Everyone’s opinion of what our world will look like and work like after it is safe to come out of our homes is worthy of consideration. The only thing that is certain is uncertainty. “The only constant in life is change,” opined Heraclitus; as true today as it was in 500 BCE. It is certain that life as we knew it will change even more in the months and years ahead as we try to reestablish our social and economic lives. Just how it will change is open to speculation. But the process for returning to ‘normal’ will take a long time and will embrace more than one solution. One size will not fit all. Comfort levels are personal, and our more heightened sense of personal and family safety (and mortality) is likely to create more job mobility and inform our choices about where and how we live. With this is likely to come additional healthcare reform.
Just as we expect the coronavirus to do next year, humans will need to evolve to survive. Indeed the ‘r-evolution’ has already begun. We have been forced to accelerate our learning curve on how to connect virtually…for business meetings, watercooler chats, afternoon coffee breaks, 5 O’clock Somewhere happy hours, and virtual late-night clubbing. It is likely that in the brave new working world, offices will be designed with physical distancing in mind while also being downsized to accommodate stints of working from home. What long term virtual behavior means for our work life is yet to be determined.
Pre-COVID, gross domestic product (GDP) in the United States across economic sectors shows that agriculture contributed 1%, industry (manufacturing/products) 19%, and the service sector (financial services/media/transportation/technology) 80%. Comparably, China’s sector GDP was 8%, 40%, and 52%, respectively. As a result of the pandemic, sector redistribution in the US will likely occur over the next decade. The early signs point to a more protectionist economy. Global supply chain interdependence will be realigned, and we will see a rise in the US manufacturing sector, most likely in advanced manufacturing, as controlled access to products will be seen as a national security issue. This is particularly front and center today in the medical and pharmaceutical industries. De-globalization will work itself into the economies of countries around the world in order to develop more self-reliance. Resilience planning will become a major policy exercise.
Solving for what all of this means for a particular metropolitan area or state will be different in each instance. National and international macro trends and impacts need to be incorporated into local, micro-level analysis of assets, aspirations, and ability to execute in order to determine an optimal regional economic development strategy for post-COVID-19 America. Also critical to a local strategy is the increasingly important role that regional innovation ecosystems will play in creating the future. Change, disruption, and pivots are familiar territory to creative entrepreneurs. Expect to see more entrepreneurial activity if there is healthcare reform that decouples health insurance from employers.
Crystal ball reflections should be coupled with knowledgeable advisory support to craft actionable plans that factor in local strengths and challenges in order to position a region to be nationally competitive when the economy turns around. The only thing that is certain is uncertainty; the only constant is change. It is how we are prepared to respond to the changes and disruptions of our local economies that will separate cities and regions when the starter’s gun is sounded at the gate. Now is the time to proactively prepare for what the new local normal is likely to be. Now is the time to formulate a plan to capitalize on opportunities when it is safe to emerge from our homes!
For example, corporate leaders are telling us they’re canceling real estate hunts for large downtown properties (in recognized tech hubs) and expect that a minimum of 30% of their workforce will be working from home. Office expansions are already moving away from a prime, single-headquarters building to smaller offices across the country. In short, companies are realizing that talent can work from anywhere.
Six of the top ten markets with the highest concentrations of software developers (with wages roughly 20% less than Silicon Valley) are in cities you wouldn’t normally think of. We’re looking at you, Kansas City, Detroit, Columbus, Minneapolis, Charlotte, and Salt Lake City. We’ve known for some time that Rise of the Rest is for real but it does seem here lately, that our time is truly on the horizon.