The coronavirus remote working boom has made many modern offices obsolete and the impact on the economy will be profound

The announcement this week by Facebook that they would begin to allow most employees to work remotely was among many this week from technology companies announcing similar moves towards remote working.

The coronavirus outbreak has seen a massive increase in the number of people working from home. In 2019, only 5% of the UK workforce worked exclusively from home. In April 2020, 39% of workers worked only at home, and whilst this has fallen to 33% over the last couple of weeks the high rate of home working can be expected to remain high for some time.

The pivot to remote working amongst technology companies is likely to have a significant impact on Ireland, and Dublin in particular. Dublin has approximately 3.7 million m2 of office space, up from around 1 million m2 in 1990.

Technology companies have driven the majority of take up of office space in Dublin over the last few years (56% in 2019), and much of the growth in office take-up has been driven by large transactions such as Facebook (81,000 m2), Salesforce, and LinkedIn (both around 40,000 m2). The move to remote working is likely to have a significant impact on demand for new office space in the city.

Over one in five of the 2.4m workers in the Republic of Ireland work in Dublin, with 6% of the working population commuting to Dublin for work. The growth of employment opportunities in Dublin city has contributed towards a massive increase in the cost of living in the city, with the average cost of a property in Dublin having increased by 56% over the last ten years.

Housing was by far the largest issue facing voters in Dublin at the recent general election, with 49% of respondents to a Irish Times/Ipsos MRBI poll in the city listing housing as their number one priority, ahead of health (27%), climate change (10%) and the economy (8%). The housing issue has been a key driver behind the rise of Sinn Féin as an electoral force.

The abrupt spike in remote working caused by the coronavirus pandemic has caused many years’ worth of social change to happen virtually overnight, and an increase in new jobs being available to remote workers could lead to a decrease in demand for housing and commuting to large cities.

There are several reasons why this could be a welcome development. Ireland has significant problems with rural depopulation. A campaign by a village in County Cavan to attract families to move is symptomatic of population decline in many rural areas.

The increasing available of fast broadband will increasingly make it less necessary for jobs to require physical proximity to large cities, which could have positive developments for spreading wealth across the country, reducing carbon emissions from commuting, decreasing the cost of living in cities and improving the quality of life for those who have to commute long distances to work.

However, the rise of remote work could start to bring increased competition for employment opportunities between countries as well as between regions. Facebook have announced that they will be adjusting pay for those who choose to live in less expensive areas than San Francisco’s Bay Area, and as many more roles become geographically flexible the trend of salaries varying depending on where employees live is likely to become more prevalent.

On a worldwide basis, salaries in Ireland and the UK are high. A typical annual salary for a Data Scientist might be $135,000 in San Francisco, $70,000 in Dublin, $13,000 in India and $5,000 in Nigeria. Increasingly, middle class professionals in developed economies will find themselves increasingly afflicted by the same issues faced by their blue-collar counterparts. The forces of globalization could start to see more high skill work migrate from developed economies to poorer countries.

The decline of traditional industries has driven a rise in populist politics in countries such as the United States and the UK, and the remote working boom could well exacerbate these forces.

There are other problems with a mass move to remote working that will need to be addressed. For example, the remote working boom could exacerbate problems with gender equality; data has shown that women do three times more housework than men where both partners work full-time, and women who work remotely spend more hours per week on childcare than those who work at an office.

The coronavirus pandemic may well be looked back on as an inflection point in history. Over the space of just a few weeks, huge swathes of the world economy have been put on ice, and many aspects of the pre-2020 economy may simply never return.

The rise of remote working will pose fundamental questions regarding how we live our lives and how the economy is structured. Whether a better society emerges from the ashes of the pre-pandemic economy will require rapid solutions to questions that have barely been pondered yet.

Climate change poses a far greater existential threat to our civilization than the pandemic. However, the response to the crisis will likely dictate whether we will be able to pull together to crush the carbon emission curve, or whether we will descend into fractious squabbling as our way of life plunges towards the abyss.


“File:Man Working at his Laptop on the Couch Cartoon Vector.svg” by VideoPlasty is licensed under CC BY-SA 4.0

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