eBusiness and the City of London office market
| DOI | https://doi.org/10.1108/14635780310483638 |
| Published date | 01 August 2003 |
| Date | 01 August 2003 |
| Pages | 348-365 |
| Author | Tim Dixon,Andrew Marston,Bob Thompson,Ben Elder |
| Subject Matter | Property management & built environment |
JPIF
21,4
348
Journal of Property Investment &
Finance
Vol. 21 No. 4, 2003
pp. 348-365
#MCB UP Limited
1463-578X
DOI 10.1108/14635780310483638
eBusiness and the
City of London office market
Tim Dixon
College of Estate Management, Reading, UK
Andrew Marston
College of Estate Management, Reading, UK
Bob Thompson
College of Estate Management, Reading, UK, and RETRI, and
Ben Elder
College of Estate Management, Reading, UK
Keywords Electronic commerce, Office buildings, Space utilization
Abstract This paper is based on major survey of City of London occupiers conducted in the
spring and summer of 2002 by The College of Estate Management, Reading. The aim of the
research was to examine how eBusiness was driving process change amongst City office
occupiers, and how this might change locational and space requirements in the future. This
research shows how important information and communications technology (ICT) is becoming in
driving process change for City office occupiers. However, ICT must be considered alongside
forces for dispersal (for example, transport problems) and agglomeration (for example, face-to-
face contact), which are creating a potent mix of factors driving businesses in the City. Changes in
office densities, created by ICT and other drivers, have important implications for future office
space projections in the City. The research shows that caution should be attached to the current
office projections in the City provided in the Lord Mayor's London Plan, and the results also have
implications for continued investment in City offices. It is dangerous to over-simplify density
changes caused by ICT and other factors.
Introduction
In many visions of the new economy, geography is seen as something that can be
transcended by technology. The argument is that information and
communications technology (ICT) is destroying the spatial monopolies of
information and knowledge which have built up in cities as a result of the
competitive advantage offered by using the new technologies over distance
(Gillespie et al., 2001). Face-to-face interaction is therefore seen as being much less
important than before, and as a result participation in the knowledge economy
becomes location-independent, with more ``footloose'' industries prevailing.
This thesis is not new and exponents such as McLuhan (1964) have
frequently predicted that the nature of city form and structure would change
radically as a result of new technology. More recent exponents include
Negroponte (1995), stating that the ``post-information age will remove the
limitations of geography'', and Cairncross (2001), who points out that the
The Emerald Research Register for this journal is available at
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The current issue and full text archive of this journal is available at
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The research was funded through the Company of Chartered Surveyors' Toby Sutton Research
Award, and part of the literature review by the Small Business Support Research Unit of the
Department of Trade and Industry.
eBusiness and
the office market
349
electronic revolution brings about the ``death of distance'' and enables us to
work remotely and shop remotely.
Nonetheless, this view of locational dynamics in the new economy is
balanced by an alternative view. Gillespie et al. (2001) suggest there is a clear
body of research (see, for example, Scott, 1997; Zook, 2000; Dodge and Kitchen,
2000) that indicates companies in the digital media, and other sectors, cluster in
a small number of critical locations. Zook's work, for example, using Internet
registration data, showed that in the USA dot.coms clustered within cities and
within regions. Moreover, there is a whole body of literature on clusters,
building on the work of Porter (1990), for example, which also examines the
reasons for clustering, but which is too extensive to cover in this paper (see, for
example, Simmie and Sennett, 2001; Corporation of London, 2003; for a good
summary of literature).
The general thrust of this and related literature is that the new companies
associated with ICT cluster because of the need for innovation, the benefits of
localised externalities, and the need to cluster around key metropolitan
markets. More recently, empirical work in the UK for the Department of Trade
and Industry (DTI) (Trends Business Research, 2001) identified 154 clusters[1],
representing between 8 and 18 per cent of the UK region.
Knowledge is a basic building block of economic growth and the UK
government is heavily committed to supporting a new economy driven by ICTs
and eCommerce. Various indicators have been developed by the Department of
Trade and Industry in consultation with the Office of National Statistics and other
government departments to measure and benchmark regional competitiveness,
including overall gross value added, labour market measures, education and
training, and capital and land and infrastructure measures. Key patterns are
emerging in the UK knowledge economy (Christie and Hepworth, 2001):
.clustering in and around major cities;
.significant regional divide with a bias towards the south east and east of
England;
.divisions within cities at a local level; and
.pressure points on transport and housing caused by clustering.
But what are the implications of this debate for cities such as London? ``World
cities'' such as London are built on forces of agglomeration which have
underpinned their economic growth. In the aftermath of 11 September one
might be forgiven for thinking that face-to-face contact would lessen, people
would travel less, and that technology would have an even greater impact than
before. However, face-to-face contact (``F2F'') and the pull of cities is still
important, especially for deals involving proximity and trust. For example,
recent research from the USA shows that 40 per cent of American employment
is concentrated in 1.5 per cent of its land area. Moreover, Storper and Venables
(2002) suggest that cities act as powerful clusters or focuses of knowledge
development and exchange.
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