COVID Killed The Office-Based Economy. What's Next?

Jonathan E

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“The best time to plant a tree was twenty years ago. The second best time is now.”— Chinese proverb

A seismic shift has taken place in the world of business and finance.

What has happened has been long-predicted, but much-delayed. I',m talking of course, about the demise of the last of the great bastions of Industrial Age thinking: the office construct.

It’s ironic that it took the deadliest pandemic in a century to finally demonstrate the fallacy of the idea that work can only happen in a purpose-built, dedicated building. Companies, individuals and the scribbling class have been trying to push the outdated idea of the office over the cliff and onto the trash-heap of history for 25 years now, but it hasn’t happened. Until now.

And by the way, there can be no doubt, at this point that, thanks to the pandemic, the office is dead. According to one Gallup poll, even back in April of last year, over 57% of respondents said they would prefer to never go back to the traditional office environment, and that number has skyrocketed since then. Remote work has become the norm for whole industries and sectors of the economy. What was once an oddity is now simply the way we do work. It’s not an exaggeration to say that what we are looking at is a paradigm shift unlike anything we’ve seen since the launch of the World Wide Web.

Just think about how much of the economy is built around, in support of, and responsive to, the idea of the vast majority of the workforce departing their homes and working in office buildings for a minimum of 40 hours per week. The travel industry, automotive industry, food services, banking, shopping, recreation, telecommunications, and entertainment are just a few of the sectors that have already lost trillions of dollars of business, and will continue to hemorrhage cash if the world doesn’t “go back to work.”

The same thing applies in government, education and infrastructure as well. Our whole system of living is designed around a 9–5 job in a place other than our homes.

What makes it so much more interesting to think about the future in a world with no (or at least, drastically fewer) offices is that, at least thus far, very few people have even noticed the shift happening. The fact is that we’ve all been so focused on surviving, both physically and financially, that we haven’t noticed the tectonic shift that has come about in the last six months. You can bet that once more people begin to realize what has actually happened, and realize exactly how ubiquitous the impacts are, we will see a wave of innovation and success that makes the Dot Com era look like a dot.

While it remains to be seen how long and how deep will be the economic recession that has resulted from the Covid-19 pandemic, what we can fairly say at this point is that the pandemic has revealed the underlying lie of the American office-worker: You don’t have to work in a cubicle miles from your home to be productive, or valuable, or efficient. In fact, the opposite is true for many people. And while there are certainly sectors of the economy that require dedicated work-space, the vast majority of white-collar office jobs, we now know, can be done outside the traditional office environment.

That fact has, as one author pointed out, created a massive downturn in numerous sectors of the economy. But, I would argue that it has also created new opportunities for business, investment, and growth in other, previously unappreciated areas.

Let’s not think that the economy is dying, just that it’s being selectively pruned. Old, dead ideas are being culled and new, invigorated ones are finally receiving the attention they deserve. And, within those previously-overlooked sectors, there are businesses waiting to bloom and opportunities for growth unlike anything we’ve seen in the last twenty years. Here are just a few of the areas that I expect will explode in the post-office-construct era:

  • Artificial intelligence
  • Virtual reality
  • Cloud-based collaboration services
  • Consumer Internet providers
  • Any and all home delivery services from groceries to lawn care
  • Real estate, as thousands of people relocate based on where they WANT to live, rather than where they HAVE to live for work.
  • Primary education
  • Telecom providers

And the list could go on and on. Meanwhile, here are a few areas that I see existentially threatened by the demise of the corporate office model:

  • The airlines
  • Commercial real estate
  • Food services
  • Automotive
  • Hospitality
  • Mass transit
  • College (K-12 has proven itself much more willing and able to adapt to the virtual environment than higher education…to its detriment. For more on that, read this excellent article)
  • Urban renewal initiatives
  • The oil industry

Each of these sectors has long been an essential part of the 9–5 office job lifestyle, but no longer.

When you think about it, now is probably the best time to begin investing in small business, startups and other disruptors in the economy, because the economy has been irrevocably disrupted and it’s unlikely to return to its previous models. The office construct that has formed the backbone of life in first world society is gone, and what will replace it has not yet fully been revealed. But, come what may, there’s only a few areas of the global economy that won’t be fundamentally altered in some way by the demise of the office. The savvy observer and investor should be primed and ready to make some big moves, because the work-world as we know it has been radically transformed.

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Active Duty Air Force Officer for 14+ years; Jonathan covers a wide variety of military-focused issues including leadership, personal development and budgeting and financial planning.

St. Louis, MO
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