Why Did it Take a Pandemic to Change the Way We Work?

We have been talking about the future of the office for a long time on Treehugger, and have been wondering for years why we still had them. In 2017 I quoted an article written about Norman McRae of The Economist magazine and the predictions he made in 1975:

"Once workers could communicate with their colleagues through instant messages and video chat, he [McRae] reasoned, there would be little coherent purpose to trudge long distances to work side by side in centrally located office spaces. As companies recognized how much cheaper remote employees would be, the computer would, in effect, kill the office – and with that our whole way of living would change. 'Telecommunications,' Macrae wrote, 'will alter society's patterns more profoundly than the previous and smaller transport revolutions of the railway and automobile have done.'"

So why didn't it happen? Many have written that it was about corporate culture, about body language and non-verbal communication. David Solomon of Goldman Sachs rejects working from home and wants everyone back, and is quoted by the BBC: “I do think for a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal for us.”

I have previously made the case that it is a combination of inertia and not understanding how to use our new tools, comparing it to the Second Industrial Revolution which started with rail and telegraph around 1870 and ran through 40 years of change, coalescing around the office, the typewriter, the vertical filing cabinet, and the electric light bulb. For the first time, work was separated from home as huge numbers of men and now women went to work in buildings specifically designed around the concept of centralizing information storage and retrieval in files and on cards.

But something else was happening that had even greater significance and parallel to what is happening today: the spread of the small electric motor, I have wanted to write about it, but couldn't find any decent sources until now in an article by Noah Smith. He wonders, as I have, if the pandemic will be the start of a Zoom Boom, a change in the way we work. And while video conferencing has been around since the sixties, change comes much more slowly.

"Looking back at history, we see that general-purpose technologies often take a long time to start lifting productivity by measurable amounts. The reason is that when new technologies appear, you can’t always just swap them out for existing ones — you often have to entirely reorganize your systems of production around the new technology, and that’s a difficult and expensive process."

Before electricity, factories were set up to run on a big central source of power, first the water wheel and then the steam engine. the power was distributed with turning shafts and leather belts. Just switching out the steam engine for an electric engine didn't do very much for productivity.

However, the 1888 invention of the small electric motor by a 21-year-old Nicola Tesla changed everything; now you could put the power everywhere, except it took a very long time for this to happen. Economist Tim Harford describes what happened:

"Old factories were dark and dense, packed around the shafts. New factories could spread out, with wings and windows allowing natural light and air. In the old factories, the steam engine set the pace. In the new factories, workers could do so."

But the factory owners were slow to adapt and adopt:

"Of course, they didn't want to scrap their existing capital. But maybe, too, they simply struggled to think through the implications of a world where everything needed to adapt to the new technology.... Trained workers could use the autonomy that electricity gave them. And as more factory owners figured out how to make the most of electric motors, new ideas about manufacturing spread."

Small electric motors changed more than just the factory; they changed home design because they ran the fans that push the air from our furnaces, the compressors in the refrigerators, the motors in the vacuum cleaners. They even made the automobile usable by everyone with the electric starter. They are probably as important as the light bulb.

Compare this to the Third Industrial Revolution with the computer; first, it was big and centralized and expensive, then it was smaller and distributed, but as Noah Smith and I have both noted, it started with swapping out word processors for typewriters, disk drives for file cabinets. Smith continues:

"Computers also allowed production to reorganize itself, with the rise of outsourcing. When electronic records and documents and written communications could be transmitted easily between companies, it became easier to split supply chains into pieces and have each piece specialize in what it did best....  the general point here is that in order to realize really big gains from new general-purpose technology, you often have to figure out and implement whole new ways of organizing production in the economy."

Smith goes on at length, but the key relevant points are that the computer revolution that started over 50 years ago required a change in the way we think about work. It made decentralization possible because we no longer needed those files or central processing equipment. But it was also resisted by management because as we noted in the last revolution, "they simply struggled to think through the implications of a world where everything needed to adapt to the new technology"

There is nothing new about Zoom, and Webex has been around for 25 years. The tools have been hanging around, waiting for management to clue in, thanks to a big kick from the pandemic. Treehugger has been promoting it for years because of the possible carbon savings, but Smith points to an interview with Professor Robert Gordon, who says it will increase productivity:

"This shift to remote working has got to improve productivity because we’re getting the same amount of output without commuting, without office buildings, and without all the goods and services associated with that. We can produce output at home and transmit it to the rest of the economy electronically, whether it’s an insurance claim or medical consultation. We’re producing what people really care about with a lot less input of things like office buildings and transportation."

When you start examining the carbon footprint of our lives, it is remarkable how much a difference these changes could make.

According to the EPA, almost 30% of greenhouse gas emissions in the USA come from transportation, and we noted earlier that 37% of transportation emissions came from driving to and from work. Then of course we size our highways and subways around rush hours to offices, and build millions of parking spaces to store all the cars. So much can change if we accept the revolution instead of fighting it.