Tech Cities

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Cities will be driving globalisation and innovation in the emerging world order.
France recently appointed a tech ambassador to the Silicon Valley. French President Emmanuel Macron named David Martinon as “<a href="https://www.diplomatie.gouv.fr/en/french-foreign-policy/digital-diplomacy/events/article/digital-affairs-appointment-of-an-ambassador-22-11-17" target="_blank">ambassador for digital affairs</a>”, with jurisdiction over the digital issues that the foreign affairs ministry deals with. This includes digital governance, international negotiations and support for digital companies’ export operations.
The appointment is part of France’s <a href="https://au.ambafrance.org/France-s-international-digital-strategy" target="_blank">international digital strategy</a>, which is becoming a focus of its foreign policy. And France isn’t alone in doing this.
In early 2017, Denmark <a href="http://www.wired.co.uk/article/casper-klynge-first-ever-silicon-valley-tech-ambassador" target="_blank">appointed</a> a <a href="http://techamb.um.dk/en/" target="_blank">“TechPlomacy” ambassador</a> to the tech industry. <a href="https://twitter.com/DKTechAmb" target="_blank">Casper Klynge</a> is possibly the first-ever envoy to be dispatched to Silicon Valley with a clear mandate to build better relationships with major technology firms.
In an <a href="http://politiken.dk/udland/art5806849/Danmark-f%C3%A5r-som-det-f%C3%B8rste-land-i-verden-en-digital-ambassad%C3%B8r" target="_blank">interview</a> with Danish newspaper Politiken, Foreign Minister Anders Samuelsen said: Big companies affect Denmark just as much as entire countries.
He isn’t wrong. According to geopolitical strategist <a href="https://www.paragkhanna.com/" target="_blank">Parag Khanna</a>, the world’s top tech companies are <a href="http://foreignpolicy.com/2016/03/15/these-25-companies-are-more-powerful-than-many-countries-multinational-corporate-wealth-power/" target="_blank">achieving more international influence</a> and economic power than dozens of nations put together. In 2016, the <a href="https://www.businessinsider.com.au/chart-us-companies-with-largest-cash-reserves-2017-8?r=US&amp;IR=T" target="_blank">cash that Apple had on hand</a> exceeded the gross domestic product (GDP) of <a href="http://foreignpolicy.com/2016/03/15/these-25-companies-are-more-powerful-than-many-countries-multinational-corporate-wealth-power/" target="_blank">two-thirds of the world’s countries</a>.
Some of these global players are also influential policy actors in their own right. In 2016, <a href="http://foreignpolicy.com/" target="_blank">Foreign Policy</a> presented its <a href="http://foreignpolicy.com/2016/11/17/watch-fps-diplomat-of-the-year-awards/" target="_blank">Diplomat of the Year Award</a> to Eric Schmidt, executive chairman of Google parent company Alphabet Inc. The award was in recognition of Google’s contributions to international relations through empowering citizens globally.
<h2>What’s different about TechPlomacy?</h2>
The recent ambassadorial appointments signify not only the important socio-economic and political roles of technology, but also how diplomacy is evolving and adapting to the disruptive changes in our societies.
These developments mark the prominence of tech-cities on the global scene. Nation states are no longer the only players in international affairs; cities are also taking centre stage.
As opposed to lobbying governments in the world’s capitals, the new breed of diplomats will target tech-cities with multi-trillion-dollar technology sectors. They will also rub shoulders and nurture a direct dialogue with organisations that have gigantic economic impacts. In 2016, for example, Google helped to <a href="https://economicimpact.google.com/reports/2016/ei-report-2016-ca.pdf" target="_blank">inject US$222 billion in economic activity</a> in the US alone.
The so-called “Google ambassadors” won’t be targeting Silicon Valley only. The <a href="http://techamb.um.dk/" target="_blank">Office of Denmark’s Tech Ambassador</a> has a team with physical presence across three time zones in North America, Europe and Asia. It will also connect with tech hubs around the world.
As part of an interconnected planet, these tech hubs will increasingly play a more active role in the global economy. Decision-makers are starting to recognise the imperative to establish good relationships and understand the tech giants’ policies and agendas.
