Many of you will have come across the various forms of the “Did You Know?” or “Shift Happens” slide shows over the past decade or so – there are several versions on YouTube, of course.
Regardless of how accurate you believe the figures presented to be, the facts of the matter are that the nature of work is changing more fundamentally than many people yet believe – and is doing so more quickly than any major change that has gone before.
Urbanisation really came into its own with the Industrial Revolution: although towns/cities had existed almost from the dawn of civilisation, it took the centralising of manufacture to drive the majority of the workforce into conveniently situated accommodation near to their work.
Now, though, two major factors are driving the next big change in the way we live:
- The increase of service industries – in the US and the UK, this already accounts for around 77% of GDP, v 22% for “traditional industry,” and even in China service industries are fast approaching parity with “traditional industry” in GDP terms (44% v 46%). Such “knowledge” work is far less location-dependant than manufacturing lines and their like.
- The increase in digital communication technologies and speeds which free us up from location dependence even more, as we can talk, meet (over video links), email, and so on from virtually anywhere, any time.
These factors are, of course, spawning ever-more smaller businesses focused on different niche market areas. Big business in many service areas is inefficient as management overheads lead to cost issues when compared with smaller businesses, which are also generally more nimble and able to adapt more rapidly to changing market conditions.
While the higher cost of property in cities was offset by the lower commuting costs which kept the populations of the cities growing, as people need to commute less to central locations so the need to live in a city diminishes and people become freer to choose where to live. Couple this with the issues over living conditions in crowded cities (the recent riots in UK cities underscore some of this) and a somewhat more rural residential lifestyle becomes attractive – less expensive, less crowded, quieter and less potentially dangerous.
The impact this could have on cities is enormous – property prices would drop as supply of properties exceeds demand and infrastructure investment would move elsewhere, following the people. Conversely, large-scale migration to more rural areas will create its own set of problems – residents objecting to large-scale growth (although the shop-owners won’t mind the influx of customers too much), crowded roads and creaking infrastructure which will have to be upgraded to handle the increased loads, and so on. District councils will start to compete with each other to offer the best combination of space (there’s no point moving from one crowded area to another), infrastructure, affordability and general lifestyle.
As location independence grows, the same, of course, should then start to happen at a country level. Some countries – Malaysia, for example – are busy today trying to attract retirees on the basis of lifestyle and costs, and so boost their economies through a relatively high-spending population. Can we expect to see a scenario in the next 10 years where countries compete to attract people on the basis of infrastructure, cost of living and general lifestyle, regardless of where the companies themselves are located?
What would this do for country citizenship, for taxation bases, social security networks and the like? Have you thought about where you would, or wouldn’t, like to live if you were able to be truly location-independent? How does your current country measure up?
- A guide to Central London property (frugalliving.co.uk)
- London burning undermines image ahead of Olympics – Reuters (news.google.com)
- Change of lifestyle – blog temporarily on hold (audiofieldrecordings.wordpress.com)
- India struggles to keep pace with urbanization (theglobeandmail.com)
Interesting way of looking at the issue at hand Guy. But let’s not forget that Europe and North America together only account for 16% of the world’s population. In the developing world the population is actually migrating to the cities.
What you are predicting may happen in the West, but I’m not so sure. Personally believe cities like London and New York will continue to attract an abundance of people.
Thanks, Catarina. Yes, urbanisation is continuing apace in the developing world, because they still have strongly centralised industries, like manufacturing. However this is changing – hence the rpaid escalation in China’s service industries as a percentage of GDP.
Once their countrywide infrastructure catches up and people are able to be location independent to an increasing extent, I believe there will be a move away from the massive cities again.
