Why sooner or later businesses and consumers won't need bricks, buses or… cathode ray tubes anymore. Just a Virtual Office in London.
A recent article on a “decluttered digital economy” by Diane Coyle in the FT recently got the old gears ticking over and, leaning back into my digital armchair, connecting my digital fingertips a la Burns, I settled in for an evening of contemplation and repose.
The theme: the future. The method: generalisation. The end result: ?!... Emoji, emoji emoji.
“Technology is dematerialising the economy. The UK economy has grown by about 60 per cent since 1990, but the physical mass required to generate that output has fallen by nearly 20 per cent.”
Dematerialisation is the idea that as the digital economy expands primary industry disappears, secondary industry recedes and services multiply as fast as an estate agent greases up his hair, the actual meat and bones of public physical (consumer) life shrinks into chips, flat screens and smartphones. Remember cathode ray tubes? Thought not.
This means that not only do Brick and Mortar (B&M) businesses and services decline - UK bank and building society branch numbers have fallen over 40% in the past 25 years – but also that goods become distilled and channelled into more virtual spheres: phones and laptops replace individual consumer technology, hosting TV, Internet, radio and music.
For businesses e-commerce has huge promise in terms of capital utilisation and labour productivity. As Tim Pike of the Bank of England reported in a (less than recent) blog post:
“A Virtual Service requires less labour than one provided in-store, with the consumer’s computer input displacing the administrative services of the store worker.” Therefore “online services thus often have much higher labour productivity, and lower marginal costs compared with their B&M [Bricks and Mortar] counterparts.”
Will everyone work virtually in the future?
With decreased need for physical presences and customer interface the demand for administrative staff falls as the need to operate and manage buildings, staff and infrastructure becomes voided. These advances bring lots of benefits to the consumer, including more competition and greater transparency of pricing whilst also increasing firms’ capital productivity.
With this in mind it is not to say that 'everyone' will one day work virtually and hands free of client face to face interaction, but that customer service operations will become increasingly efficient and the need for personal face to face interaction will decrease as goods and services are deployed via courier (often same day delivery).
Is the digital economy evolution bad for every-day workers?
Some staffing requirements drop, sometimes completely, leaving some workers having to re-design their working lives around a new business model – this is not to say that jobs disappear completely - they change, and often grow into more technical and advanced opportunities that offer higher pay.
The ‘sharing economy’ is the realisation of a utopian ideal that amalgamating resources and technology to save on financial and environmental costs also means a reduction in incumbent services that have been in-efficient when supplying, products and services until the advent of the digital era.
Recent advances in supply as software as a service (SaaS) have created ride-sharing, flat-sharing and office-sharing for regular people; all realised through the evolution of the digital economy improving the lives of hundreds of thousands of people around the world every day.
How will will the evolution of the digital economy aid virtual workers?
As a provider of virtual offices and business outsourcing solutions, we embrace the developments in digital technology that have enabled people from all over the world to streamline their company processes into quicker, cheaper and less CO2 emitting moulds.
"For us, London Virtual Offices and Virtual Telecoms enable small businesses to reach more markets, build better brands and start businesses from all over the world".
To that end, the more people working virtually the better. But what of the future of technology in society? How will it change the consumer landscape, and the business ecosystem that underpins it?
Will we be looking at a driverless transportation network run on a solar panel grid so vast it frees our global economy from it's catastrophic environmental, social and political dependence on oil?
Will our high streets be replaced by the formless primary colour sheen of steel containers and warehouses stocking multi-use miniature products that grow applications in inverse proportion to the size of their shrinking microprocessors?
Will we ever have to leave our bedrooms as higher education transforms into the cultivation of a select few, mainly online skills that enable us all to provide flexible services for other flexible workers in a virtual, cyclical world?
These are the questions that keep us up at night.