The world’s biggest companies are going remote and that’s great for everyone.
Silicon Valley and San Francisco rent prices have dropped 35% this year. Tesla and Cisco have moved their offices and teams away from America’s most expensive cities. Big tech is fully embracing remote work and big tech has been driving global trends for the last 30 years.
And what does that mean for you? A lot, actually. The move towards remote work is creating opportunity and making the world more sustainable. All the stats indicate that this is not a trend, it’s a future that you can be part of.
Remote work is remaking where we live. It’s remaking how we live. It’s redistributing wealth and leading towards a more sustainable future. And the evidence starts in Silicon Valley.
The Rise of Remote Work Is Remaking Where We Live
San Francisco Rents Have Dropped 35% in 2020
In one way Silicon Valley and San Francisco have always personified the American dream. You can have no formal education or white-collar background and be earning $150k for a big tech firm. Except $150k doesn’t get you very far in San Francisco. It’s a city where $100k a year is considered the poverty line.
Back in 2015 the average price of an apartment within ten miles of San Francisco was at $4450 a month. It was almost impossible to buy a two-bedroom property for under $1million. Such eye-watering figures ultimately forced out local people, revealing the less salubrious side to the American dream. There are winners and losers and if you can’t afford $25 for a stale packaged sandwich lunch you won’t last long in Frisco.
The big tech companies are the biggest companies in the world. They can pay the most for the very best talent. And within 20 years there wasn’t room in San Francisco for anybody else. Yet the rise in remote work is remaking one of the world’s priciest places to live. Apartment rental prices in San Francisco are down 25 – 35% in 2020, dependent on the source. Tech stocks are soaring, yet the city boom is waning. The same drastic drop in rental prices are being reported in New York as well.
Offices sit empty. Remote working was on an upward trend before the pandemic, growing around 10% year on year. In 2019 around 7 million were working 100% remotely. Now there are 700 million people working 100% remotely. That’s a 100-fold increase and it’s not going away. Remote working is part of our new normal and it is now remaking where we live.
Tech Companies Drive Permanent Change
Technology is innovative, that’s why companies like Apple, Amazon, Facebook and Google are the richest in the world. Yet the tech way of working was not. Google’s offices were always celebrated as a ground-breaking example of change. There are colourful slides between floors, various play areas, a cafeteria to keep employees working, and playful designs encouraging creativity.
Climbing walls, beach volleyball, video gaming, swimming pools…Google’s headquarters was the dream place to work, the antithesis of cubicles and grey concrete building. Yet it is still an office. It still requires a daily commute (a very long commute if your salary doesn’t breach $500k and you can’t rent in the vicinity). These creative offices were celebrated, yet they already feel so old fashioned.
Now the tech companies are embracing the biggest change to happen in our working lifetime. There is a realisation that the office is no longer needed. It certainly doesn’t need to be as big. All the studies show that remote working increases work productivity, reduces business costs, improves employee loyalty and betters the work-life balance of everyone.
Elon Musk’s Tesla built a new factory in Austin and moved many employees to a remote model. Larry Ellison has moved to Hawaii as his company Oracle heads to Texas. Adobe employees are working remotely. So too are most Amazon employees. Coinbase, Upwork, Zillow, Twitter and Square are all remote-first. Facebook plans to keep staff working remotely until July 2021 at the earliest. 140,000 Siemens employees can permanently work from home two to three days per week.
Remote working is now the default, even when office space is retained. Then there are the 100% remote work companies such as Gitlab, InVision, Automattic, Toptal and Zapier. Most people around the world have now had the opportunity to work remotely in their current job, either temporarily, permanently, or at least some of the time. Which means we can celebrate space instead of being squashed.
Remote Work is Remaking Where We Live
For the entire history of mankind we have lived where we have worked. Whether early hunter-gatherers or corporate executives we have always been required to live close to where we make our living. So we’ve squashed into big, growing cities, close to the jobs where we can earn the best money, to pay for the expensiveness of where we live. And now, for the very first time, we can truly value and celebrate space instead.
City dwellers are moving to the suburbs. Suburb dwellers are moving further away. Cities are becoming affordable again. Downtrodden neighbourhoods and rural towns are reviving. Throughout human history the greatest opportunity has resided in the wealthiest places, whether that’s the most fertile soil or most booming inner city. Now this economic opportunity is spreading and we have space to realise lifestyle opportunity.
Without tech this wouldn’t have happened. Not only are tech firms pushing today’s change, it’s modern connectivity that has ultimately made all this possible. You can move to a remote village and still be connected to work via smooth video calls. You can collaborate online from the Kenyan bush, an Arctic forest, and beautiful places always considered too remote for modern life.
