The Stack Archive

Telecommuting: Beyond regional economics

Mon 9 Mar 2015


michael-shearMichael Shear is the President of the Broadband Planning Initiative in Washington DC. In the first in a series of feature articles about the challenges – both infrastructural and institutional – that face proponents of remote working and telecommuting, Michael addresses the background to the issues…

We are faced with a number of critical challenges to find new ways of building or re-building our communities and local economies. The paradox is that while we are in the throes of change, in large part from globalization and the disruptions caused by information and communications technologies, we have yet to engage in a thoughtful and thorough conversation how to embrace this set of transformative infrastructure tools in ways that provide effective solutions to our challenges.

In part, the dilemma is exacerbated by the nature of information and telecommunications as somewhat ‘invisible’. Our schools of urban development and public policy include little, if any, curricula on this topic. Economic and regional development organizations have limited understanding of how to identify aggregate demands and opportunities for incorporating this powerful infrastructure tool into short-term and long-term planning.

The information economy and information technologies have caught us by surprise

Information and communications technologies have swept across the globe and their economic impact affects every community throughout the United States. Not only has this revolution accelerated the growth in the information economy but it has also facilitated the rapid transfer of American jobs to other countries. As America struggles to find its policy footings regarding these swiftly advancing services and technologies, fundamental changes to social and economic structures are well underway.

While classical views on the future of metropolitan communities, regional economic development and sustainability planning approaches provide strong emphasis (if not sole) on the transportation and mass transit infrastructure or focus on increasing densities, they exclude any mention of information and communications infrastructure as a tool for planning 21st century communities.

As global labor markets have rapidly evolved and manufacturers have moved operations abroad to derive lower labor costs, communities have been left devastated by their dependence on single employer models.

As a ‘new’ infrastructure, relative to transportation, telecommunications planning and implementation is left primarily to commercial service providers with little involvement from community leaders and planners relative to creating a community co-operative needs assessment or vision.

In most instances, public leaders lack the familiarity and capability to facilitate telecommunications infrastructure innovation in their communities. The pace of globalization and corporate access to foreign labor has increased the likelihood that the private sector will invest more heavily in developing economies than here in the United States. While employers used to provide a level of assurance to employees for continued job security, medical coverage and on-going education, leaders and planners are now finding those assurances are falling more directly on the communities themselves.

There is a general understanding that something must be done to advance telecommunications infrastructure throughout the United States and that a correlation exists between advanced telecommunications infrastructure and economic gain. Our initial efforts have focused on the general notion that ‘more connections’ and ‘faster speed’ will achieve positive economic benefits and that universality is the cornerstone of our initiatives. In essence, this ‘shotgun’ approach will yield some results but may not be the only effective approach to marshal the full potential of telecommunications resources.

To paraphrase Luc De Brabandere (The Forgotten Half of Change -2005): It would seem that the very foundations of our life and society have shifted. Information is now the key resource and we are obliged to rethink space, time causality and perception, since the concepts on which they were based are no longer what they were. For change to be successful, we have to change on two levels: our reality, the things we do and our perception, the way we think.

Economy in transition

Rapid globalization is, in large part, the consequence of the revolution in information and communications technologies and the rise of the Internet.

Tom Friedman, New York Times columnist and Pulitzer Prize author, pointed out in his book, The World is Flat (2005), that globalization was propelled by the unconscious confluence of a number of technology events. The disruptive and transformative nature of these technologies gave rise to a rapid transference of knowledge and subsequently the jobs associated with it to the lesser developed nations. In essence, it has commoditized labor.

Jim Clifton, CEO of Gallup, writes in his recent book, ‘The Coming Jobs War’ (2011), “What the whole world wants is a good job” which he defines as a formal job outside the home with a specific and predictable paycheck. He says that currently there are approximately 3 billion people competing for 1.2 billion ‘formal’ jobs and that this contention is one of the most critical issues we face today.

Bill Davidow, tech-industry executive, venture capitalist And author, writes in the Atlantic Magazine (The High Cost of Low Bandwidth- 1/25/2012) “When we attempt to understand the implications of the Internet Age, the first thing we need to do is recognize that office buildings, retail stores, air travel, lecture halls, and paper are just clunky, expensive, and low-bandwidth interconnections. Many things that seem as solid as the Rock of Gibraltar are, in fact, information proxies in disguise. We can view these information proxies as two separate pieces: an information sensitive piece, and a second piece with a valuable function that cannot be displaced by better virtual environments. The Internet peels away the information-carrying portions of these physical things and institutions. Frequently it leaves behind skeletons of little value. In the process, the Internet restructures and renders much of our physical infrastructure obsolete.

Community crises

Community growth models and corporate planning processes still retain this ‘single location’ mentality

In the boom of the post-WWII industrial age economy, two predominant factors existed. The first was that our workforce was focused on manufacturing and factories. The second was the reliance on transportation and creation of our national highways to facilitate mobility. The production of goods required a single location to bring all the tools of productivity together – raw materials, power, transportation, and labor. Every community vied with neighboring communities to lure employers to move to their locations with the promise it would produce jobs in the local community. As global labor markets have rapidly evolved and manufacturers have moved operations abroad to derive lower labor costs, communities have been left devastated by their dependence on single employer models.

American workers and the American economy have transitioned to services and knowledge-based jobs, which are performed, increasingly, in cyber-space. But community growth models and corporate planning processes still retain this ‘single location’ mentality and, given the growth in extended metropolitan areas, are paying the price in terms of the growing costs of building and maintaining transportation infrastructure. The need to use all our infrastructure methodologies to expand access is critical and broadband represents a more realistic choice to support the knowledge-based workforce.

Along with an erosion of manufacturing jobs and the impact of global labor markets has also come the deterioration of the employer-employee social contract. In the post WWII economy, the employer-employee contract assured long-term job security, advancement, education, and medical insurance. The outsourcing of manufacturing (and other) jobs has changed the nature of work in America and has given rise to the knowledge workforce. But rapid globalization and commoditization of labor has eroded the foundation of this critical social contract between employer and employee. Job security and advancement, on-going education, medical insurance, a place to work, and the tools and energy to power them are falling increasingly on the individual and the community. If these critical elements are not available in the community, people leave to look elsewhere.

With the growing global labor market, individual incomes stagnate while the cost of living rises and workers are left with less disposable income to help stimulate the economy. If a more suitable, permanent and holistic method can be developed by employing telecommunications infrastructure to reduce the cost of access to jobs, then workers will retain more of their incomes to the benefit of their local community.

In the next feature, Michael will examine the issues of transport and the environment as they relate to the current debate about the economic and social merits of telecommuting


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