a) Describe the office location, typical of a city in the developed world. (10 marks)

b) Account for the pattern described in part (a). (15 marks)

There are several types of offices that are commonly found within a city in the developed world. Generally speaking, it would be fair to assume that there are six main types of office use within the city: Consumer offices such as solicitors or accountants; Producer Business Offices including firms headquarters and advertising agencies; Public Administration Offices/Government Departments; Professional Services like insurers; Finance Offices such as brokers and banks and finally, Firms Administration Offices which may have several departments such as research and development, design, et cetera. Many offices will fall into more than one of these categories and it is perhaps easiest to consider offices in only two categories. "A distinction can be made between the producer services, that is finance, insurance, property and other private sector activities, and non-profit services and government" (Daniel and Hopkinson P257).

a) Describe the office location, typical of a city in the developed world.

When studying the pattern of office location in the developed world it is usual that offices are found in the Central Business District. This becomes obvious when looking at town and cities in the United States where there is an obvious ‘cliff line’ when the high rise buildings cease suddenly. While the transition from high rise to only two to three storey buildings is less obvious in the United Kingdom and Western Europe it could not be denied that high rise buildings are found in the centre of cities. This is a fairly broad assumption that all sky scrapers are used as offices and, of course, it is probable that they are not only used as offices. Indeed, within the CBD it is likely that the ground and first floors will be used for retailing leaving the higher storeys for office work and the top floors for Penthouse accommodation.

Many offices in Western Europe are found in the city centre as a result of resistance to decentralisation of producer services. For instance over 90 per cent of the headquarters of major (French) national firms are found in Paris and London also dominates the private sector. The reason for such large numbers of offices within the CBD can be put down to the fact that when offices were first established they occupied existing buildings within the CBD. In Sheffield, for example the agglomeration of solicitors in Paradise Square may be put down to the fact that the Victorian Terraces provide an excellent location due to their large rooms and proximity to the city centre. Similarly in Central London legal services are found agglomerated on the Strand around the Old Bailey and the courts.

The pattern of agglomeration of offices within the CBD is continued when looking at administration services found around Westminster in London, and Fargate in Sheffield and financial services in or around Threadneedle Street and the Bank of England. Such agglomeration within the centre of the city is in keeping with all of the urban models who cite retail and office work to be inside the CBD as well as the bid-rent model suggesting that commercial land uses will be found with in the CBD. However, recent trends suggest that instead of increasing centralisation and concentration of offices within the CBD, more firms are locating outside the CBD and in fact the whole city itself.

This relocation of offices outside the CBD is interesting and raises many questions, primarily ‘What is relocation?’ A study of moves made by large organisations showed that very few moves involved the relocation of the whole office merely parts of it, thus meaning it is necessary to adopt a very loose definition of relocation. Pearl Assurance, for example, which relocated from London to Perborough kept High Holborn for its investment and actuarial departments in London.

Much attention has been paid to the relocation of offices in the south-east of Britain in particular as a result of the ‘ripple effect’ from the overheating of the economy in the late 1980’s that took away these boom conditions from the region. It is commonly thought far more relocation has taken place than is actually the case. In point of fact, when companies consider a move, they rarely actually do move - "Organisations tend only to start to thinking about relocation when they realise that their premises are deteriorating" (Financial Times, 3 February 1989). This said many offices are moving away from Central London and into the surrounding area, some times though as far afield as East Kilbride or Glasgow. The British Government tried in 1963 to promote the movement of office work away from central London by means of the Location of Offices Bureau. This bureau pinpointed certain area for development, commonly western England and Wales as well as Northern England.

However, the bureau and the aid policies of the 1960’s developed in the 1980’s to help more localised areas and resulted in the promotion of enterprise zones and as a result several out of town/edge of town business parks were established. In such parks, like-activities would group together such as ‘support services’ who handle data and support the remainder of the company. Banks, and Insurers have been least welcoming to the move to business parks leaving ‘back office’ work to be done in such parks. However, Banks, Solicitors, and Insurers are the three types of office users who have moved the most from Central London.

Not only have offices relocated in business parks, but they have utilised the South East by occupying new office buildings in Uxbridge, Hemel Hempstead, Milton Keynes, Chelsea, the London Docklands Enterprise Zone and 45 other towns around Britain (correct to 1992). There has also been an increase in offices in and around international airports such as Heathrow or Gatwick. There has also been speculation that firms will now choose to locate in the Pas de Calais in Northern France due to the opening of the Channel Tunnel and that office space in London will increase again due to developments such as the Docklands redevelopment scheme (mostly completed) and the proposed Millennium Tower in the Square Mile.

The location of Government Run Departments has also followed similar trends, moving from London and the south-east in the 1960’s, moving back in the early 1980’s and again leaving in the late 1980’s - early 1990’s. The Department of social security moved to Belfast, Wigan, Leeds, and Glasgow; Department of Employment to Runcorn and Sheffield; Patent Office to Newport; Ministry of Defence to Newcastle to name just a few. Official estimates suggested that 34000 civil servants would be moved out of London ‘without disrupting government business’ - The Guardian (15 November 1989).

