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News & opinion

6 AUG 2018

AI and your workspace: A make-over era for businesses

Looking to 2020 and beyond, we expect a shift in workspace-demand due to the influence of the Generation Y and Z workforce and possible mass adoption of AI. In an RICS-Colliers International report launched at the Corporate Real Estate Conference 2018, we investigate key changes that will impact corporate real estate and discuss how occupiers and developers can harness the potential of this change.

Three key factors that should influence corporate real estate decisions over the next five years are highlighted in the report.

AI to add uncertainty to future headcount and talent requirements

AI and automation have the potential to disrupt many industries since it will replace many routine and replicable jobs. As AI becomes more common in workplaces, uncertainty over headcount and space requirements will increase. The older strategy of acquiring sizeable, traditional office spaces may no longer work.

The workforce is changing, and workspace requirements should follow

It is estimated that by 2025, millennials will represent 75% of the global workforce. This rising quotient will influence the layout and design of office space, as millennials are highly conversant with technology. To attract and retain talent, it is critical to provide innovative built environments commensurate with the expectations of employees.

New government policies drive diversified business opportunities

Specifically in India, the demand for Grade A office space has been traditionally driven by technology companies, who account for 56% of total office demand. Although we expect this to continue, we expect the share of engineering and manufacturing companies to increase. We also expect this change to be driven by new government policies, which should considerably alter the composition of future occupiers.

"The industries that will be impacted most by Artificial Intelligence (AI) are incidentally the largest occupiers of office space, namely the IT/BFSI sectors,” says Amit Grover MRICS, Director of Office Business, DLF, who spoke at the conference. “What will happen to demand for office space when the white-collar workforce disappears? The industry will have to figure out a way to motivate people to come to the office. This could be the facilitation of interaction among co-workers — employee collaboration is a big demand-driver.”

Health, productivity and design

The conference debated the nuances of a changing physical work environment, health and wellness at work, and the institutionalisation of corporate real estate assets.

It is only a matter of time before the idea that buildings influence the health, wellbeing and productivity of their occupants starts influencing design, financing and leasing decisions. “Employers will have to create work environments that promote health and wellness to cut back on loss of productivity,” said Nimish Gupta, Managing Director, RICS South Asia. “Globally, employers are looking at how automation, the Internet of Things and AI will impact workspaces and to what extent it will reshape them in years to come.”

Many organisations look to trend-setters, such as Google or Facebook, to set a path for workplace design that will appeal to millennial staff. But Girija Rangaswami, Head of South India, Workplace Resources, Nokia, argued whether emulating these workplace models is correct for all sectors. “Are these offices productive?” Rangaswami asked conference attendees, “there are some things that may look nice in a workplace but are staff activities and design directly correlating to business results? Occupiers much adopt measures to monitor and support workplace-related wellness programs.”

Replacement or compliment?

Nayanan Varadarajan, Head of Real Estate, Standard Chartered Bank, and Ganesh Kavattur, Senior Director of CRES Operations APAC, Capgemini, both spoke at sessions during the conference.

“AI can make a huge difference to the way a workspace functions,” said Varadarajan in agreement with the report’s findings. “I have seen robots used on an office campus. Robots pick up food from the office cafeteria and deliver it directly to employees at their desk. When the robot reaches the reception area, a message pops up on the employee’s mobile phone asking them to pick up their order. Think about the implications of this new process — how much space do you save by not having to facilitate a 20,000-seating capacity cafeteria? It drastically reduces manpower and floor-space demand — this is the real-world impact AI is having.”

However, Kavattur was keen to express that the implementation of technology does not necessarily mean the replacement of humans. “People talk about many jobs becoming redundant in ten years, but what we fail to understand is that we will also have newer job opportunities.

With productivity increasing, there will be an increase in wages, which will lead to more consumption. An increase in consumption will lead to more goods being developed, which means more jobs. You must have people to deploy AI.

“It is no longer a question of whether we should embrace technology, but rather how we ensure that we manage the impact it has on our everyday lives — professionally and personally”.

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