<h2>Cities as autonomous diplomatic units</h2>
The rise of cities as “<a href="https://www.theatlantic.com/international/archive/2013/04/around-the-world-mayors-take-charge/275335/" target="_blank">autonomous diplomatic units</a>” may be a defining feature of the 21st century.
Already, just <a href="http://foreignpolicy.com/2010/08/06/beyond-city-limits/" target="_blank">100 cities account for 30% of the world’s economy</a> and almost all its innovation. New York and London, together, represent <a href="http://foreignpolicy.com/2010/08/06/beyond-city-limits/" target="_blank">40% of global market capitalisation</a>. According to the <a href="https://www.mckinsey.com/mgi/overview" target="_blank">McKinsey Global Institute</a>, the <a href="https://www.mckinsey.com/global-themes/urbanization/urban-world-mapping-the-economic-power-of-cities" target="_blank">top 600 cities generate 60% of global GDP</a> and are projected to be home to 25% of the world’s population by 2025.
McKinsey expects that 136 new cities will make it into the top 600 by 2025. All these new cities are from the developing world – 100 of them from China alone.
These <a href="https://www.mckinsey.com/global-themes/urbanization/when-cities-rule-the-world" target="_blank">global cities appear likely to dominate</a> the 21st century. They will become magnets for economic activity and engines of globalisation. <a href="http://foreignpolicy.com/2010/08/06/beyond-city-limits/">Khanna</a> argues:
<blockquote>
… [C]ities rather than states or nations are becoming the islands of governance on which the future world order will be built.
</blockquote>
He also suggests that <a href="https://www.ted.com/talks/parag_khanna_how_megacities_are_changing_the_map_of_the_world/transcript">connectivity</a> through an expanding matrix of infrastructure (64 million kilometres of roads, 4 million kilometres of railways and 1 million kilometres of internet cables) will far outweigh the importance of 500,000 kilometres of international borders.
<h2>Still more questions than answers</h2>
As more cities assert their leadership on the world stage, new mechanisms and networks (e.g. <a href="http://www.c40.org/" target="_blank">C40 Cities)</a> could emerge. That could signal a new generation of diplomacy that relates and engages with cities rather than bilateral collaboration between nations.
<img src="https://images.theconversation.com/files/201833/original/file-20180114-101498-4zjkdk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
The C40 Cities Climate Leadership Group connects more than 90 of the world’s major cities. The Independent UK
Although these new diplomatic outposts have generated some <a href="http://www.mcclatchydc.com/news/nation-world/national/national-security/article159128749" target="_blank">profound interest</a>, questions remain.
Will this era of tech diplomacy create collaborative ways to develop and achieve foreign policy priorities? Will it increasingly become a unifying global priority?
Do these appointments signify a transformation in international relationships? Will big tech companies also develop diplomatic capacities?
And will we witness the emergence of a post-national ideology of <a href="https://www.propertyobserver.com.au/https://press.princeton.edu/titles/9544" target="_blank">civic-ism</a>, whereby people’s <a href="https://www.huffingtonpost.com/daniel-a-bell/civicism-cities-nationalism_b_1138929" target="_blank">loyalty to the city</a> surpasses that to a nation?
<h2>What comes next?</h2>
Not everyone will be excited by these appointments. Many would downplay their significance. Others would argue that tech companies have been engaged globally for years, and that they do this anyway as part of their “business as usual” activities.
Whether you embrace or object to it, a new world order is emerging around cities and their economies, rather than nations and their borders. These cities may ultimately chart pathways to their own sovereign diplomacy and formulate their own codes of conduct.
<img src="https://counter.theconversation.com/content/89959/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">It is anyone’s guess whether the future will bear any resemblance to TechPlomacy or something else we haven’t yet imagined. The significance of these appointments will become clearer as the envoys go to work and we begin to understand the possibilities.
<a href="https://theconversation.com/profiles/hussein-dia-110689" target="_blank">Hussein Dia</a>, Associate Professor, <a href="http://theconversation.com/institutions/swinburne-university-of-technology-767" target="_blank">Swinburne University of Technology</a>
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/tech-diplomacy-cities-drive-a-new-era-of-digital-policy-and-innovation-89959" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

Cities drive a new era of digital policy and innovation

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Technology firms have become a key driver of Sydney CBD office demand, according to recent research by property firm Cushman &amp; Wakefield.
