In a remote work-from-home economy, nobody is more remote than others.
Maybe that’s good news for Maine, which has been penalized by its relatively remote location. If remote work takes off, as seems highly possible, Maine might see its competitive disadvantage greatly reduced.
It is too soon to know how the remote economy will develop, but the crisis provides an opportunity to promote it. The so-called New Economy might not equal the Industrial Revolution, but it could mark a historic change in economic life.
Two seemingly conflicting interests exist. Widespread concern about public health and personal risk has led to governments and individuals to reduce normal economic activity. At the same time, many people are anxious to return rapidly to their former life as soon as possible. The need to generate income through economic activity is undeniable.
Many states, including Maine, imposed tough protective measures, and now all states have begun loosening them. Governors have two goals: acquiescing in demands from some residents and allowing as much economic activity as seems prudent.
Some leaders, apparently including President Trump, motivated by unrealistic optimism and possible political advantage, advocate virtually complete relaxation of protective measures – opening the economy.
In states where relaxing protection has meant significant reopening, the number of cases has increased. The increase in Maine cases may be driven by better case reporting or outbreaks in group homes, but the effect of opening probably counts as well. The message is clearly that to reopen requires a new approach.
Businesses themselves have begun to move to the new economy. Companies like Facebook, Twitter and Shopify have announced that, after the crisis, they will continue to have many employees work from home.
The Wall Street Journal notes that many workers want to get back to the office, “but there will certainly be a growing class of workers who will never set foot in an office again, a profound change with unknown implications.”
Much work, even in an office, is carried out independently, but not all. Nobody will manufacture cars without people working together in a factory. Also, creativity can be stimulated by occasional face-to-face meetings.
The issue of social contact in not fully understood. Some observers claim that people need social contact, while other claim that the famous water cooler conversations are a waste of time. Zoom seems to be proving that electronics can go a long way as a face-to-face social substitute.
In the end, if many people worry about the health risks of viruses, their reluctance to return to crowded work spaces may be the key element in promoting remote work. More people will both work and shop from home.
The move away from the central workplace is certain to improve air quality and reduce wasteful commuting. Businesses’ costs of operation can be reduced.
Facing these obvious advantages is the natural unwillingness to change. Excuses will be found to resist it. Remember that people threw their wooden shoes, called sabots, into the machine gears to try to undermine the Industrial Revolution. The result: sabotage, but not success.
Federal and state governments can promote remote work to stimulate change as the economy emerges from the economic doldrums caused by the coronavirus.
Instead of merely sending survival money to unemployed Americans, Congress could adopt a modified version of the European approach. Many governments there subsidize companies to retain employees on the payroll, keeping down unemployment payments. The twist would be that this kind of aid would go only to companies creating remote work opportunities. This would transform public assistance into economic development.
With the economy essentially restarting using a significantly new design, Maine economic development could suffer less from the state’s remote location.
The state could seize what is called “first mover advantage” and, ahead of others, promote itself as the prime “remote work state.” The quality of life is well known and could be promoted as the ideal place for working from home. More young people could stay in the state or move to Maine.
Of course, the state would have come to terms with upgrading its electronic network to high-speed communication. It could also offer incentives to businesses that could assist remote work across the country, including by setting up training programs at the community colleges. Education could add a focus on remote work management.
Major national operations would no longer have to bypass Maine because of its location. Some will be looking to move operations from abroad back to the US. With lower costs than many other parts of the country, Maine could be attractive, especially if it gave itself a distinct economic identity, linked to the new economy.
Remote work is an inevitable part of the American economic future. It’s a part where Maine can be a key player.