UK: Technology, Employment, And The Impact On Real Estate

Last Updated: 23 October 2015
Article by Will Matthews

Most Read Contributor in UK, August 2017

Technology is constantly changing the way we work, and the work that we do – so what effect does that have on where we work?

1876 called, it wants its jobs back...

When Alexander Graham Bell made the first phone call in 1876, it would have been hard for him to foresee his invention eventually providing employment for over 100,000 telephonists and telegraph operators.  Yet the following 100 years saw a steady increase in the number of people working in this sector, before numbers tailed off during the 1980s and 1990s as fax machines, answerphones and computers reduced their workload. 

History is packed with examples of technologies that spring up to create new industries, sometimes displacing earlier ones, before eventually being superseded themselves.  It isn't surprising that these big leaps can be disconcerting: it is easy to show how technology can render whole industries obsolete, but its role in the formation of new jobs is usually far more chaotic, unpredictable and harder to pin down.

Understanding these destructive and creative forces forms part of our research into the impact of technology on people, jobs and the spaces in which we work  - and is the theme of a report, From brawn to brains,  recently released by Deloitte. 

This detailed analysis charts the impact of technology on UK jobs since 2001, with the headline findings showing that it in fact contributes far more employment than it destroys:  over this time, technology has potentially led to the loss of about 800,000 positions, but helped create 3.5 million.  The economic impact of this change is huge, with pay in these new jobs being on average almost £10,000 per year higher than in those being replaced.  And far from this being a London phenomenon, the benefits to employment and wages have been replicated across all regions of the UK.

Are employees electric?

Delving deeper, the analysis also shows that various forms of automation have led to a dramatic shift in the type of work that is performed.  Even during this relatively short timeframe, the UK has seen major reductions in many routine jobs, both cognitive and manual - the number of sewing machinists has fallen at roughly the same pace as that of personal assistants and secretaries.  Automating this type of employment has become comparatively easy and cost effective. 

In contrast, there has been substantial growth in non-routine jobs, such as project management and care work.  These types of occupations benefit greatly from technology, but as yet cannot be replaced by it. As they grow, they are creating demand for property, but not always in the traditional sense - seven of the top ten growth occupations since 2001 mainly use property that would fall outside the usual definition of office, retail or industrial.

A more subtle way to consider the impact of technology is at the level of tasks, rather than whole jobs.  Not every job can be automated entirely, as many have aspects that are currently just too complicated for automation to be effective. But by taking away their most tedious routine chores, technology can free up employees to spend time on more varied, more productive, and ultimately more interesting work. 

If the type of work that is being done changes, it is logical to think about how the workplace environment needs to change too. Regimented banks of desks may be an efficient use of space where employees are undertaking routine tasks with little need for new thinking or collaboration, but if automation paves the way for roles to become more creative and collaborative, this layout may no longer be optimal.

Tomorrow never knows

It is clear that future technologies will continue to reshape employment in the economy as capabilities evolve.  Indeed, our previous research, London Futures, (in conjunction with Carl Benedikt Frey and Michael Osborne of Oxford University) shows that 35% of today's jobs are at high risk of being automated over the next 10-20 years, but it remains frustratingly difficult to predict the new occupations that will emerge.  Who, in 1995 could have described the technology companies that are today taking space in the UK's newest and largest buildings?

The lesson from these findings is that faith in technology's ability to create jobs is justified - history shows this to be true whether the example is the telephone of 1876 or the smartphone of 2006 – and this should drive further demand for real estate.  But its impact on the type of work we will do in 2026 or 2036 and, therefore, how we should design and locate real estate in the future, is harder to predict.

This article appeared in Estates Gazette on the 3rd of October.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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