London, United Kingdom
New York, New York
Masdar City, Abu Dhabi
Auckland, New Zealand
Author: Angie Hanke
The growth of the technology industry in America is staggering. In San Francisco’s Silicon Valley, Google and Salesforce annually hire 5000 and 3000 people respectively and the competition to attract new talent is fierce. In addition, more venture capital is available to startups than ever before.
There are huge opportunities for our property industry if we can entice these companies to grow hubs into Australia but many questions surround the issue: How deep is the growth really? How many will grow at the pace of Google? How many will establish engineering hubs in Australia? What should we be doing to proactively encourage the technology industry to come to Australia and how can we prepare our cities to attract them?
To answer these questions, we led a discussion with three property insiders, all directly involved in the tech boom. Among other insights, they highlighted the need to create better flexibility in workplaces, more attractive lease terms and an increased number of shared working hubs. They also identified the need for technology companies to spend more time on workplace innovation to attract young talent in a fiercely competitive market.
The developer’s perspective
James Paver, Development Manager, Leighton Properties
“Australia must first recognize the scale of this opportunity”
I want to paint a picture about the sheer scale of the global innovation boom. In Silicon Valley between 2009 and 2012, $US31.5 billion of venture capital was thrust into tech startups. In addition, Cisco tells us that in 2003 there were only 500 million devices – phones and computers – connected to the Internet, and this year that figure will reach $US25 billion.
What all this says about the commercial property market is that it’s definitely not going to move slowly like in the past. How we communicate and do business is changing. Flexibility and adaptability will be a determining factor in a property’s success. Tech groups now see themselves competing above law firms and investment banks for the pool of university talent, which means they want A-grade, premium spaces.
Government focus is crucial and it’s already underway in some of our cities. The Government of NSW has a six-part action plan to grow the digital economy over the next decade. One of the steps in the action plan is growing Sydney’s digital precinct and, if it’s as successful as the UK Prime Minister’s push to drive tech companies to London’s Silicon Roundabout, the Australian property industry will benefit greatly.
The race is underway right now. We need to lobby government and come up with solutions to attract tech companies to Australia over other world-class cities. To achieve success though, we need to position ourselves as a leader in workplace design, urban renewal and community development.
The tenant’s agent perspective
Mike Franklin, Director, GVA Franklin Shanks
“We need a more fluid arrangement in terms of how we pay for space”
The demand for commercial property is coming more from IT companies than any other sector, which means we have to prepare for a significant shift and approach to property if we’re going to attract the tech industry to Australia.
Traditionally, these companies were based in places like Silicon Valley but what we’re seeing now is a migration from typical tech locations into CBDs. The technology industry attracts younger workers and for them, it’s all about amenity and location. This means any city could potentially be in the running.
As an industry we need to provide flexible, attractive spaces that technology companies can use to entice the best talent. For example, Google is growing so large that the average tenure is one year in some locations. As such they need a workplace that can alter and adapt with their growth. More research into workplace innovation is crucial because the solution has gone far beyond hot-desking and activity-based working. Instead of thinking about square meters per desk we need to think about space per person. An environment that encourages collaboration through breakout spaces, client and entertainment spaces is what companies like Google require. NAB, for example, has created a hub for clients to come in and work in the NAB offices. That’s a great idea and an example of the type of ideas we need to come up with.