Rethinking public policy to embrace 21st century working

Rethinking public policy to embrace 21st century working

This is the third of three linked articles examining the implications of the emerging world of work and the need to harness potential benefits from reducing the separation of work from the rest of life that characterised the Industrial Era.

The first article: The new social infrastructure of work 
The second article: What are homes for in the 21st century? 

Embracing the future of work positively

Most of the articles I read about the “future of work” focus on the impacts, for good or ill, on life, jobs, workplaces and working practices. They tend to start from where we are now and ponder the impacts of an incoming tide.

Instead, I want to take as a starting point: “What would be a good outcome for society, or at least the best direction of travel?” Looking at the issues this way, we can start to think about how we might embrace the potential benefits by channelling change in positive directions.

However, we won’t be able to harness those benefits unless as societies we challenge and completely rethink key aspects of public policy.

Too much policy thinking is still based on unquestioned assumptions from the industrial era about the place of work in society as a whole. We need to get beyond gently tweaking yesterday’s policies and instead think strategically for the longer term.

In the end, we either let the future happen to us, or we attempt to shape the future to what we think is desirable.

So, where do we want to go?

The following are aims for a future society that I believe would have wide support, and which can embrace current and emerging changes to the nature of work:

  • Realign economic activity in the context of increased automation, artificial intelligence and robotics, so people can keep earning a living
  • Enable work to be carried out with reduced environmental costs
  • Enable more work to be carried out locally, and rebuilding local economies
  • Reduce the need to commute
  • Support greater flexibility in our careers over probably longer life-spans (e.g. flexing between periods of intensive and less intensive work; between employment and self-employment or starting a business; taking time to devote to caring or learning new skills)
  • Provide homes that support economic activity through all stages of life
  • Support opportunities for more meaningful work
  • Have the security to underpin greater choices in work and life
  • Embed greater resilience in the economy, so people can continue working at times of future disruption due to pandemics or other emergencies.

Unfortunately, current policies and the mindset lags involved stand in the way of delivering on these aims. We have to change, and fast.

What policies need to change?

There’s a range of policy areas where industrial assumptions are baked in, and which shape the ways we work and live. These include policies for economic development, planning, housing, infrastructure, transport, taxation, benefits, education and skills.

Economic development, enterprise and employment

Traditional approaches to economic development have relied heavily on large inward investment opportunities, for example a major company setting up a factory in an area, or relocating a headquarters function. Big premises, lots of jobs for local people.

In developed economies these have become fewer and fewer already, and the decline in such opportunities will continue. There are two main reasons for this:

  • Industrial work becoming increasingly automated. There may be a big factory or warehouse, but there will be far fewer people working in it
  • Many kinds of work have become much more footloose, and can be carried out without the huge investments in centralised premises.

In fact, the whole premises-based approach to economic development needs completely rethinking. It operates at smaller scales too. Start-ups moving into bigger premises with more employees is traditionally taken as a sign of success. Sometimes local authorities are heavily invested in providing the spaces for growing companies to rent. But all the signs are that growing companies are wisely cautious about taking on premises as long-term fixed overheads. The people they work with as they expand often don’t need to come into a central workplace every day.

So the biggest trend in commercial property over the past five years has been towards coworking spaces. These provide the opportunity to have premises as a variable rather than a fixed cost, for use as-needed. And we’ve witnessed through the past year the increased importance of the home as a centre of economic activity.

Growing the number of employees is also traditionally taken as the main indicator of a successful company. Of course this is self-evidently one useful measure – but increasingly it’s not the only one. Having networks of contractors and freelancers is also a big part of the story. It’s about hiring in those specialist skills when you need them.

This is in part about the so-called gig economy, but it’s also about the changing nature of work where many processes, including medium and high-level professional tasks, are automated and a company doesn’t need the permanent resource on the payroll. In this context it’s important to think through the opportunities for people who can provide the required skills as a service, whether on a freelance basis or as a company providing an agreed level of service and developing a new market.

The future world we are looking at will not naturally depend on the same model of employment we became used to in the industrial era. Attempts to force people into those traditional employment structures through legislation or creating state-run industries to provide secure work will stifle enterprise and innovation, be anti-competitive as well as extremely expensive, and are pretty much doomed to failure in the new world of work. Those are recipes for resisting the future, rather than embracing it.

What we need instead is economic policy that:

  • Recognises the home as a centre of economic activity and enterprise and actively supports the development of home-based businesses
  • Promotes self-employment and freelancing, especially in areas that have experienced deindustrialisation and areas where self-employment is low, rather than relying on large inward investment opportunities that probably will never happen
  • Welcomes and supports the establishment of coworking centres to support local economic growth, providing facilities for businesses without separate business premises
  • Takes an approach to calculating business growth that recognises the value generated by networks of individuals and small businesses, not only the number of employees in a company or the amount of space they occupy.

