Wednesday, August 19, 2020

The Pendulum Is Swinging Away from the Big City

For a really long time, we've had lots of incentives to put lots of people together into very large, cramped, cities. There were a lot of advantages to having so many people together and it has made some large cities very powerful in the global marketplace.

I believe we are in the middle of a transformation where businesses and people are realizing that the big city doesn't have the advantages like it used to. 

Covid-19 has for a lot of reasons changed our lives. Whether you believe it is a valid threat or not, it is unquestionable that the response governments from around the world has forced EVERYONE to reevaluate their life and how they interact with others. What are acceptable risks for a pandemic that no one can really agree on what it exactly is. How do we protect our loved ones, friends, coworkers while still trying to earn an income and not go completely crazy from having so many restrictions on what we can and can't do with our lives. 

I could go on and on... My point with all this is that never have we experienced such a dramatic instantaneous forced shift in our daily habits... on a global basis. Never have we put such a demand on technology to help us adapt in such a short amount of time. Overnight, remote workers at businesses doubled their load for communications systems that now had to replace face to face meetings. Schools went from in classroom learning to streaming several Mb of video to try to recreate their classroom experiences. Cloud communications systems struggled to ramp up capacity for the onslaught of all the new users trying to find ways to keep performing their duties.

Through all this we have learned as a human race that we don't have to be in close proximity to each other to perform all the jobs out there. Yes, there are jobs that still require workers to be in a particular location, but there are an enormous amount of information workers that don't. The whole notion of going to an office so you can collaborate with others has completely been blown up to pieces. Large swaths of corporations are learning they don't need to invest in real estate for people to work. Instead they are heavily investing in technology to help their workers communicate and collaborate instead. 

I've been living in this reality since 1999. At first it was just a couple of phone lines with a modem connected to one, but at least for the last decade the technology has existed for people to communicate and collaborate from anywhere. Way back in 1999 my boss had the foresight to realize that I just needed to be close to an airport (I traveled to install physical phone systems at the time for Nortel). Ever since 1999, all the jobs I've had, never had a location tied to them. In fact, I've traveled across multiple states and the customers I was working for didn't even notice I was working from a different location. 

What I'm seeing now is that big cities that used to thrive on having a large number of people in a small compact area are now struggling. Here are some examples in the news:


USA Today:



Not only were big cities really bad for spreading Covid-19, but as soon as people realized they don't have to live in the big city to earn their income and instead can literally live anywhere that has a good internet connection, they are leaving in droves. Housing and rent prices that used to be sky high are taking a nose dive. People are re-locating their lives to places that are less stressful and more affordable. 

It will take a while, but I expect some smaller communities that have been dying for a long time, might get a serious economic boost from people looking for a simpler life and don't have to rely on a local employer. 

I also expect to see that businesses will catch on that they can now seek out employees from anywhere. While I'm not sure we are going to be hoping borders between countries to find talent because tax wise that gets complicated, I do expect that we will see businesses looking for employees outside of the actual hiring location with no intention of relocating those workers. 

Put simply, I believe we are witnessing a new economic revolution like none other than before. Jobs will go to the best qualified, instead of to someone that kind of fits the role but was closer in proximity to a particular location. It's going to completely turn the whole notion of compensation on it's head, because now you are paying for skills without having to adjust for location. It's gonna take some time to sort through all this... maybe a decade or longer... but it's going to happen. I suggest you pay attention and figure out how you are going to thrive in this new world.