Changing work and changing demography = changing cities

The history of cities is a long one, but the urban form of a mono-centric city that houses the best knowledge workers and professional minds, serviced by unrivalled inner urban amenity and metro wide transport networks, is relatively young in historic terms. It may also be short lived.

The pre-industrial city existed for several hundred years until around the early 1700s, and was largely a trade and agriculture hub, powered by people and animals. The industrial city of the late 1700s to mid 1900s was powered by mechanisation, factories and manufacturing, with workers living close to the places of industry. Think the London of Charles Dickens. This lasted maybe 250 years. The post-industrial city, powered by growth in service industries, finance, information and research, lasted roughly from the 1960s until recently – a period of maybe just 50 or 60 years. This is what drove demand for office buildings the world over. This is our world now, but it is changing fast.

Two recent media stories drew attention to forces which are inevitably, irresistibly reshaping cities again. Post-Covid changes to workforce dynamics, the rapid deployment of Ai, and the unrelenting march of demography (the ageing population) place us at the start of a new era of change.

The first story was by Hari Hara Priya Kannan, Data Scientist at The Demographics Group, writing in The Australian. “The story shaping commercial property markets is not the headline increase. It is the age composition beneath it,” she wrote.

An expanding 70-plus cohort supports sustained demand for healthcare infrastructure – general practice clinics, specialist consulting suites, diagnostic facilities, rehabilitation centres and day surgeries… Suburban medical precincts, particularly in established middle-ring suburbs, are likely to benefit…

Growth in the 55-69 and 40-54 cohorts reinforces demand for professional services, financial planning, insurance, legal practices and wellness providers. As workforce participation among mature workers remains elevated, demand may shift toward flexible and decentralised office formats. At the same time, slower relative growth in the 25-39 bracket moderates expectations of rapid youth-driven expansion in inner-city hospitality and high-density retail precincts.

Office markets face a nuanced adjustment. As the share of older workers rises, demand may tilt toward accessible, flexible and decentralised formats. Commuting intensity may shift as retirement ages extend but full-time CBD attendance moderates.

Mixed-use precincts integrating residential, healthcare and essential retail may align more closely with demographic reality than single-use CBD developments.”

The second story dealt not with demography but technology, and specifically the impact of Ai. “Morgan Stanley axes thousands of jobs as AI up-ends white-collar work” was the headline, also in The Australian.

The “great cull” is eliminating thousands of white-collar roles at major Australian companies… While jobs are also being axed, businesses are demanding a radically new AI-fluent employee, warning those who fail to adapt will become obsolete…

The mass sackings have sparked a new industrial revolution, with some executives warning of more to come as bots and algorithms consume human roles.

Ai’s capacity to perform administrative tasks at ease and with speed, will surely take a toll on many thousands of jobs traditionally harboured in CBDs, but elsewhere also. Some estimates suggest over 40% of Australia’s administrative and support service roles could be replaced by Ai by 2030. And the Ai revolution is only beginning, with moves into medical, education, finance, even creative industries being impacted at light speed.