Who Needs Cities When We All Work From Home?
Who
Needs Cities When We All Work From Home?
Urban areas will survive a surge in working from home but may have to
reinvent themselves
Technology
has given a boost to knowledge-industry hubs such as New York, but new
work-from-home trends could erode that. PHOTO: MIKE SEGAR/REUTERS
By Justin
Lahart Updated June 6, 2020 10:10 am ET
For decades people have predicted technology would level
America’s geographic playing field, allowing areas outside of
knowledge-industry hubs such as the San Francisco Bay and New York metropolitan
areas to attract more high earners. It hasn’t happened, but Covid-19 could
change that.
Cities have historically
been the drivers of commerce and innovation. When people and firms gathered
near one another, they were able to quickly meet each other’s needs while
sharing ideas. Technology seems like it should have eroded those benefits.
Instead, some cities, such as Detroit, fell into steep decline while others,
such as New York, after setbacks, emerged as vital as ever.
What happened, says
Harvard University economist Edward Glaeser, is that although information
technology made it easier for manufacturers to move away from cities, it
increased the benefits of proximity when it came to developing innovations in
knowledge-intensive industries. So even though they were initially hurt by
manufacturers’ exit, places that had many educated people eventually thrived.
But communications
technology has kept advancing and workers have become more adept at using it,
especially amid the Covid-19 crisis and the work-from-home experiment it has
created. Having learned that they can work effectively without having everybody
in the office, companies won’t unlearn it.
Christy Johnson founded Artemis Connection, a 35-person
consulting firm, five years ago, and from the start everybody has worked
remotely. Among the upsides to using remote workers, beyond not having to pay
for expensive office space, she says, is the ability to tap into talent
everywhere.
Many of her firms’ clients are interested in continuing to use
remote-work arrangements once the crisis has passed, but she acknowledges that
it isn’t applicable in all settings. “There are some areas where face to face
has to happen—think about innovation that has to happen in a lab,” she says.
Companies also need to
take into consideration the employee loyalty that comes when people work
together. Younger workers’ desire to live and work where they can meet and
mingle will remain a draw, too. Harvard’s Mr. Glaeser says that more companies
may move to set up satellite offices to keep those benefits while casting a
larger net for talent.
“I think we’ll see more clusters of creativity in remote offices
centered around consumer cities—places where people want to live, like Boulder
or Vail,” he says. Having workers telecommute from home a couple of days a
week—a measure many employers will likely adopt to lengthen social distancing
until a vaccine becomes available—could be another lasting change.
Many companies will just
go back to their old way of doing things, but even partial adoption could have
big repercussions. People who only go to office a few days a week, for example,
will be more willing to live far from the city, affecting property values. It
also would lower the demand for commercial office space and hurt sales at
downtown restaurants and retailers.
Cities might have to
reinvent themselves all over again.
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