Work From Home and Combine this with AI Technology
Work from home may be the greatest cost shifting exercise own goal in history for employees. You get to take on responsibility for paying your bosses rent.
A lot of what we hear about is the impact on office blocks in central business districts. Around the world, they have not returned to the pre-pandemic level of occupation.
Plunging Value of Office Towers
They normally value office towers in the city at a capitalised value of the rent. Lower occupancy rates mean lower rental returns means lower valuations. According to the news, there have already been shenanigans in managed funds holding these unlisted assets.
Some unit holders have exited the funds prior to a revaluation, which would have reduced the unit price. This has meant that unit holders who have not exited have passed value to those who have. When the institutions revalue the assets, the unit holders are likely to be quite upset at the downgrade in the size of their asset.
That is likely to be a minor point compared to the enduring impact that working from home will have.
Step Away from the Industrial Revolution
It may be the biggest step back into the cottage and away from the factory floor since the industrial revolution.
The first industrial revolution has long passed, but the habits and way of life formed in the early revolution have stuck.
Even though we have moved to a service-based economy, we have persisted with the habit of meeting up for work at a common location, along with our colleagues. That was critical when the capital required to undertake that work was mostly physical and required us to attend to it. It makes much less sense when we carry the important capital in our heads.
There have already been studies that have attempted to measure the change in productivity because of working from home. They have yielded a mixed bag of results. Initial examinations show that productivity improved measurably. Later studies showing a reduction in productivity.
The New Productivity
These studies miss the point. It is too early to tell how the work from home phenomenon will unfold. But mostly, because productivity is a measure, we ultimately used to see how much closer to satisfaction, fulfilment, and happiness we are.
Well, guess what? If spending more time at home brings you some of that, and for many it does, then we’ve just pushed into a new paradigm in relation to productivity.
If this is the case in Australia, we can see that the policies we have pursued in the past to increase wellbeing have left us stranded. The thing we have an acute shortage of are homes.
Who would have thought? The most important pieces of capital in the information and services age is a quick internet and a nice place to live. Where we can also choose to work.
Our productivity has been in decline in the last decade. It doesn’t look like picking up soon.
But productivity is a relative concept. We could be close to producing what we really want even if we end up producing less.
A New Age
This is radical. And it doesn’t even consider the intellectual attention that is being turned towards making home a more productive place to work. Think of all the new cameras and other sophisticated equipment that is fast coming down in price that will allow us to work from home more effectively.
Consider the preparation for the beginning of the year 2000, what was then called Y2K. Those of us who remember will recall the endless preparation. We wanted to make sure that lifts didn’t suddenly drop beneath us and planes didn’t fall out of the sky when the clocks changed over to the new millennium.
Yet, we are expecting to see if something as radical as work from home will work when we had very little preparation for it. Further, we have only had this revolution thrust upon us in the last couple of years.
I think the work from home bug has flown and is not coming back. Even the large tech companies trying to bring remote workers back to the office have conceded defeat. They require that workers only spend some days in the office.
Without realising, we have gone past the dream of a four-day week and settled on a two-day week if we get our work done at home.
Think of the productivity if, instead of being confined to talent in a geographic location close by, we can now tap into talent in other countries. Virtual assistants in nearby countries are just the beginning.
This is a two-edged sword since domestic workers may have to compete more and more with workers from other countries who demand far less pay for the same work. If that doesn’t increase productivity, I don’t know what will.
Work From Home and AI – A powerful Combination
In the medium to long run, it will be a tossup what will prove to be the most revolutionary. Work from home or AI. The potential effect on our way of life will be profound from either of these two developments. In combination, it is likely that AI and work from home will usher in revolutions in work and a way of life that few of us can imagine.
That is the way of “creative destruction“. If we run out of alternatives to improve our economic system, destroy it, and start again.
It is far too early to measure the impact of work from home because it has not even reached infancy stage. It is still embryonic.
Those who worry about the loss of benefits from being in contact with colleagues at the office should not lament for too long. While we don’t know how we overcome that problem. History has shown us we will.
There has been a lot of doom spoken of in relation to AI. True, it may end up end up destroying the world. But for jobs and employment, the combination of AI with work from home will create much more work than it destroys.
We just better be ready for it.
On second thoughts, we don’t have to be ready for it. It will just come, and we will simply adapt. We are good at that.
Rather than wiping out jobs that are repetitive, it will reinforce the importance of those who do hands on work. AI works best with information. For fixing a tap, caring for older adults, or building somewhere to live, AI may not be so good. You still need people who will do it.
If we have learned something since the pandemic, it must be that people with trades, carers and people who work in the front line are critical. We have given it a bad rap and suggested to our youth that they should get a degree. For those who are interested, I have written a small piece about “The Care Economy” which wis a quick read.
For the last 30 or 40 years, those who eschewed getting a degree and got a trade instead have done not to bad.
