four key trends impacting the future workplace.

The emergence of the Internet of Things in Buildings (BIOT) has provided a way to further tailor spaces for the unique demands of each customer. It is no surprise then, that JLL seeks to place the physical office space at the center of this new era of work.

“At a time when technology enables us to work from anywhere, office environments will represent so much more than a workplace. They will be the center of value creation within organizations — areas where employees, outside experts, and partners come together to work on new products, services, and ideas. New types of space will emerge, and accelerator and incubator spaces will become vital components of workplace and innovation strategy,” the company states.

While it is understandable that real estate firms want to keep the future workplace discussion rooted in the physical world, the reality is much more virtual. Remote work, freelancing, the gig economy, digital nomads, and virtual offices, represent powerful trends that could ultimately threaten the traditional workplace. The statistics are compelling, as discussed in our May 2019 article ‘Freelance Work Culture is Laying the Foundations for the Virtual Office’ and in more depth within our 2017 Future Workplace report.

“An office building does not necessarily need to be a physical structure made of bricks and mortar, glass and steel. It is, in essence, a place that companies utilize to bring all their staff together to facilitate the smooth operation of their organization, and that definition does not specify a physical space. The future workplace may, and is, in fact, likely to be a virtual space,” reads our ‘Future Workplace’ report. “This future has already been sneaking up on us through the remote working and digital nomad movements,” it adds.

This virtual future is still some way off and hope is not lost for the physical workplace yet. Firms like JLL are pushing the boundaries of what a building can do for tenants and occupants, fighting against flexible working trends by increasing the agility of buildings and physical workplaces by harnessing the power of data. In fact, be it the virtual office, remote connectivity, or the smart physical spaces, these workplace evolutions are all driven by our better use of data.

“In the future, advanced analytics applications in your office will continually capture data from sensors, wearables, and smartphones to monitor interactions and work inside,” JLL underlines. “Data will drive design, linking business strategic aims and day-to-day operations. Workplaces will become more modular and will be cost-effectively redesigned more frequently. You can use this data to suggest design interventions that will enhance business performance.”

Early commercial real estate adopters of data analytics are twice as likely to “be in the top quartile of financial performance” among peers, five times more likely to make faster decisions, and three times more likely to execute as planned, according to a JLL corporate report. In buildings, data was primarily used to improve energy and operational efficiency of building systems, however, in recent years the focus has shifted to human occupants.

“With workspaces being flooded with sensors, enterprises are accumulating unprecedented levels of data,” states our report Towards Data-Driven Buildings: Big Data for Smart Building 2018-2023. “Reliable, granular data from building systems and IoT connected sensors is critical, not just to efficient building systems operation, but also to providing empirical evidence of the ways in which office spaces are being used by today’s building occupants, and create workspaces that adapt to employee needs and enables them to do their best work.”

The largest influence of business performance is the output of employees. In the world of commercial real estate, the output of these “occupants” can be enhanced by using the building to improve their health, wellbeing, mood, and concentration, which could help to increase productivity. The bottom line for businesses is their bottom line. As it has always been. The difference now is that the smart building has demonstrated its ability to enhance productivity.

“The tremendous value organizations place on their people extends to real estate, as executives realize that giving people a job and a place to work is not enough—you need to create a space where they want to be. Human experience is a key differentiator for how people engage with an organisation — both strategically and operationally,” JLL explains in the context of retaining talent from the tech-savvy emerging millennial workforce.

Millennials will make up 75% of the workforce by 2025, and Generation Z (born since the year 2000) began to enter the workforce from 2018. These are generations that have grown up with digital and connected technology, and they will prioritize smartly designed and technology-rich workplaces when choosing between employment options. Driven by the desire to attract the best young talent, tenants will increasingly choose smart buildings for their physical workplaces or consider more remote and virtual options that are also popular with younger workers.

The fourth and final trend highlighted in JLLs recent article labels internet connectivity as a key driver of location choices for businesses. Highlighting that at least 80% of the world’s adults will own a smartphone by 2025, the rapid rise of connected devices, cloud computing, and the imminent rollout of 5G networks. These technological developments bring agility to the building but also to the workforce, wherever they may be.

“The world of work is changing. As disruption and uncertainty become the new status quo, smart companies will transform their workplaces to be agile and adaptable to ever changing economic, societal and technological realities. Executives will improve their workplaces to serve as the center of innovation and create experience-rich environments that help attract and retain talent,” JLLs opinion article concludes. “Real estate’s potential to help an organization achieve its ambitions is bigger than it has ever been—and has only begun."

JLL’s significant interest in our physical workplace may mean they ignore the virtual threat somewhat but also makes them a driving force in the smart building industry in its efforts to offer the flexibility demanded in the modern workplace. In addition to its real estate business, JLL’s independent venture capital arm ‘Spark’ has funded a variety of proptech startups that improve our physical workspaces. According to Spark’s Head of Growth, Andrea Jang, “the office has to be a compelling and interesting place to work, or else people are just going to work from home.”

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