These days, companies want to be where the action is and that is in the centre of the city. Their location mantra is downtown, downtown, downtown. Most of the FDI coming to Europe is going to cities. Much of it is knowledge-based service activities, which want to be where the talented people are.
Cities provide all the essential location features. They have international connections, easy access to financial institutions, universities for knowledge and talent development, an active property market, and they are great at bringing people together. They offer a diverse marketplace where supply and demand can meet. You cannot get that essential mingling and mashing of people anywhere else.
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It is the people factor that makes the city centre so attractive. Both demographics and technology are impacting significantly on location and space preferences. Generation Y (the age group born after 1980) is now making its mark on the workforce. These people have grown up with technology, and they like being mobile. They want to live and work in the city and to work flexibly. This means a change from the conventional office set up to more flexible open work space for improved connectivity and collaboration.
This is great news for businesses as they can reduce their office space – the average space occupied per person is being reduced from about 60 square metres for conventional office space to nearer 30 square metres for the new distributed work space.
It is also giving a new lease of life to city centres as Generation Y can get to live, work and play in their desired urban setting. New employment areas such as Tech City in the Old Street/Shoreditch area of London and Barrow Street in Dublin are examples of this trend. Generation Y now rules, and successful FDI locations need to make sure that they offer the appropriate offices and living environment to keep Generation Y (and their employers) happy in the city.
Douglas Clark is director of Location Connections, a site selection and FDI consultancy.