These policies also depend on the practical measures in other policy areas such as housing, planning, infrastructure, transport, taxation, social security and education.

Housing

Recognising the home as a centre of economic activity has profound implications for housing policy. In the UK there are plans to build three million homes over ten years. Debate focuses on how many, how are they to be funded, the amount of social housing, and where they should be located. The needs of the occupants to work there are very rarely addressed, though this need should now be crystal clear due to recent events.

The average size of homes in the UK has declined enormously over the past four decades. Research by LABS Warranty found that houses built in 2018 are 19% smaller than those built in 1970. That’s down from 83.3 m2 to 67.8 m2. In London, with its higher proportion of apartments, it’s 55 m2 currently. (The same is not true in all countries, but it is a common trend, especially where residential land values are high.) This is a trend that has to be reversed if homes are truly to become more multi-functional.

Our post What are homes for in the 21st Century? explores the requirements for 21st century homes in terms of design and facilities. Here we’re looking at how policy needs to change to support extensive home-based employment and enterprise.

Essentials for future housing are policies that:

  • Actively support the use of homes for employed work and running small-scale businesses
  • Set minimum standards for different categories of workspace in and/or adjoined to dwellings
  • Require developers to include spaces suitable for work in new build homes, with appropriate levels of physical and acoustic separation
  • Require landlords, including social landlords, to allow home-based work provided it is of nature that does not harm the welfare of other occupants or the amenity of neighbours
  • Rethink any housing (or housing-related) policies that have the effect of penalising having additional rooms (like the so-called “bedroom tax”, or seeking to move social tenants into smaller units if a bedroom becomes unused)
  • Recognise the need to provide suitable work space in retirement villages and sheltered housing, as people are living and working longer
  • Link this support for domestic economic activity to policies for “lifetime homes”, i.e. ones that have the flexibility to adapt to changes in circumstances, needs and aspirations through a lifetime.

Planning

This all means a different approach to strategic and land use planning. The default separation of homes and work should be ended.

As the boundaries between home and work become blurred, planners can sometimes tie themselves in knots trying to maintain that traditional separation, e.g. by specifying only certain kinds of work can take place there, or refusing to allow live/work development on designated employment land, even though a cluster of home-based businesses might create more jobs than a modern warehouse, for example. One London borough went as far as seeking to prevent families occupying live/work space in their planning policies. How that would be enforced should one of the occupants dare to become pregnant is not specified!

Future planning policy should:

  • Rethink assumptions that relate the numbers of people employed to traditional categories of land use
  • Take a flexible approach to work uses in or alongside residential space. Rather than having bureaucratic restrictions on the work use, apply a nuisance/hazard/amenity test to prevent un-neighbourly uses
  • Allocate a significant proportion of homes in new developments to be workhomes, with a range of different designs and facilities to support different kinds of businesses. This should include some homes with sufficient space for occupants to run businesses where they can receive visitors and/or employ a limited number of employees, and to supply local services to residents
  • Support workhomes with shop fronts as a key element of policies to enhance and revive high streets
  • Support space for workhubs/coworking centres as a key part of the mix in local centres
  • Adopt smarter approaches to housing density as current approaches to high density with ever smaller units and room sizes are at odds with the changing nature of work
  • Recognise that homes designed for working need to be larger on average than those that are purely residential
  • Take account of the home and, where applicable, the garden as spaces for economic activity and self-sufficiency
  • Require developers to provide facilities that support working, and to ensure the highest level of telecommunications infrastructure is deployed in new developments
  • Ensure home-based work and local coworking are central to schemes promoting walkable or “15 minute” neighbourhoods
  • Support a mix of home-based working and service provision as a key element of regeneration strategies, to provide a dynamic mix for local economic activity and growth.

Infrastructure

The emerging world of work requires excellent communications infrastructure. That means rolling out ubiquitous, superfast broadband and mobile telecommunications. This may be expensive, but it is not as expensive as building physical transport infrastructure such as motorways and high-speed rail. This technology infrastructure carries economic activity and innovation in a very direct and efficient way.

