Rise of the machines – a Terminator scenario for jobs and office occupier demand?

Most adults, young, old or middle aged will have come across The Terminator films at some point. Whilst they do not feature on my A list, I have to admit there is something interesting which elevates them out of the usual run-of-the-mill. Perhaps it is the mixture of action and ideas combined with Arnold Schwarzenegger’s memorable performance and delivery of those famous foreboding words – ‘I’ll be back!’

Most will be familiar with the plot which centres around a future society where artificially intelligent machines have seized control and are attempting to exterminate what is left of humanity.

Recently the film’s plot line resonated again with me, after reading an article in Estates Gazette titled Real estate needs to respond to robots.  The article suggests a ‘second machine age’ which could lead to a staggering 40% unemployment across the developed world by 2030. A 2013 paper by Carl Benedikt Frey and Michael Osborne, of the University of Oxford seems to back up the concern around technological unemployment – arguing occupational categories vulnerable to increasing automation might include accountancy, legal work, technical writing and a raft of other white collar occupations.  If these forecasts are realistic, it would certainly have an important knock on effect for office occupiers whilst, one would think, severely curtailing future demand.

However, my view is that long term demand for office space need not necessarily diminish with the advent of new technologies.  We have seen many technological advances in the past, from the telephone to the computer, to the smartphone. Yes, some of these have had important consequences for the type of employment on offer and the way that office space is occupied, but overall employment levels and office demand have held up pretty well. It is my opinion that technology is the not the primary driver of office demand. It is important yes, but not the be all and end all. I believe fundamentally that demand moves in line with the economic cycle and that other influences such as rising density, technology etc are not strong enough to change that basic dynamic.

I adhere to the economic idea that, by raising productivity, any automation which leads to job reductions will increase incomes. Thus generating demand for new products and services, which will in turn create new jobs for displaced workers. The balance in employment across sectors will change and probably also workplace practices. This has been the case historically and I have no reason to believe this will be any different in the future.

Despite changes in technology I think most people still work in offices. Developers will of course need to remain vigilant and responsive to technological innovation and changing workplace requirements – to forward plan for these changes.  But this is part of their remit and goes with the territory.

So to conclude – are robots going to rise up and steal our jobs and our need for office space?  They did not succeed in the Terminator films – and neither will they in real life! Robots are here to stay – but as our friends rather than enemies – an aid hopefully to higher productivity and higher wages.

I’ll be back with a new blog soon…!