Will entrepreneurs flee Silicon Valley and New York City in this new normal?
Grow Your Business, Not Your Inbox
(ENTREPRENEUR LEADERSHIP NETWORK CONTRIBUTOR/Principal Going Global Ventures and AI Digital Expert)
August 21, 2020 5 min read.
Opinions expressed by Entrepreneur contributors are their own.
San Francisco, New York, Berlin, Singapore –– each of these major global cities relate in that they are major hotbeds of innovation. These cities hustle and bustle for a reason: critical meetings on the state of the nation’s future were being conducted, entrepreneurs and idea makers were putting their heads together to invent new technologies, and whiz kids met over cups of coffee to discuss startup ideas.
There is something about the physical environment and face-to-face interaction within such ecosystems that enables humanity to formulate and execute game-changing innovations. Yet, in a step toward making remote work a permanent future, Facebook, Google and Siemens told their employees that they can work from home until July 2021. The nature of many jobs has changed, with remote work becoming the next normal. This shift towards “digital by default” and “remote-first” structures has been cranked to its maximum capacity across the country, causing innovation to take on a new face.
However, there are claims that physical isolation of employees could potentially hamper product development and innovation. In a Bloomberg Opinion piece, Tyler Cowen wrote, “Even as tech companies grow more essential, the geographic distribution of company activity will also make them less unique. They’ll start to resemble a typical cross-section of the workforce, with all of the routines and bureaucracy that most other companies experience. They’ll have less fire in the belly to disrupt and overturn previous institutions.” Clearly, the disjointedness of the whole situation can have a negative outcome on enterprises and idea-making. Regardless of this fact, people seem unbothered. In fact, the article also claims that 60 percent of Americans would like to continue working from home, even after the pandemic subsides.
Another study by Google on remote workers found “no difference in the effectiveness, performance ratings or promotions for individuals and teams whose work requires collaboration with colleagues around the world versus Googlers who spend most of their day to day working with colleagues in the same office.”
IBM, the pioneer of teleworking, eliminated almost all of its office work years ago, and then released a report entitled “Challenging the modern myths of remote working, the evidence for the upside of teleworking.” Already in 2014, they boasted about their innovative modern business model with over 40 percent of their employees working remotely. Remote work has the potential to destroy innovation hotspot’s like Silicon Valley, as it has prompted entrepreneurs to disperse themselves across their respective countries at an ever-increasing rate.
Offices have been ditched for Discord Servers, Zoom, Slack Channels and the like. Over the last few months, multiple news sources have confirmed that people are drifting away from cities towards urban and rural areas. Could this pandemic really decentralize tech opportunities away from just a few hotspots, such as San Francisco and New York? https://tpc.googlesyndication.com/safeframe/1-0-37/html/container.html
According to Bloomberg CityLab, cities that traditionally haven’t been known as innovation hubs have begun to institute incentive programs to “lure tech workers to work from home in a new location.” The article further states, “Employees are proving to their bosses that remote working isn’t only possible, it’s preferable — at least for now — and the prospect of a work-from-anywhere future now seems less hypothetical. So instead of trying to lure whole companies with economic development incentives, more cities are beginning to target individuals who suddenly have the agency to pick a city on its merits, not its employers.”
These developments have major implications for the global innovation landscape as a whole. Just like Florence in the 16th century, creativity never stopped. These new challenges may change places like New York City and Silicon Valley — or even destroy them — but it will probably emerge somewhere else in a different form.
It is also important to mention that trust between partners is of the essence when it comes to collaborative invention. David Shrier, program director at Oxford Cyber Futres, wrote for Raconteur: “Research from Massachusetts Institute of Technology has shown successful innovators build a foundation of trust around micro-interactions that occur in the workplace. And the Allen Curve shows that if you don’t see someone face to face, you don’t collaborate with them.” Therefore, remote work has cut off a vital part of how humans invent and make ideas –– and that is trust in a physical setting.
However, to say that remote work will spell the end of innovation is hyperbole. As per Raconteur and Professor Bernd Irlenbusch, who co-led a study titled Innovation and communication media in virtual teams: an experimental study, by the University of Cologne and Leibniz University Hannover, “Previous research has shown that creative performance is significantly lower when there is no face-to-face communication. However, the current lockdown has fostered the adoption of new technologies to conduct collaborative tasks when team members work from home. Video conferencing can mitigate the gap in creative performance.”
People will still need trust and real relationships to develop ideas, especially because creativity comes in surges and often unexpectedly. We will work remotely but human contact is part of our DNA and we will need to establish new routines with augmented reality (such as social online meetings) that can be put in place to foster collaboration and more human-like meetings instead of solely relying on cold, unemotional online meetings.
The most important takeaway that emerges from all of this information is that, as a result of our current challenges, the innovation landscape will never be the same. Remote work means that a new species of entrepreneur has emerged, and those who adapt fastest will be best-suited moving forward.