58 TheEconomistSeptember 28th 2019
1F
or centuriesbusinesses have settled
inside the old walls of the City of Lon-
don. Its geography is the same. But inside
the Square Mile’s temples of commerce the
changes have been profound. At the start of
the 20th century offices aimed to maximise
efficiency by mimicking the factory layout
with rows of supervised typists and clerks,
as promoted by Frederick Taylor, an early
American management consultant. In the
1960s less rigid Bürolandschaft (“office
landscaping”) made its way across the
Channel from Germany. The 1980s ushered
in “cubicle farms”. Today open-plan offices
and unassigned “hot desks” aim to flatten
hierarchies and increase informality for
many of the City’s 400,000-odd white-
collar workers.
A tour of three new offices in London il-
lustrates the latest trends. Around 7,000
investment bankers are moving into the
eight-floor, purpose-built European head-
quarters of Goldman Sachs, which has tak-
en 18 years and £1bn ($1.25bn) to develop.
Nearby, a branch of WeWork, a troubled
startup (see next story), rents out co-work-ing space in an old City pile to 2,300 “mem-
bers”, each of whom enjoys half the space
that Goldman affords, and at a third of the
price. Down Threadneedle Street the fin-
ishing touches are being put on 22 Bishops-
gate, a 62-storey “vertical village” where
12,000 workers will soon reside.Room for improvement
What happens in buildings like these mat-
ters far beyond their walls. The corporate
office is an engine of global growth. Across
40 developed countries some 200m peo-
ple, one-third of the workforce, toil at a
desk. Britain’s desk-bound workers take
home 55% of all earnings. Technology and
changing work habits are reshaping the life
of desk-jockeys in the City and beyond—as
well as that of their employers, who man-
age offices, and landlords, who own them.
Start with the landlords. Modern engi-
neering allows developers to create better,
more flexible spaces that tenants increas-
ingly demand. Like everything else these
days, buildings brim with technology. The
Bishopsgate skyscraper will harvest 1mdata points a day, to optimise use of re-
sources such as air-conditioning, and offer
glass that dims noise in open-plan offices.
Now that lifts and toilets can be located on
a building’s periphery rather than its cen-
tral shaft, entire unobstructed floors are
being built. Architects are told to enable
staff to mix on floors and between them to
foster creative thinking; staircases are now
places to meet, not just something you
walk down in a fire drill.
This allows developers to offer flexible
spaces that tenants can adapt over the
course of a 15-year lease. Goldman’s Lon-
don home—which it developed and then
sold and leased back for 25 years—is de-
signed so that some outside walls can be re-
moved and half the space sub-let should it
reduce headcount in the event, say, of a
chaotic Brexit. At 22 Bishopsgate tenants
will have access to 100,000 square feet of
flexible space run by Convene, a rival of
WeWork.
All this means that landlords should ex-
pect to spend more keeping their buildings
up to scratch, says Peter Papadakos of
Green Street Advisors, a real-estate re-
search firm. This may reduce the rental
yield on offices from 5% today to perhaps
4%. More companies are fearful of being
locked into new 10-15-year leases at a time
when automation and the rise of tempo-
rary jobs make it hard to forecast future
headcount. Some firms are opting for co-
working spaces rather than leasing directly
from traditional landlords. Co-workingFuture of the workplace (1)Redesigning the office
The first of several articles about corporate digs examines three new offices in
London that capture how the workplace is being reshapedBusiness
59 WorriesaboutWeWork
60 Bartleby:Hotdesk,coldcomfort
61 TaxingtimesforVestager
61 Netflixv HBO
62 UncorkingLafiteChinois
62 Chinesepharmagrowsup
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