AI and Office Space
There are many reports, views, and predictions about AI and its impact.
The recently released Brookings Institute report, Generative AI, the American worker, and the future of work, starts by noting:
“To date, most of the discussion around ChatGPT and similar technologies has stayed away from work and workers. Other serious concerns are dominating the debates, with far more focus on national security, disinformation, privacy and surveillance, intellectual property, electricity consumption… Attention is spreading widely and quickly, but also diffusely”.
In effect, a lot of the focus has been on the supply side of the CRE equation. While a lot of the above is relevant, electricity consumption is a major sticking point when considering the data centre sector of the industry. Another is the supply of CRE services. But the report continues:
“What is not receiving nearly enough attention are the workers and the content and terms of their work, which are so crucial for delivering the value of AI for society. Attention to AI’s impacts on the world of work and livelihoods has been secondary at best, and mostly conjecture.”
By default, this focus is on demand side of things. What is the impact going to be on workers, work, and of course, the real estate they are housed in? Two (2) conclusions are:
“Existing generative AI technology already has the potential to significantly disrupt a wide range of jobs. We find that more than 30% of all workers could see at least 50% of their occupation’s tasks disrupted by generative AI.”
That’s quite an impact across the board.
Unlike previous automation technologies that primarily affected routine, blue collar work, generative AI is likely to disrupt a different array of “cognitive” and “nonroutine” tasks, especially in middle- to higher-paid professions.”
That’s the piece that will directly affect office space demand.
Where it ends up, we don’t know. What we do know, is the last round of “automation technology” slowly and steadily reduced the use of office space from 15 m2 per person in the mid 1990’s to 10 m2 per person in the late 2010’s. That’s an average reduction of 1 m2 per person per 4 years.
“This time is different”. Yes, it is. But how different? Let’s see what evolves over the next 12 months.
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