Remote Work Is Part Of Technological Evolution: Disruption Is Happening
A rule of thumb:
Never look at the world through the eyes of your generation, unless you are the ones about to take over.
This is a mistake that most people make.
Right now we have the Baby Boomers hanging on. This is their last go around. For the most part, within the next 5-10 years, the majority of them will be dead and most will be retired.
In other words, this is the past generation.
Generation X is not as bad off but it isn't much to pay attention to. Just based upon the demographics, the first wave of them will likely be near retirement in a decade. There is also the fact it is a very small generation in number compared to the surrounding generations.
The Boomers, in the United States, were the largest generation ever. Following on its heels is the Millennials who come in number 2. These are the first ones to pay attention to.
Technology
While the numbers are what stand out, to me the important factor is technology.
The Boomers, for the most part, are technologically averse. It does not come natural to them and they really are stretched to embrace the pace of change. Certainly the second half is more adept than the first but, overall, both are lagging.
With Generation X, this can go either way. Some equate it to a sandwich. The Boomers and Millennials are the bread with Gen X the meat in the middle. Each slice of bread is different in this sandwich. The Boomers lean away from tech while the Millennials towards it.
Which way does Gen X go?
This is up to the individual. There are some who are now in their late 50s and never used a computer for their work. Others are akin to the millennials since they have no problem working with technology.
To me, this is the important question. It is also crucial to keep this in mind when you hear CEOs discussing different work related topics. What generation are they from? If they are a Boomer or front end Gen X, there is a chance they have a different outlook than the Millennials.
The key point here is neither is going to be in charge a decade from now. We will have a quick pass through of power from the last Boomers to the first wave of Millennials. A few Gen X will be have positions of control but, for the most part, the voids left by the Boomers will go further down.
How can it not? There are not enough Gen X to replace all the Boomers. This is a grand opportunity for many of the Millennials.
Remote Work
Why did I spend so much time on demographics when writing about remote work. It is important to realize how generations are when forecasting. While Boomers (and first generation Gen X) are quick to say "return to the office", the ensuing generations are thinking "drop dead".
Hence, we already have a tug-o-war at the generational level. This gets compounded by the fact that remote work is completely in alignment with technological advancement. While many believe that things will always remain the same, this is not the case.
In fact, the ones calling for a return to the office tend to be companies with plenty of money. We see CEOs like Elon Musk and Jamie Dimon pushing it. Both have plenty of cash and are not really worried about the cost of real estate.
The same is not true for many other firms, especially those in some major cities.
Here is a video detailing the plight of commercial real estate in San Francisco. Watching the video, you not only see names such as AirBNB mention but the likes of Adobe. That is pretty stunning when a long time company like that is making adjustments.
Of course, we cannot claim all of this is related to the push of technology. There are always multiple factors in play, such as crime which was mentioned in the video. However, many other factors have been in existence for a long time in certain areas. What is new is the technology?
Remote Works Has Many Benefits
People like to point out the downside to remote work. Naturally, there are drawbacks to this. Nothing is ever perfect and completely beneficial. There are trade-offs.
However, when you watch that video and see the amount of money these companies are forking over to get out of leases, we have to realize what is going on.
Companies understand they will have a smaller real estate footprint in the future. As a percentage, more Millennials will work remotely as compared to previous generations. This is in keeping with the technical expertise I mentioned above.
This is catastrophic for commercial real estate holders. A key point that was mentioned in the video was Blackrock buying a property in 2016 for $52 million. It just dumped the San Francisco property for half that amount.
We can expect more of this.
What we are dealing with is some of the most expensive commercial real estate in the world. While major US cities might be deteriorating, the losses associated with these properties are going to be staggering.
This is disruption in action.
The Future
I feel certain in claiming this is the future of work, at least for many people. While we are not going to see 100% of the people working in this fashion, it will be a significant portion of the population. The expansion of digital, especially when networks become abundant, is going to accelerate this trend.
Like any disruption, there are a lot of casualties. We are likely to see a great deal more automation which will further enhance the impact. Office space likely was overbuilt in many areas, meaning that it will end up being vacant.