Macquarie Park, previously Sydney’s main tech hub, has been displaced by the CBD because of the growth in cloud computing, technological innovation in a range of service industries and a desire to attract and retain the best talent to offices which are strongly serviced by public transport and close to retail precincts, says Cushman &amp; Wakefield’s Tech and the city report.
In fact, tech is expected to take over from the finance and insurance sector as the key driver of CBD office demand in Sydney. Demand from tech companies for CBD space is expected to grow more than three times that of the finance and insurance sector over the next five years, it says. 
“Large tech firms taking up residence in Martin Place over the past few years has been a well told story for the Sydney CBD office market. However, rise of tech firms in the CBD has been much broader based with many smaller firms taking up space across the CBD,” it says.
Over the past few years Apple, Dropbox and LinkedIn have taken up office space in Martin Place, but the expansion of tech firms in the CBD has been much broader based. 
Cushman &amp; Wakefield Research identified around 40 leases signed by tech companies over the past 12 months across the CBD, in building grades ranging from Premium to C. Lease size varied considerably also with space requirements ranging from 100 sq m to over 17,000 sq m. 
<a href="https://www.propertyobserver.com.au/images/2017/07/31/Tech-main.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/07/31/Tech-main.jpg" alt="">
The range of tech tenants that have taken up space highlights the diversity of the sector. While LinkedIn is known for social media, Amazon for e-commerce and Apple for products such as phones, tablets and computers, tech is extending its reach into a variety of service sectors. For example, tech tenants that have recently leased space in the CBD have areas of speciality including labour hire; education; travel; expense management; digital forensics; online security; trading and portfolio management. 
The largest overall lease, recently completed by Cushman &amp; Wakefield, is the +17,000 sq m Sydney Startup Hub at Wynyard Green which is expected to open its doors in Q4 2017. While not specifically a tech tenant, the Startup Hub is a NSW Government initiative to create a startup and innovation centre and most of the residents are likely to be tech orientated. 
Service sector and tech driving Sydney CBD office demand 
Office demand in the Sydney CBD has traditionally been driven by the ups and downs of financial markets. With around 30% of the CBD workforce employed in the Finance and Insurance sector, changes in CBD office demand have historically been correlated with share market performance. However, in recent years the relationship has broken down with relatively strong demand for office space despite soft share market performance. 
But while the finance sector accounts for a large part of the CBD workforce, an even larger percentage, about 40%, are employed in other service sectors such as Professional, Scientific and Technical Services, Admin and Support, Real Estate and Information Media and Telecommunications. These sectors are currently doing well, as indicated by the NAB Business Conditions Survey (Figure 2), which is near a 10 year high and is helping to drive relatively strong employment growth (Figure 3). 
<a href="https://www.propertyobserver.com.au/images/2017/07/31/Tech2.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/07/31/Tech2.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/07/31/Tech3.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/07/31/Tech3.png" alt="">
Why do tech tenants now favour the CBD? 
For many years, Sydney’s tech hub was Macquarie Park. This was driven by a range of factors such as a desire to create a Silicon Valley/Stamford University type research and innovation relationship with Macquarie University, campus style office accommodation and access to warehousing space for inventory. 
However, software applications are now usually supplied over the web rather than on disks and with people the major asset of tech firms, management are keen to establish a work environment to attract and retain the best talent. 
The Cushman &amp; Wakefield 2017 office leasing: Trends and Outlook survey noted that proximity to public transport and retail amenities were primary considerations for tenants. With many tech firms operating globally on a 24/7 basis, the CBD offers the best access to Sydney’s transport network and excellent retail amenities. 
<a href="https://www.propertyobserver.com.au/images/2017/07/31/Tech4.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/07/31/Tech4.png" alt="">
Future growth 
With technology being increasingly integrated into all aspects of our lives, employment growth and demand for office space associated with the tech sector is likely to continue to grow. 
