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Where is the future of work? Everywhere!?

by on April 26, 2021

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Resurgent rural communities and decentralized cities

The pandemic has empowered professionals to pursue a balance between life and work, leading many to move out of major cities to find refuge in rural communities. What does this shift mean for the future of work and the role of super cities? How should government policies support rural economic development while also investing in cities as economic engines? Is the Internet transforming where we work? Fibre optic internet is one obvious essential requirement, but so are robust transportation networks, and self-driving vehicles. Can we work anywhere and everywhere?

New Paradigms and Fibre Optic Internet
To achieve the next generation of infrastructure, we need to be aware of a radically different set of needs. Our fibre infrastructure should mirror this change, focusing on long-distance and high-capacity infrastructure. The next generation of fibre networks must think beyond simple broadband to transform the way we think about networking and how we interact with each other.

This includes more “Internet exchanges” which route traffic locally and regionally, but it also includes ensuring that super high speed is available for all. That’s not just a technical issue, but a literacy issue, a social issue, and of course, an issue of geography.

Resurgent Rural Communities
Today, some rural communities struggle with the digital divide. But there is hope. Investing in fibre optic connectivity allows rural communities to became leaders in the move toward digital and green economies.

While that is partly a technical issue of ensuring access is there, it also reflects a priority for employers. Given that governments tend to be fairly large employers, their policies and priorities can go a long way to changing things.

Interesting therefore to see Ireland commit to this rural resurgence.

Ireland is seizing the “unparalleled opportunity” offered by changing pandemic-era work habits to shift people from major cities to the rest of the country, envisaging a network of remote working hubs and rejuvenated town centres in an effort to redress the country’s longstanding rural-urban divide.

The Irish government unveiled its “Our Rural Future” strategy on Monday, ahead of a promised announcement on easing a three-month lockdown. Some of the measures currently in force, notably a ban on non-essential travel further than 5km, have hit rural dwellers particularly hard.

The plan, the first of its kind launched by a European country since the start of the pandemic, includes creating a network of more than 400 remote working hubs, and introducing tax breaks for individuals and for companies which support homeworking.

The government has set a target of 20 per cent of Ireland’s 300,000 civil servants moving to remote working by the end of the year. Other measures include “financial support” to encourage people to live in rural towns and accelerated broadband rollout.

As an island, Ireland perhaps has more interest or ability to promote rural living compared to say Canada. And yet the arguments remain relatively applicable, as it recognizes and attempts to leverage the benefits of digital work.

Here’s a couple of quotes from the Irish Government rural development policy:

The Vision of this policy is for a thriving rural Ireland which is integral to our national economic, social, cultural and environmental wellbeing and development. An Ireland which is built on the interdependence of urban and rural areas. An Ireland which recognises the centrality of people, the importance of vibrant and lived-in rural places, and the potential to create quality jobs and sustain our shared environment.

An ambition of this policy is to improve digital connectivity for rural communities and enterprises through the delivery of high speed broadband to every part of the country. It aims to bridge the gap in urban-rural connectivity and to support rural businesses to trade online and broaden their customer base.

What’s relevant here is not just having people move (back) to rural communities, but also help rural communities serve customers via the Internet and thereby increase their revenue (and local taxes).

Here in North America we’re seeing something similar when it comes to a migration of affluent professionals from cities to exurbs and rural communities. The rural areas that are benefitting from this the most are the ones that have invested in or have benefitted from fibre optic infrastructure.

However while the rural housing market is growing, the overall affordability of housing is failing to keep up. Housing expenditures on non-farm households in rural areas are more than six times higher than those in urban areas and remain unacceptably high compared to other rural economic sectors. The affordable housing problem is more than a cost of living issue, but one of accessibility.

Rural communities are experiencing a modest resurgence, however is it masking a larger gap between haves and have nots?

Similarly communities are mobilizing in part to address the challenges of an aging population, and attracting relatively younger professionals from urban environments is an essential part of this strategy. However issues of affordability and accessibility will be a challenge moving forward.

Decentralized Cities
Is the office becoming a relic? Yes and no. Or rather, maybe, in that the office is definitely changing.

While being a prime productivity centre remains important, leaders recognize that businesses may need to completely re-imagine their office environments to meet the challenges of the future.

Once scenario involves companies who no longer own traditional office space, but instead lease office space to professionals who come to them for collaboration and co-creation. This “floating” or “hybrid” office space is projected to grow by 33% over the next decade as companies shift to decentralization, creating economies of scale by decentralizing office space.

Yet what if you scaled this across the kind of sprawling urban environments we see in North America? The map of emerging megaregions illustrates this:

map

Instead of regarding this megaregions as cities that are centralized, what if instead we recognize them as the decentralized cities they’ve become.

These decentralized cities are where the prevailing talent pool allows for a creative, diverse environment. Similarly these urban/suburban environments are modelling themselves according to the Internet of Things, automating the services that power them.

Here’s an article/interview that argues strongly in favour of cities, and against remote work, let’s look at it, and then reframe it within the context of a decentralized city.

To understand the economics behind why people cluster in these high-cost-of-living regions and how the pandemic could change that, I turned to Enrico Moretti.

Moretti is an economist and preeminent researcher in the fields of labor and urban economics at the University of California Berkeley. His 2013 book The New Geography of Jobs details the forces shaping where people live, where people work, and how those outcomes are inextricably linked.

In this interview, Moretti explains why high-productivity workers cluster in a handful of cities and why the strength of those forces means it’s unlikely that very many of us will be working fully remotely in the long run. We also discuss why such a small slice of the American labor force can determine so much about which cities dominate.

“I think everything that we know from the economic geography before Covid tells us that these forces of agglomeration are quite powerful. And there’s no reason to think that the same tendency to cluster will be all that different in a post-Covid world,” says Moretti.

While I think the general argument here is correct, I think the context in which these clusters form is not. Yes the forces of agglomeration are powerful, but they no longer have to be as concentrated as they were, given the benefits of decentralized technologies and infrastructure.

Agglomeration economies exist in all sectors, but they’re pretty pronounced in the newer industries, in the innovative industries. It’s the tendency of employers and workers to cluster geographically in a handful of locations. So it is the tendency, for example, of an industry like biotech to cluster geographically in three or four key cities. It’s the same whether you’re talking about social media or pharmaceutical or finance.

I have a new paper where I’m looking at high-tech clusters and I find a staggering amount of clustering when you look at a very narrow level of specialization. So, for example, if you look at all the inventors in computer science, the top 10 metro areas in the US account for 70 percent of all inventors in computer science.

Yet this depends upon a traditional notion of geography and community that does not take into account the geography of cyberspace and the growing power of online communities.

Moretti talks about how a small cluster of people in a specific industry can act as a force of gravity attracting talent but also an ecosystem of businesses to that location. Similarly geographic areas tend to specialize or focus on niches as a result of this success.

However there’s no reason why rural communities could not achieve something similar, and for all we know already are. Part of the issue is our narrative that innovation only happens in urban environments, which blinds us to what may and probably is happening on the periphery.

5 Policies for the Future of Work

The ‘future of work’ is about more than work environments. The global challenge is to ensure that workers have the right resources to improve their lives, but to enable them to continue to work productively. For many this will mean the opportunity to live in a community that exists on a smaller, arguably human scale.

Free fibre optic Internet to the home for everyone everywhere

Active investment in transportation infrastructure and self driving vehicles

Free online education for students of all ages

Flexible work policies that make it easier for people to choose where they work

Affordable housing in rural environments as well as urban

What do you think? Join the salon and let us know!

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