We have shown this before:
The top 10 US cities occupancy rate for commercial real estate has basically flatlined for the past year. For all the news stories about employees returning to the office, in the major cities, this is not the case.
How can you run a building that is half full? The answer is, if you are Blackrock, you cannot. This is why you dump it for half of what you paid for it. Get out of the deal and move on.
We will likely see more of this. It is only going to get worse as more Boomers leave the workforce and Millennials step in their place.
It is all part of the evolution of technology and few are more technologically advanced, as a generation, than the Millennials. It is best to see the world through their eyes since they will be the ones in control in the next 10-15 years.
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I really hope I can find a lucrative remote work which pays lots of money most probably from a place like the USA because what I am sensing from your post in the future there might be huge employment opportunities for people like me who are from Pakistan from the rest of the world really especailly the tier 1 countries.
My view is people will eventually leave the higher priced countries for those with a lower cost of living. This is tied the globalization of real estate.
Here is how I laid it out a couple years ago.
https://inleo.io/@taskmaster4450le/the-layout-for-the-globalization-of-real-estate
I will check your post out as it seems an interesting analogy.
I tell people that I work with and meet all the time if it comes up, RTO mandates are completely just commercial real estate companies crying and begging to the companies to get them to bring people back into the office. Most offices are deserted, mostly just older people working in them. The “face time” generation.
I worked in an office for quite a while and it absolutely had its benefits. If I could I would work in an office again full time. The HUGE caveat is that said office needs to be 5-10 minutes from my house. If it’s not that close I’m not going to go. Most offices are located in expensive ass places so I likely won’t be opting in for full time office work for a long time, if ever again. Remote work is far superior on many levels, the only thing you don’t get is the random chances to chat with colleagues.
There are some downsides without a doubt. However, for most, the benefits outweigh the costs.
I would say an interesting observation: the ones who are in the office are older...and going to be retiring over the next 10 years.
I know Contra is paying freelancers in crypto, but they do KYC. Do you know any other? I am currently jobless and I'd like to work online but be paid in crypto on a platform....thanks if you got this info and can share it.
No idea.
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Remote work is a key pillar on the future of work. I think the trade-offs between office work and remote work is gradually tipping in favour of remote work, as technological evolution progresses.
Technology does seem to keep advancing. I think that is a piece we can all count on.
I've always been a bit on the fence about the generation I belong to. Born in 1980, I'm right at the youngest end of Gen X or at the very oldest end of the millennials. Oftentimes, I don't really feel accepted or a part of either generation. While I have a strong grasp of technology credited to my love of programming and early forays into PASCAL and C++, I also fondly remember graduating high school before cell phones were widespread, high-speed internet was not yet a fixture in homes (dial-up was the norm), and social media was basically just AOL and instant messenger.
I've heard the term Xennial thrown around a bit, so for the few others in the years btwn 1978-1982, I think that is a rather apt description.
As for the office space issues, I see the commercial real estate bubble all around me here in New York City. My father is a commercial real estate attorney. He has been incredibly busy as many of the 5-year terms from before the pandemic are nearing completion and nobody is renewing.
Residential redevelopment is barely a viable plan since in most cases it might just be more economical to tear down and build from scratch rather than try and retrofit condos into office buildings. Things are going to get ugly over the next few years in the commercial real estate sector. Hopefully the mid-market banks holding all this paper are preparing for the crash early, because the writing is on the wall! We already saw what happened to signature bank, and I think many others will have a similar plight.
What you state is true for all generations. Those who are baby boomers but were both in the early 60s identify more with Gen X than Boomers.
Few seem to realize this.
Maybe outside the cities, they don't, but I can tell you the issue is front-of-mind here in NYC. There will be a reckoning, and soon! Not just for all the landlords sitting on empty office space, but also for the countless businesses and livelihoods that are based on people commuting into offices daily. There are so many shops that just be able to continue to survive in a world with 40% office occupancy. It seems like the only people "winning" are the food delivery apps as less and less people leave their apartments to brave the harsh conditions of barren city streets that used to me teeming with life!