Deloitte Access Economics has forecast that Sydney CBD employment growth in the two sectors primarily associated with technology, i.e. Professional, Scientific and Technical Services and Information Technology and Telecommunications, is forecast to average 2.5% pa over the next five years, compared to 0.8% pa for the Finance and Insurance sector (Figure 5).
<a href="https://www.propertyobserver.com.au/images/2017/07/31/Tech5.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/07/31/Tech5.png" alt="">
This equates approximately to an additional 12,000 ‘Tech Service’ jobs compared to about 3,750 finance roles or, at 8 sq m per person, a requirement for about 96,000 sq m of Tech Service space compared to 30,000 sq m finance space. However, it should be noted Finance and Insurance sector roles are increasingly tech related as the industry becomes more automated. 
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prateek24-ezbwHMbNAk

Tech companies to drive Sydney CBD office tenancy: Cushman & Wakefield

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SPONSORED POST
Savills has recently unveiled the findings of its 2017 Tech Cities research programme, which aims to understand the diverse factors that make places good locations for the tech sector. 
The Tech Cities programme currently measures 22 global centres against more than 100 individual metrics, but for the first time in 2017 Tech Cities has also considered how each city performs on buzz and wellness.
Cities attract young tech talent who increasingly want to live in dynamic, healthy neighbourhoods within walking or cycling distance of the office. The Tech Cities ‘buzz and wellness index’ specifically looks to capture these qualities and identify the liveable cities that deliver what this demographic desires by measuring ‘buzz’ (i.e. nightlife, entertainment and cultural offer), ‘wellness’ (i.e. pollution levels, quality of parks, healthcare, commuting times) and the cost of living (excluding property costs) in each location. 
These new metrics have seen some changes to the cities included in the programme, with Melbourne appearing for the first time as the top tech city in Australia. When looking specifically at buzz and wellness, Melbourne ranks 16th on city buzz, 13th on cost of living and 3rd for wellness.
The trade-off between buzz and wellness
Cities with high buzz scores tend to have great bars, clubs, restaurants, shops, music venues and museums, and radiate excitement and creativity. 
But buzzy cities can have downsides: being popular on a world stage tends to lead to high property and living costs, and can lead to overcrowding and congestion. This could lead to younger generations of talent increasingly looking for something different as more young workers aim to strike a better balance between living in fun, energetic cities and maintaining their physical and mental health. Buzz alone may not be enough to attract these potential workers to a city, many of whom are either already employed or are looking to start careers in tech and its related industries.
That’s why it’s also important to look at wellness in a city - low crime and pollution rates, quality parks and public spaces, and low congestion. Copenhagen, Stockholm and Melbourne are at the top of this list.
While there’s often a trade-off between ‘buzz’ and ‘wellness’, Amsterdam and Toronto balance the two. Occupiers looking to attract the new generation of talent therefore need to pay close attention to such factors when looking for new locations
Looking at the future, we suspect it is these cities which can balance both factors (representing shorter commutes, easier access to amenities and a better work/life balance), that will move up the rankings in future iterations of Tech Cities.
City Buzz and Wellness index
<a href="https://www.propertyobserver.com.au/images/2017/05/08/Buzz-and-wellness-Index-2017.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/08/Buzz-and-wellness-Index-2017.jpg" alt=""> 
City Buzz + Wellness + Cost of Living index*
<a href="https://www.propertyobserver.com.au/images/2017/05/08/City-buzz-wellness-index-separate-2017.jpg" target="_blank">Click to enlarge</a>
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/08/City-buzz-wellness-index-separate-2017.jpg" alt="">
*Each of the three components is weighted then averaged together to get the final index score.
Source: Savills World Research, Tech Cities 2017. 
More Information
<a href="https://www.savills.co.uk/tech-cities" target="_blank">Savills Tech Cities</a> 2017 programme aims to understand the diverse factors that make places a good location choice for the tech sector; examining 22 global centres which have thriving and growing tech industries, home grown start-ups and incubators, and are at the top of global shopping lists for tech companies looking for space in which to locate. 
Savills is a leading global real estate service provider offering the full spectrum of services from strategic advice to managing assets and projects and transacting deals. To learn more about Savills, visit <a href="https://www.savills.com.au" target="_blank">savills.com.au</a>.
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