Every 0.2 millimeter decrease in thickness on the latest Macbook Air is greeted with breathless praise from tech pundits, but there is a parallel trend that is just as interesting and carries equally large implications for the future of work: the incredible shrinking office.

The average number of square feet per office worker is plummeting, from the traditional 200-300, to 225 in 2010, to 176 today, according to USA Today. This number is projected by CoreNet Global to fall to 100 or less within 5 years, with 24% of companies in a recent survey having reached this level already.

What is causing this shift? It turns out that it is a combination of factors that are transforming not only the physical space where we work, but the nature of work itself:

1. New technology

Our offices are shrinking because our technology is shrinking. The enormous copiers and filing cabinets of past eras are being replaced with compact multi-function printers and databases. Even the servers that once were needed to store these databases are increasingly found in the cloud.

Family photos and other mementos that once made a dedicated office or cubicle a treasured part of our offices have been replaced with unlimited digital wallspace on Facebook, Pinterest, Flickr, and Twitter. Every time we open our computer we are instantly in our own private workspace. The result is higher utilization of interchangeable offices that are more flexible to shifting work patterns.

Mobile technology has also demolished the limitations of where and how work can be done. The increasing capabilities of smartphones and other mobile devices, the ubiquity and speed of wireless networks, and cloud storage and other online services have set us free from the physical office. Many workers take advantage of this flexibility to work from home or off-site, freeing up office space.

2. New work styles

In 10 years, the average 30 year-old knowledge worker will have worked on 200-300 different projects, according to renowned futurist Thomas Frey. Frey describes a future of “business colonies,” ad-hoc collaborative teams of independent experts that are assembled based on the needs of a given project, working cross-functionally across huge distances using networked tools not tied to any particular time or place.

But much of this “futuristic” scenario is here today. Already we see a number of trends leading toward more project-based teamwork within organizations. With the high cost of hiring and payroll accounting, companies can’t afford a vast bureaucracy of workers with fixed job titles and rigid hierarchies. Teams have to be instantly reconfigurable and know how to work across functions and departments. But with such fluid relationships between diverse coworkers, face-to-face teamwork and collaboration are key, further contributing to the importance of shared space and open floor plans.

And this is not only for cost reasons: a recent sociometric study by the MIT Human Dynamics Laboratory found that the energy and engagement of communication between members of a team were a better predictor of objective performance than all other factors - including individual intelligence, personality, skill, and the substance of discussion - combined. Good face-to-face communication seems to be one of the key elements of success for all types of teams, and especially creative ones.

But such work demands a new type of work setting. Cross-functional creativity, dynamic communication, and face-to-face teamwork will not thrive in cubicles and corner offices. Open floor plans and shared desks not only facilitate this project-based work, but reduce the total floor space required by utilizing space more efficiently.

3. New workforce

By 2017, the 80 million-strong Millennials (those born between the years 1982 and 1999) will make up 75% of the U.S workforce, with $2.8 trillion in spending power, the most by far of any generation ever. Any discussion of the office of the future needs to take into account this generation’s unique attitudes and values.

Millennials don’t like to drive. For environmental, political, and financial reasons, the freedom once associated with owning a car is now associated with not owning a car. These young workers prefer living in cities, drawn by the culture, convenience, walkability, and local flavor denied them in the sprawling suburbs that defined their childhood in the 1980s and 1990s.

A recent survey by Zipcar shows a pronounced decline in driving, with 55% of 18-34 year-olds having made a conscious effort to drive less in the last year. And this aversion to driving is not found only among young people - overall U.S. per capita driving peaked in 2004 and total mileage in 2007, and has since fallen to post-World War II lows even as total population continues to increase.

The reduced need for parking and the greater need for public transportation, combined with the preference of younger workers for urban life, have led companies to start moving back to cities, reversing a decades-long trend. The most recent examples include Twitter, Pinterest, and Salesforce.com moving to San Francisco from Silicon Valley, and the consulting firm Accenture moving from its suburban Reston, VA campus to an urban setting in Arlington.

These urban settings are full of coffee shops, libraries, and co-working spaces that provide alternative working space for these workers, while also allowing offices to shed facilities like gyms, day-care centers, and cafeterias. Low commercial rents in city centers from decades of flight to the suburbs allow companies to provide the urban working environment that talented young workers demand while reducing their overall footprint.

So what does the office of the future look like?

The beginnings of an entirely new way of working are slowly emerging in cities around the world. As Thomas Frey puts it, ““As a futurist, I find it impossible to ignore the untapped potential currently amassing in coffee shops, co-working spaces, and live-work lofts around the world.”

It turns out that the key to envisioning the office of the future lies in these innovative new environments.

Join me in two weeks when I will continue to explore the implications and potential of the evolving nature of work.