What General Electric’s Move Tells us about the Future of Work in the City  
01.19.2016
Editorial Team

Cities like Boston are luring companies with the promise of better amenities and easier access to talent. Image © allenran 917

General Electric (GE), one of the most iconic American companies of the past century and a longtime “bellwether of the American economy,” recently announced plans to move its corporate headquarters from suburban Fairfield, Conn., to the heart of downtown Boston. This announcement falls on the heels of CEO Jeffrey R. Immelt predicting that the longtime manufacturing powerhouse will become a “top 10 software company” by the year 2020.

GE’s decision to forgo an expansive corporate campus for the grit and energy of an urban environment may come as a surprise to some business analysts and industry experts. But GE’s decision is perfectly in sync with a trend that’s been quietly materializing for some time. Established companies located in suburban campuses are rethinking their corporate real estate strategies. They’ve been clued in to the tangible and intangible benefits urban environments offer and have begun to migrate into the same urban cores American industry forsook in the latter half of the 20th century. GE’s relocation marks the most drastic step yet taken in this slow progression towards more urban workplaces, but don’t be surprised if the manufacturing titan once again serves as a bellwether worth watching.

To better understand why a company like GE would choose an urban environment for its corporate headquarters, we sat down with Arlyn Vogelmann, a Principal in Gensler’s Boston office, and Andrew Starr, a member of Gensler’s consulting practice, to discuss the allure of the urban center, and how Boston is repositioning itself as a tech and manufacturing hub for the 21st century.

Q: The New York Times noted that GE’s relocation decision “illustrates how much old-line companies in nearly every industry have been forced to rethink their businesses for a digital age.” So how do urban environments help companies adapt to the digital age in which we’re living?

Arlyn Vogelmann (AV)

The big advantage cities offer is easy access to talent. Talent is the name of the game and big and small companies are engaged in a constant war for talent. They’re trying to recruit and retain the kind of people who can help them leverage innovation economies and gain a competitive advantage in the fast-paced digital environment that’s driving business. And countless studies have shown that digitally savvy workers want to work and live in cities.

Workers want easy access to mass transit so they don’t have to spend hours each day navigating traffic jams. They want to be close to the cultural amenities that only cities can offer. And they want to feel like they’re part of authentic urban fabrics where change and creativity are integral facets of everyday life. Moving to a city like Boston puts GE in close proximity to the research universities that are here and to a burgeoning tech-start up scene that’s already produced tons of interesting innovations and successful companies. So this move will not only allow GE to attract the kind of workers it needs to transition into new fields like software development, it will help reinvigorate and redefine the company’s brand for the future.

Andrew Starr (AS)

GE has already reinvented itself from a strictly industrial company to an industrial company with a strong a technological bent. If they want to continue this evolution, they’ll need, as Arlyn mentioned, more talent. Talent is the number one product in today’s market, and cities continue to attract the most talented workers.

This move also gives GE access to related industries that are already located in Boston. Robotics centers have been popping up here because of MIT. Ecommerce also has a strong presence. GE isn’t the first major company to take advantage of these resources. Staples opened its Velocity Lab in Kendall Square to fuel innovations for the ecommerce portion of its business. Johnson & Johnson also opened an innovation center in Boston. It’s a trend that will continue because cities can put handfuls of various creative entities within a few blocks of each other. In doing so, so they create this perfect stew of talent and resources that more often than not fosters creative thinking.

Q: When companies choose to make this kind of move, what are they looking for in a new “urban” workplace? Have other firms made this type of move? What were the outcomes? What sort of innovations are we seeing in the workplace more broadly that cater specifically to the digital age?

AV

They’re looking for authenticity, first and foremost. Workers today want to be part of a real urban community that offers authentic urban living and the kind of experiences that can’t be found outside of cities. Grit and diversity are pluses. We’re past urban decay and the negative stereotypes that plagued cities in the 70s and 80s, and are now in the midst of an era where cities are seen as cultural and intellectual hubs without equal.

AS

Cities are mixed-use environments by default, and workers are drawn to this because they offer mixed-use that feels more authentic than that offered by a lot of exurban and suburban environments.

Q: The New York Times story about this move notes that the new GE headquarters will be “leaner, faster and more open…the intent is that it will be more like walking into a start-up in an urban setting than the remote suburban HQ of the past.” Why is moving from suburban campuses to urban locations so attractive to some firms? Are firms moving completely to an urban setting or simply moving a part of their workforce?

AV

Firms that move to urban locations are looking for agile workplaces that can accommodate fast-paced and collaborative work styles. Plug and play is becoming a big driver of workplace design. We’re seeing more offices with unassigned desks, a plethora of collaboration spaces, broader team footprints, and layouts that can be easily reconfigured at the drop of a hat. Technology is the motivating factor behind these design choices. In fast-paced work environments, project teams come together in one space to work on an initiative war room style, and then re-form with other members in a different location to tackle new projects.

This is how work is being done in all sectors of the economy. Collaborative real-time work has replaced the old “let’s have a meeting and then go back to our individual desks” style of work. We’ve entered an era of ultra-fast, uber-collaborative work and spaces must be agile enough to support this.

Q: Why is Boston an attractive location for companies?

AV

Boston often gets stereotyped as a quaint, provincial town that just happens to exist on a large scale. This may have been true in the past, but Boston has become much more international and cosmopolitan over the past few years, and these changes are forcing companies to rethink their perception of the city. The past few years have seen an influx of foreign investment in commercial and high-end residential real estate, and some global retailers have even begun to bypass New York for Boston. So the city’s becoming much more of a global hub and this is a plus for workers and the companies that are here.

AS

Boston is also home to a whole ecosystem of universities, venture capitalists, and startups. There’s a nexus of next-level talent that calls Boston home and this makes the city very attractive to any company looking to foster innovation and grow its talent base. The number of top-notch universities within the city alone is a competitive advantage few other cities can match, and this is why the last three to five years has brought a significant number of tech companies from suburban Boston into both Cambridge and the neighborhoods that are now referred to as the Financial and Innovation districts.

Arlyn Vogelman
Arlyn co-leads Gensler’s Corporate Campus Practice. Her expertise is advising major corporations on the evolving role of the work environment within the campus and its ability to enhance business performance and support organizational culture. Contact her at arlyn_vogelmann@gensler.com.
Andrew Starr
Andrew is a real estate and management consulting professional, specializing in the retail sector. He holds a MBA in Real Estate and a MS in Finance from Boston College. He completed a thesis considering alternative financing mechanisms for large transportation infrastructure projects, with a particular focus on the MBTA’s Green Line Extension in greater Boston. Contact him at andrew_starr@gensler.com.
Article originally appeared on architecture and design (http://www.gensleron.com/).
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