Hi Guy, Your argument does not appear to hold true. The Public Sector, possibly the largest employer in the UK, continually strives to centralise their operations (Local Government reorganisation commenced 1974) and now in the latest round are forming unitary authorities, PFI for large central hospitals, centralising fire control, coastguard stations, centres of education etc..Public sector is not alone, it is to be seen on a grander scale in the private sector with the banking and insurance industries. Their operating centres have evolved from individual offices of perhaps 10-20 staff spread throughout the country to one or two grand operating complexes containing +1,000 staff. Whatever the industry, centralisation is the usual method adopted to improve operating efficiency, reduce overheads and generally weed out unwanted staff, essential for survival in a competitive market, or as at present where operating in depressed markets. True; improved technology has allowed this centralisation, mainly due to the ease and speed of long-distance (even global) data transfer, but data has to be input and the problems generated by inaccurate or incorrect data input can be even more complex and time-consuming to sort out requiring the presence of support staff. This will remain until such time as artificial intelligence has been suitably developed (not in our life-time). I do not have any facts to hand, but I would suggest that much of the improved technologies are financed by, and diected towards the leisure industry, such as home computers, printers, television, videos, cameras, game machines, mobile phones, smartphones, tablets, controllers etc.
These technological improvements and changes in working methods will not necessarily mean that joe public can live out in the sticks wherever it takes his fancy. I think the opposite, with greater centralisation through the above, encouraged by limited resources having to be directed towards more useful, centrally placed technologies (such as expensive hospital equipment, control centres, energy stations), increasing energy (reduction in line transmission losses will save a lot of energy) & fuel charges. Local authorities are having to cut-back on non-essential services such as public transport, meals-on-wheels ….and all sorts of obscure services which used to aid and benefit those living away from main centres of population. I personally believe that the ‘countryside’ will eventually be regarded as a ‘leisure park’, it’s already happening, as farmers diversify away from traditional farming towards recreational activities and the leisure industry. Cities will take advantage of the industries’ version of benefits of scale, by centralising services such as health, education, welfare, accommodation, transport, energy, thereby attracting population towards these centres of excellence. It will then become more of a hardship living out in the countryside, definitely not for the retiree.
Thanks for your comprehensive input.
Whilst I agree that companies of all sizes are continuously on a drive to improve efficiency – particuarly the biggest ones which, as a result, tend to shed jobs over time (particularly following mergers/acqusitions), this gives rise to other problems.
Large companies are notoriously slow to react to market changes and so find themselves impacted by much smaller, more nimble competitors. You only have to look at, for example, the Fortune 500 over a few decades to see how the fortunes of these giant businesses change (granted, a few continue to prosper for considerable periods of time, but these are the exception rather than the rule).
Secondly, and this is even more the case in a downturn – and it looks like v2.0 of the current economic problems is on the way – people that lose their jobs are left with little alternative but to start new businesses. Many of these, of course, go straight into the gaps they perceived their former employers to be missing. Either way, you see a rapid increase in the numbers of businesses.
As regards location independence, technology is permitting this – an early example was call centres in distant lands, invisible to the consumer. Nowadays, vastly increasing numbers of people work – at least some days of the week – from their homes. I accept that those in industries requiring physical presence (health care, for example) do need to be in a given location, but a rapidly growing population of people in other businesses are location independent. Broadband coverage, once the preserve of big cities, is becoming every more pervasive, so increasing the capability of remote operation (and even virtual meetings – look at how video conferencing is growing).
Smaller towns/villages which have suffered somewhat in the last 50 years are looking for ways to reinvigorate themselves. With the growing costs of city property (for businesses and homes), increasing concerns about personal safety, and so on, these smaller places start to look more attractive. If the need for expensive communting is removed, they can offer a very viable alternative for a growing proportion of the workforce. If the local authorities can attract people to these areas, they will once again be able to achieve the necessary economies of scale to provide some of the services, so adding to the impetus of attracting more people.
I’m not suggesting a flood of movement – not yet anyway – but I do believe there will be an increasing move away from the largest cities to more “human-scale” areas as these will offer a better quality of life in so many ways.