Fitzwilliam College 2025 (Land Economy)

Work-from-home schemes offer a seismic shift in the market, which all economists should agree is beneficiary. Free market advocates should appreciate the increased competitiveness of markets provided by the decrease in business costs through the removal of land as a necessity for business functions. Progressive economists should be in favour of the greater quality of life work-from-home schemes provide workers, and mixed-market economists should support the growth in availability of public goods (I.E, education) through improved communication channels, via remote support teams. All the while, private firms who benefit from the decrease in business costs, will also see great gain in the far larger labour pool they find at their disposal from remote workers and the longer working days available through cross time zone employment.

Many larger firms such as Amazon and Apple are rolling back their remote-work schemes, this makes sense for larger firms who have already footed the initial high-cost investment of purchasing and developing land for offices and other on-site locations, so would rather continue their use of on-site workers rather than cut their losses. However, remote-work offers a unique opportunity to vastly smaller firms, opening up a market entrance to prospecting businesses who otherwise would not be able to cover the high costs of setting up a physical office location, the price of which has risen by 44% since 20001, meaning that many would-be businesses never came to fruition as entrepreneurs fail to find the capital to afford land. The substantially lower barrier to entry offered by remote work, therefore, increases competitiveness in markets which has been shown to create more productive firms2 via low productivity businesses being outcompeted, leading to a Darwinian effect as the most productive firms survive. 

However, even large firms can benefit greatly from remote workers via cross time zone employment; employee productivity falls off massively during unsocial hours (hours outside of the traditional 9 to 5 work day) due to negative effects on employee wellbeing, therefore, firms wanting to offer 24-hour a day services are, traditionally, forced to take the hit to employee productivity or undertake excess costs in hiring extra employees or support systems to make up for the productivity loss. However, remote work, which can be offered globally (across time zones), provides sociable working hours, while maintaining a 24 hour work day; A branch in Perth could work from 1 AM until 9 AM (GMT), a traditional 9 - 5 shift, for the work to then be picked up at 9 AM - 5 PM (GMT) by a branch based out of London, the tail end of which can then be taken over by a team based out of Vancouver from 5 PM - 1 AM, after which the team in Perth can then take over again, all while maintaining a 9 am - 5 pm work day for all teams. The tripling of the work day for a firm, while maintaining healthy hours for employees to maintain productivity, allows firms to work at (theoretical) peak productivity constantly. While the ‘24-hour work day’ favours larger firms who have the means and resources to find employees overseas as well as the managerial efficiency to keep the workflow consistent, such as having the ability to hire small teams in time zones that overlap with the main 3, meaning smooth cross-team communications as the minor teams communicate messages between the main teams that are in incompatible time zones. Smaller individual ‘teams’ may find that they can benefit even further from this idea due to their smaller size and therefore less frictional communication channels.

With more and more people becoming connected to the internet (5.5 billion users as of 20244), online remote work widens the labour pool by an astronomical degree, not only in terms of allowing access to labour from foreign countries, but also by enabling the traditionally ‘disabled’. An employee survey at Gitlab5 found that 14% of its remote workers were legally disabled, with 83% of these only being able to work due to remote work arrangements; this can greatly boost firm productivity by providing firms with the opportunity to gain expertise from those that would be written off otherwise; this also adds an additional benefit in saving further costs as employers can bypass the need for disability arrangements in offices as the disabled work in their own home. 

Not only, as has been established, does remote work expand the labour pool, create more competitive markets and provide firms with longer working days; entirely new industries have arisen due to remote work. Duck Taped Studios is a co-operative of editors that grew grassroots from 1 remote working editor that slowly built up a team. Starting with just 1 youtuber, the co-operative now works with 4 individual youtubers across multiple channels with a total of 10+ editors. This unique youtube editing industry has grown entirely on its own, with almost all workers in the industry (every DTS employee included) working remotely; the founding editor (Markoni) being from Serbia worked initially with a youtuber from Germany, and now also works with channels from Sweden, Singapore and the US. While the international client base is interesting, the diversity of locations of employees exceeds this, with editors from the UK, Germany, Austria, Serbia, Brazil and Uzbekistan. Remote work, therefore, unequivocally provides new, alternative forms of employment and industry that otherwise would never have developed. 

The idea of remote work inefficiency does ring true to an extent; with fully remote teams initially showing higher productivity in the short run but struggling from burnout and lack of motivation in the long run, with productivity eventually crashing below in-house levels after 6 - 7 months. However, hybrid models of remote work have been shown to be more efficient in the long run, with the well-being boost of working from home mixing with the motivation boost of being in an office environment creating the perfect model for higher productivity levels. While hybrid models don't see the same 24-hour work day benefits (unless with larger firms, who can afford physical locations globally) nor do they lessen market entrance costs for small businesses, they provide a higher level of productivity across the board in comparison to both fully on-site and fully remote work arrangements. 

Hybrid work, it can be established then, provides a greater microeconomic benefit to firms from the higher employee productivity through greater wellbeing, this raised productivity extends the supply curve outwards and provides a greater quantity of output, this is further catalysed by the high elasticity of demand for internet services, which are the largest sector for remote workers. Fully remote work, on the other hand, provides a better macroeconomic benefit due to the greater competitiveness to markets from an expanded labour pool and reduced market entrance cost, leading to an overall more competitive macroeconomic market, additionally offering cost-cutting in the form of reducing office-hours allowing services to be sold at a greater profit margin, providing the opportunity to reduce the price level of their services and undercut industry rivals, raising firm’s quantity of services sold; firms will also benefit from the lower wages of overseas workers further allowing them to decrease their price level, as well as vastly expanding SRAS of the economy as the labour pool expands massively.