Before the COVID-19 crisis, almost half a million people worked in the City of Sydney and its CBD every day.
Many of these jobs were in professional, scientific, and technical services, around 100,000 or financial and insurance services – 88,000.
Rightfully so for the times we are living in 2020 has meant there has been a strong focus on how we work. But as we look forward to a post-COVID world, the question is where will be working?
Before COVID-19 firms and businesses concentrated in major city centres, buoyed by the benefits of agglomeration: the dense clustering of economic activity facilitating mutually positive economic outcomes.
Right now, Australian CBDs are hollowing out as employees are working remotely, bringing leasing of city office space into question. Even when social distancing restrictions ease, a flexible working arrangement including some working from home is predicted to be part of the new normal for many.
We ask, will COVID-19 shift the rationale of job agglomerations?
New ways of working
COVID-19 has forced businesses to think about how they operate into the future, and whether an expensive CBD location is really needed. Office accommodation is a significant expense and the experience of many organisations going fully virtual has shown its effectiveness as a viable option as part of how you do business.
Some advantages of offices remain. Large meetings with external clients can take place in a professional, undisturbed environment. The local coffee shop is not a great substitute. It’s also easier to do creative work that requires generating ideas and bringing them together in new ways in a face-to-face setting.
Needing to meet people in person in professional settings doesn’t mean centralised offices are the solution. These interactions can now occur in places that are central to everyone who needs to attend, often in the suburbs.
This means demand for office or meeting space, and the infrastructure that surrounds it, may now be needed in places they haven’t been before: in neighbourhoods and town centres, and even in industrial or business parks outside of major CBDs.
Workspaces in new places
This change in demand for office and meeting spaces throughout the suburbs raises a challenge for Councils and state governments who have strategic plans in place for land-use planning. In NSW, many Local Strategic Planning Statements have just been completed and are unlikely to have anticipated such a major disruption to neighbourhood and town centres.
Disruption presents an opportunity – local and state governments should be looking at what the changing demand for office space in CBDs means for new uses for office buildings. In the suburbs, there is likely to be growing demand for shared office space, business hubs, meeting rooms, and other business support services. Transport and amenities, such as vibrant main streets will also influence people’s decisions of where they do work.
Councils that are on the front foot in supporting knowledge workers may find their town centres need to grow to provide more daytime services like cafes and eateries. The need for better pedestrian access, and more parking for cars and bikes will no doubt be an early need. There is also a need to think about how the transport system will support expanded suburban centres.
Responding to change
Some changes will happen quickly and Councils will need to act fast to support these businesses and to capitalise on the trend. People have already changed how they work, and capitalising on workers being in their local area can be supported to ensure that their positive influence on places remains.
Other patterns will emerge more slowly as the longer-term impacts of the pandemic become better known. It will mean working in new ways. Councils typically have assets that they can use to try and test new ways of working, allowing for timely responses to new work patterns.
As agglomeration becomes associated with high risk for spreading COVID, it is time to bring new thinking to bear on the future of work, both how we work and where we work.
There are three immediate steps we can take at a local level to respond to these changes:
- Undertake a risk and opportunity assessment to identify the implications of a long-term shift to working from home
- Review land use and employment policies to assess if they are flexible and robust enough to respond to these changes
- Identify local assets that can use be used to test local work hubs, temporary meeting spaces, or bike parks using pop-up office or parking formats.
This article is part of our Future of Work discussion series.
Astrolabe Group are currently thinking about the consequences of COVID-19 disruption and what this might mean for the future of work: how and where people will be working, and what this means for employment, economic activity, and our cities and regions.
Martin Musgrave is the Director and Chief Economist at PPM Consulting. He is an urban economist and works with Astrolabe Group on several projects. Martin is currently focused on helping organisations to work collaboratively to find ways forward post-COVID.