Source: Bloomberg.
I’ve been seeing this for years. In Los Angeles or more regionally, Southern California, sits Hollywood. For more than 100 years, it is the entertainment capital of the world. Here sit many iconic Hollywood studios that have entertained the globe for decades. As the cost of filming in Los Angeles skyrocketed, other cities like Vancouver, Atlanta, and other regions around the world becomes more attractive. I have thought about how Hollywood can still be called “Hollywood” when it is really spread around the world.
This is the same situation for other capitals or hubs of other industries. New York, London, Hong Kong, and a couple of others places bankers and investors go to make deals happen. Even before the on going Covid-19 pandemic that is more than two years old now, technology has made physical presence not as important as it once was. Prior to teleconferencing, telephone calls and emails had played a big part in deal making.
Hubs will not go way but there are things that are happening and will continue to trend that will forever change how we work. In major cities like San Francisco, New York, and Los Angeles where there is a high density of population due to many jobs that are created by their various industries, people automatically flock to them for employment. That is simply put but true. And the cost of living in these areas have risen dramatically for decades. Each year, lists of the most expensive cities to live in or the least affordable cities will have these three cities listed. And in 2021 with the skyrocketing inflation, Los Angeles is hitting my pocket book like a one-two punch and a couple of kicks to my stomach. That’s how bad it is.
If I could move out and still keep my job and work at home full-time, even in neighboring counties where housing is cheaper, I would seriously consider it. Even neighboring states where I can buy a house that is three to four times bigger than my current place for the same price. I’d settle for the same size that is much cheaper. I don’t need a big place.
And guess what? That is exactly what is happening for thousands of workers who can work away from Silcon Valley or Wall Street. Nodes of these industries are popping up all over the country, the world in fact, that due to costs, flexibility from social and technological changes, and how we perceive work in general.
If we could be a fly on the walls of boardrooms all over the world, we would probably not hear a lot of talk about building multibillion headquarters like the one Apple built in Cupertino. What use is such an expensive modern edifice if many of those workers are happily and quite productively working in their PJ at home or a mountain cabin they rented for a week on AirBNB?
Sure, CEO and the executives of major corporations are not expected to work from their home. They have to go to an office. So, corporate headquarters will continue to exist and employ disproportionately larger number of employees. Not everyone will want to work at home or have the option to work remotely. Technicians, researchers, and workers who needs physical machines to do their jobs quickly time to mind as employees who need places to work in.
Companies are quickly realizing this and will adapt as quickly as they can. Failure to keep up can mean loss of employees, revenues, and productivity. As a manager, the most important things to me will be my people and their ability to do their jobs. What do I care if they work the equivalent of a week’s work in 3-4 days when it is finished on time. One might be one office away from me while another is chilling in the Bahama and still able to do the work I expect of him or her.
The Bloomberg article linked above does not go into these examples and the train of thoughts I’ve gone into but it is what has lead me to write about it here. One additional thought that I have had is how this will change the relationship between employer and employee. I work for an old-school employers who care about this employees. I cannot say that is the same for many of my friends who work in other companies or agencies. They are a means to an end and employees, judging by the large number who have either change jobs or quit altogether, demonstrates that employees are treating employers the same.
And this will quicken the diminishment of business or technological hubs around the world, not just New York or San Francisco. This is a tide that will not reverse even after the pandemic is over. Too many of us have had the taste of working from anywhere while remaining productive, oh, and happier as well. Also expect regulations and others like market forces to follow suit.
In Los Angeles, Hollywood will always be here. But movies and TV shows will be made elsewhere but we will still have the bragging rights.