Redistributing the heavy city concentration of job opportunities also saves businesses money, at a time when most are desperate to cut costs. Salary expectations are a combination of job requirements and employee experience, multiplied by job location. When employees live and work from less expensive locations they don’t expect Silicon Valley-adjusted salaries. Coronavirus has forced so many firms to try remote working and while there were evidently many hiccups along the way, the long-term benefits of beginning to shine.
Remote Work & Wealth Redistribution
Remaking where we live then helps to redistribute the wealth we create. This isn’t a Communist-era utopian phrase and it’s not what happens at an individual level. Remote work is driving economic redistribution on a macro level. If you’re working remotely for a company located in a wealthy city or country, you can be funnelling that wealth into the different city or country where you live. This is win-win, because the value you create in your job ultimately goes back to the city or country where your company is located.
This is a game changer on so many levels. Digital nomads spend almost every night of the year away from any “home.” They funnel their dollars into local economies for 12 months of the year, whereas a tourist does the same for only two weeks of the year. By relocating away from the big city, remote workers now redistribute big city wealth to suburbs, smaller towns, villages and rural areas.
Concentrate wealth in the same place and within 20 years it costs $4500 a month to rent the average apartment. Concentrate wealth in the same place and that place returns disproportionately poor value, yet there is no alternative as this is where the work and wealth is located. With remote work the wealth is not completely siphoned away from these wealthy areas. Remote works redistribute but they also continue to help create wealth for that big city or country.
Remote Work Is Central to a Sustainable Future
2020 has changed the world. It’s certainly changed our world. The pandemic drives a need for physical isolation, for getting away from each other, for keeping our distance. Many of the worst hit places are those where the population density is high, where people were already too close together, where wealth was heavily concentrated yet everyday value was poor.
Coronavirus has helped people connect with nature. It’s helped people value space. It’s shone a light on the very serious, everyday pitfalls of cramming more and more people into the same place. Remote work came unexpectedly to many, but not to the 7 million who already worked remotely. And as remote work becomes dominant it accelerates a move to a sustainable future.
It’s not just economic redistribution. Carbon emissions have been cut as hundreds of millions of people around the world no longer need to commute. There are other ecological benefits as well – we now print less, use less electricity at work, recycle more and reduce the volume of single-use plastic, including coffee cups. All because we have changed where we work.
And on an individual level, working remotely helps to create a healthier work-life balance. While some struggle with a lack of social interaction and loneliness, it’s important to remember that these named “side effects” of remote work are what many of us are struggling with during a time of lockdowns and social restrictions. Most surveys are unanimous in proving the sustainable lifestyle advantages of remote working.
Individual Sustainability and Advancement
The benefits of remote working have been widely celebrated. Most notably, working remotely gives you more time. There is no commute and often more flexibility over when you work. Anyone with a 45-minute one-way commute now has an extra 7.5 hours free time every single week. That’s an entire work day free, just by not being bumper to bumper or crowded into the subway.
That’s more time to be healthy, including to eat healthier because you can eat at home rather than a packaged meal in the city. There is the improved well-being that comes with reducing mental and financial stress. And while Covid-19 has reduced and removed many of our everyday freedoms, remote working will ultimately create new and improved freedoms in the future.
The freedom to work anywhere. The freedom to live anywhere. The freedom to be free of a wealth trap that makes a $100k salary the poverty line. And now the freedom of opportunity to not only work anywhere, but to work for a company that is based anywhere. Suddenly it’s an entirely new world. You are no longer restricted to jobs close to where you live, or in places you are willing to live. Companies have access to a wider talent pool while workers can focus on the job they want, knowing they can live where they want.
San Francisco Rents Help Indicate a Positive, Sustainable Future
So while it may initially seem unimportant to know that San Francisco apartment prices have dropped 35% in 2020, there is an underlying current that is already sweeping across the world. The longer we work remotely the more normal remote work will become. We will all get better at remote working, as individuals, teams and companies. And after the pandemic has finally passed it is very unlikely we will return to how we lived and worked before.
An analogy can be made with surfing. The current is known and a set of waves is rolling in. The first wave has already been surfed by the remote work pioneers, the 7 million working remotely before the pandemic. They were first to their feet, first to adapt to new opportunity and future-proof themselves, before the rest of the world knew it was possible to surf a wave.
The big tech companies are on the second wave. It is a bigger wave with even more opportunity. There is still some space on this wave. And there’s another wave following behind, taking the same direction, following the big tech firms. Of course there are those accustomed to placid waters. Some paddle around the waves and after much splashing they can paddle out beyond the waves. It is here where the most uncertain future awaits. Some paddle against the waves of change. And you? Or me? Now is the time to jump up, be part of the change, find a sustainable and redistributed future for ourselves and our planet.