In summary, when looking at the location of offices in a city in the developed a large amount of agglomeration of like office uses takes place. Commonly Financial and Consumer offices locate in city centres and more Public and Firms Administration and Professional services locate outside large cities or in business parks.

b) Account for the pattern described in part (a).

There are several reasons why a firm may choose to locate its offices in the places cited in pat (a). It is important to understand these reasons and investigate the pattern of the locations of offices in the developed world.

A central location is often favourable due to the centre of major towns or cities being particularly prestigious meaning that a firm will appear favourable to its customers. This is particularly important for Consumer Offices, Professional Offices and Firms Headquarters. Similarly the CBD is generally thought to be, and commonly is the most accessible point in the town/city as a result of good public transport and many roads. As a result, assembling a highly-skilled-white-collar-suburban-based workforce is easy. Herbert & Thomas (1982) estimated that the cost of labour accounts for between 84% and 86% of an office's annual expenditure and there is little variation between the city and the suburbs. This means that from the stand point of cost, a city centre location is no less favourable than a suburban location.

The availability of staff may lead to the relocation of firms outside the CBD. This may seem odd as the CBD is generally considered the most accessible point in the town or city. However, town centres world-wide are renowned for heavy traffic flows and public transport failures like ‘leaves on the track’. Staff who have to cope with the rigours of travelling into the city every day become demoralised, less proficient, or may not accept jobs in the first place. High Rent levels within the CBD mean that office cannot afford to remain in a central location choosing out of town locations where the environment is better than the city. Similarly as the limit of the CBD becomes greater, residential areas get further from the centre, meaning workers have to travel further. As a result an organisation may choose to relocate outside the city or to another city with a more plentiful workforce. TSB and NPI both made such decisions in 1990 moving to Newport and Cardiff respectively.

The lack of space in the city centre may account for some decentralisation as companies increasingly want to expand and there is no space for such action in the CBD. Thus, an edge-of-city location appears favourable. Also lack of space within the CBD may account the degree of agglomeration between offices there. However, lack of space is unlikely to be the reason for agglomeration outside towns. Offices are primarily concerned with handling data, as a result, offices will group together due to the advantages of agglomeration. These are things like sharing resources between firms (i.e. legal documents for solicitors), ease of communication between client and company and so on. Agglomeration is now becoming less important to office workers due to the improvements made in information technology.

The ability to transmit documents by fax, or E-mail, has made it much easier for companies to communicate with one another without having to post documents or deliver them by hand. Similarly the ability to make a telephone call to more than one other person reduces the need to have one room in which to meet. It appears that offices will one day become redundant. This is heightened by the fact that modems make working at home far easier than once thought possible. An accountant may never need to visit his office, conducting all business on computer, telephone or by fax. This makes working far easier for staff, but it does have its drawbacks. For instance a company involved in the screening of women with breast cancer allowed its workers to work from home transmitting results by modem, the results were processed far quicker in this way although many of the results were wrong. The lack of an office environment means staff are not regulated and work is poorer. In this respect it is unlikely that offices will one day disappear altogether.

The need to agglomerate is becoming less important as improvements are made to transport facilities outside the city. While the CBD is theoretically the most accessible point in the city, New Towns are often found along the route of major roads providing excellent situation for offices (i.e. Kodak and BP in Hemel Hempstead and Coopers & Lybrand in Uxbridge). Equally, offices are often found around international airports for ease of communication/transportation to other countries. Not only this but airports (esp. Heathrow), are now found on Motorways, or major A-roads, making national transport much easier.

New Towns and Airports are often areas made more favourable to locate in as result of Government inducements, including enterprise zones. These zones, mostly found in Northern England often take the form of Business Parks. Business Parks are often attractive to offices as they offer low rent, new buildings and excellent location in terms of transport. Shell Chemicals, which moved to the Chester Business Park, and Pearl Assurance (to Peterborough Business Park) have both moved to Business Parks away from London making savings of over £1million on their annual running costs. The government has shown support for such schemes by relocating many of its departments out of London, including Department of Transport, Department of Employment, and several Quangos.

Finally, it was estimated that office space would increase by 35 million square feet in 1990-1992 and this figure is still rising. The speculation that offices will once again locate in London has not been proved but trends set by the Government of moving departments in and out of London seems likely to continue. Offices are often limited by Green Belts or farmland outside towns and should this become problematic it is highly likely that developments such as the Millennium Town in the City of London will encourage relocation inside the city.

In conclusion, it is recognised that professional services locate inside cities for reasons of agglomeration and the increasing decentralisation of offices is due to lack of space in the CBD, poor traffic conditions, and government inducements. The trend to relocate is heightened by the example set by the government, however, it is possible that the trend may swing back to relocate inside cities or perhaps on the continent as a result of the channel tunnel. It is unlikely that offices will one day disappear altogether as the can be no regulation of staff working from home.