Tuesday, September 11, 2012

“A Brave New World”

Sydney M. Williams

Thought of the Day
“A Brave New World”
September 11, 2012

Last Wednesday’s Wall Street Journal carried an article: “Step Into The Office-Less Company.” Three weeks ago, the New York Times printed something similar, “Sleepwalk to Work.” A little over twenty years ago, Charles Handy wrote a book, The Age of Unreason, in which he foresaw the disappearance of life-long jobs. Last week I received a request from a “virtual” firm looking for analysts. A recent Stanford analysis of a Chinese call-center company found that home-based employees were more productive than those that were office-based. They handled more calls per minute; they took fewer sick days, and they were less likely to seek employment elsewhere. With a growing number of virtual and home-based businesses, the job market is changing around us and will have implications for most every aspect of our lives.

This past weekend at a nephew’s wedding in Easthampton I spoke to a niece and niece-in-law, both of whom have home-based businesses. My niece in Vermont: www.mooglevermont.com, while my niece-n-law: www.melindabaxter.com. They join my son and daughter-in-law: www.lyceumassociates.com and www.beatrizwilliams.com. It is, indeed, a new world.

The credit crisis of 2007-2008 and its accompanying recession had the devastating effect of producing the worst job situation in decades. There are five million fewer workers than there were in 2007, according to Mortimer Zuckerman writing in the weekend edition of the Wall Street Journal. He also notes that despite the population having increased 31 million people since 2000, fewer Americans are at work than a dozen years ago. The answer for many has been a proliferation of people starting their own businesses.

There will continue to be factory floors and rooms filled with people trading securities; there will always be schools, restaurants, resorts and hotels. (However, increasingly colleges are offering degrees that one can earn via internet-based courses.) We will always have hospitals, shopping malls and prisons. Cars will have to be serviced by men and women working in real auto dealerships. However, the advent of computers and the internet and pressure from overseas competition, is changing the workplace. Increasingly, people are performing jobs that can be performed from home at home. Games, architecture, software and medical products can be designed, if not produced, on home-based computers.

In Old Lyme, Connecticut where I live, there are, according to the State of Connecticut, 400 home businesses. Old Lyme is a village of 7500 people, in about 3000 households – suggesting that about 13% of all homes include a home business. The State of Connecticut derives the number of home businesses based on the levying of an annual $250.00 business entity tax. Of course, there are assuredly others who operate from their homes without bothering to register. While I was unable to get the number of home businesses a decade ago, I have been told that the annual growth in home-based businesses is in double digits.

According to Rachel Emma Silverman, who wrote the Journal article, 2.5% of the workforce in 2010 considered home its primary place of work. (Those numbers differ substantially from what I know of Old Lyme, but perhaps the difference is in the words “primary place of work.”) The numbers, which come from census-data analysis, indicate a 66% increase from 2005. Catherine Saint Louis, who wrote the piece in the Times, admits that nobody knows how many New Yorkers are running a business from home, “but it’s a lot.” Astonishingly to me, Ms. Saint Louis notes that in 2008, 65.2% of all businesses in New York City had fewer than five workers, up from 63.9% in 2000.

That fact may, in part, explain why, according to a Rasmussen Poll quoted by Charles Koch in Monday’s Wall Street Journal, 68% of voters said they believe “big government and big business work together against the rest of us.”

Writers, musicians and artists have long worked from home – or, at least, a principal part of their creative time is spent at home. My parents were both sculptors and later on had a small home-based business where they produced toy rubber animals; so I grew up in such a household. For many years insurance and real estate agents, with odd hours including weekends, have had home offices. On Wall Street today, many analysts spend at least part of the time working from home. (This TOTD was started at my home in Old Lyme.)

The California-based company discussed in the Journal’s article has 123 employees working in 26 countries, 94 cities, including 28 U.S. cities. The company hosts servers for the blogging platform, Wordpress.com. Because the employees work in many time zones and their work requires a certain amount of collaboration, they often work asynchronously, reminding me somewhat of the way the “book” at Salomon Brothers was passed from trading desk to trading desk – following the sun – from Tokyo to London to New York, and then back to Tokyo. Ms. Silverman quotes the CEO of a design-review software company ProofHQ: “Managing ‘distributed’ teams requires 25% more effort than a face-to-face team because managers must pay close attention to whether workers are motivated and fully understand tasks and processes.” However, he adds the expenses for the virtual company are about 50% less than for one having fixed real estate costs.

The proliferation of video games, with many students devoting hours each week to being alone on a computer, is creating a cadre of young people who have substituted traditional networking to virtual social networking, making it more likely they will adapt to the rigors of working from home. Instant messaging, chat rooms, social network sites and skyping allow employees to stay connected, or to at least feel that they are.

Nobody fully understands the consequences of this shift away from traditional offices. My niece in Vermont spoke of the quality of living. Her husband, a derivatives trader, has his Bloomberg set up in the barn out back, and speaks to his London Clients in the early morning hours, freeing him to spend more time with his family.. (She tells me that home-based businesses in Vermont are often referred to by the acronym BOB – with offices set up in the ‘barn out back.’) Both young women mentioned the personal pleasure they derived from interacting with people over the internet and how bantering back and forth in real time made them feel connected. They both also said that their personal lives had changed for the better.

In colonial days, most businesses were home based, whether it was the blacksmith, the doctor, the baker or cabinet maker. The industrial revolution saw the rise of factories, and then Henry Ford created the assembly line – improving efficiency, but increasing the monotony of the job. Factory automation has reduced the need for many assembly line workers, but necessitating the need for engineers, computer programmers and industrial designers. Computers have meant that some of that work can be performed offsite. In a sense, it is a returning to our roots.

We are, in my opinion, in the early innings of a revolution that will have dramatic consequences on the way our lives will be lived. Social interaction may decline; family time may increase. Self motivation will rise in importance, as well as the ability to compartmentalize one’s time. The firm looking for analysts stressed the candidate “must be able to work independently and be comfortable working from home.” But because of the interconnectivity allowed by the internet, the individual must also have the “ability to work in a collaborative, team-oriented environment.” Small businesses will continue to be the employer of most Americans. Unfortunately, since they cannot be compartmentalized for political purposes, they collectively have less political clout than their big brothers. Nevertheless, they need from government two essentials – simplified and easily comprehensible regulation and a simplified tax code that encourages innovation and hiring, and does not require an army of expensive lawyers and accountants.

Futuristic novels, like H.G. Wells’ The Time Machine, Aldous Huxley’s Brave New World, and George Orwell’s Animal Farm, principally concerned themselves with the communal world of sameness and conformity, along with good versus evil. Perhaps their predictions will prove wrong not in the absence of evil, but in the prophecy of the Eloi or the Morlocks Wells suggests we might become. In contrast to the hopes and expectations of the Left, perhaps man is driven by individuality, independence and self reliance. Man is almost infinitely adaptable, and that is a good thing. In his book, The Time Machine, Wells writes: “There is no intelligence where there is no change and no need of change.” The desire for personal freedom is what causes us to worry about the effects of cronyism – the partnering of big business, big unions and big government – and encourages us to embrace the myriad opportunities that changes in technology and communications have provided us.

While all of the virtual companies of which I have read consciously bring together all their employees at least once a year, we should applaud the initiative and creative spirit that has shown that people will do for themselves what others cannot. While government promotes a culture of dependency, many individuals are discovering their own solutions. Who will be better prepared to face an uncertain future – he who succumbs to the siren call of a government that fosters dependency, or she who becomes self-reliant?



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