Interpreting the characteristics of tech firms’ office demands
What are the characteristics of tech firms’ office demands in China?
According to the "Hurun Global Unicorn List 2019" released in October this year, among the 494 technology unicorns that have not been publicly listed as of June 30, China has surpassed the United States for the first time. China now tops the world with a total number of 206 unicorns. China's technology companies have evolved from being market followers to industry leaders now. Moreover, innovation and technology are considered to be the focus of China's future development.
At the national level, great support from strategic policies has continuously created a better environment for the vigorous development of tech firms. Besides traditional tech hubs, such as Beijing, Shanghai, and Shenzhen, cities like Nanjing and Wuhan have begun to stand out. The restrictions on the clusters of technology companies have gradually weakened the “two-eighth effect” — 80% of unicorns locate in 20% of all cities.
There are both opportunities and challenges for technology companies. Opportunities lie in the support of policies and the optimization of the market environment, while the challenges are numerous. In addition to seeking technological breakthroughs from the perspective of technology companies, how to maintain its core competitiveness in the operation process? How to optimize office space to keep up with changing businesses and employee demands?
In the face of these questions, we conducted a survey on office space demands with more than 110 technology firms across the country. From chip development, 5G and other deep technologies to Internet platforms and game development companies, from startups to unicorns, we had “dialogues” with a large number of technology companies to explore their technical demands at different stages of their development. The exercise provides us a feasibility reference for tech companies’ operational and office space strategies.
Dialogue 1: What were the preferences of technology companies in the early days for the current office space products?
The survey found that startups need to be able to respond urgently to changes in their strategy and market conditions, as it directly affects their demands in terms of flexibility of their office space and lease.
Dialogue 2: How do technology companies in the fast-scaling period balance the market and cost considerations when selecting sites across the country?
In the past two years, we have found that in some second-tier cities, office demand from technology companies has exploded. In the process of accelerating development, it is necessary to ensure an efficient communication mechanism with customers when exporting externally and to continue delivering fresh blood through talent attraction and employee training.
Dialogue 3: What are the characteristics of the office space demands of mature technology companies?
When technology companies are at a mature stage, are there any other ways to get office space besides pure leasing? Our survey found that the proportion of demand for office integration and self-use purchases has increased significantly in companies with more than 5,000 employees.
Dialogue 4: Compared with traditional enterprises, what kind of support does the technology company need when selecting a site?
In communication with technology companies, we found that due to their unique growth model, data tools will increase the efficiency and guidance of their site selection decisions.
As the current market focus, the formulation and adjustment of technology companies’ office space strategy is closely related to their own development. Moreover, for other participants in the real estate market, the preference of technology companies’ office demand is also relevant to their investment and development strategies.