Policy for infrastructure should:

  • Require universal fast fibre to the home
  • Recognise home users are producers as well as consumers – so upload bandwidth needs to be much greater than is currently the norm, and at affordable rates
  • Keep requirements and standards under review to provide the infrastructure for future bandwidth-hungry applications such as 3D telecommunications and holopresence, and rapid growth in the Internet of Things, which are as relevant for domestic environments as for workplaces and mobile assets
  • Eliminate “not-spots” of geographical mobile coverage, by requiring or incentivising providers to ensure work can be truly, and frictionlessly, mobile
  • Take a strategic approach to the social infrastructure of work, embedding the spaces and technologies for work in public spaces and public transport.

Transport

There have been various initiatives in the past to reduce travel by encouraging remote work, as in the UK’s Alternatives to Transport programme, which encouraged remote working during the London Olympics. These kinds of initiatives have tended to sit uncomfortably alongside other travel demand management initiatives. Typically, these aim to persuade people to change their mode of travel, rather than not to travel at all.

Carrying out activities without moving, when otherwise travel would have been needed, is referred to as “virtual mobility”. It encompasses remote working and virtual collaboration, plus online shopping and consumption of services that previously would have required a journey. There are diverse transport impacts (e.g. a rise in courier services), but overall there is a significant transport reduction – especially so with working at or near home.

  • The principles of virtual mobility should move to centre stage in transport policy
  • Home-based working should be promoted alongside the other most sustainable forms of travel, i.e. walking and cycling, in a hierarchy of sustainability that ranks these above public transport, taxis, car-sharing and finally private motor vehicles
  • Large-scale transport infrastructure projects should be weighed against what a comparable investment could achieve if supporting the infrastructure for virtual working and services
  • Transport planning assumptions and policies should be reviewed about the infrastructure needed for commuting, when the developments maximising home and local working reduce the need to commute.

Taxation, financial services and social security

The future of work is likely to be one where people have multi-stage and varied careers over longer lives, against a background of increasing task encroachment from automation, artificial intelligence and robotics.

This raises the prospect of people flexing in and out of employment, with periods of perhaps retraining, starting a business, or taking time out for caring or to carry out some other meaningful pursuit.

However, the structures of taxation, benefits and financial services (e.g. having a mortgage, contributing to pension schemes) are all based around the expectations of being continuously in employment. This is no longer fit for purpose in the emerging world of work.

One of the key issues here is of having financial security through periods of transition. For this reason, there are many advocates of a universal basic income (UBI) to give the security to meet basic needs in a time when certain kinds of work may become scarcer due to automation. There are many issues with UBI, not least its affordability and potential disincentives to working.

The approach we’re looking at here is based more around self-reliance, fostering enterprise, reskilling and self-actualisation through meaningful activity.

What are needed are approaches that support people while they make good choices at different stages of life. Currently benefits systems tend to require people to be actively seeking employee status in order to be eligible for benefits. This may not always be the right or the most practicable approach in the new world of work.

Business taxes based on land values (business rates) are also no longer fit for purpose. In fact, they have been dysfunctional and damaging to local businesses and services for some time now, with the advantage they give to online businesses over those with bricks-and-mortar premises. It has also been an obstacle for home-based businesses, with grey areas round business rates according to the proportion of space used for working. It is essentially unfair that a home-based business involving a workshop (e.g. for jewellery making) should attract business rates while a neighbour across the street running a knowledge-based business from a spare room is not taxed in the same way.

A range of policies need to be reviewed, including:

  • Taxation policies and regulations need to be reviewed to make it easier to move between spells of employment and self-employment
  • Business rates should be replaced, with businesses taxed on profits rather than the rateable value of land occupied
  • Regulators should require providers of financial services to develop new products that enable variations in payment terms, without penalties, according to changing income. A competitive market in such products needs to be incentivised.
  • Benefits and grants should be made available to individuals, to support periods of reskilling or developing new enterprises.

Education and skills

Education during the Industrial Era has generally been conceived as something that mostly takes place as an initial stage preceding a career. As the world changes rapidly and people both live longer and work for longer, there needs to be more focus on educational opportunities being available throughout the whole of a multi-stage career.

A key challenge when looking at education and training in mid or later career is that there is both a drop in income and costs to pay at the same time. And that often comes at a time when there is a mortgage to pay and the expenses of a growing family. Having access to training without its being an insurmountable financial burden is an essential part of a social framework to support flexibility in multi-stage working lives.

In explorations of the future of work, there is often a focus on the need for more opportunities to develop the technology skills and expertise to thrive in a world of AI and robotics. While this is correct, it is too narrow a focus. The retraining for which there is demand encompasses the growth areas of healthcare provision and education which provide increasing amounts of employment and self-employment, and all the areas in which people might want to realise their dream of setting up an enterprise. This might be in the creative industries (digital or otherwise) that are less susceptible to automation or any of the other more traditional areas operated from home.

One area of skills people are likely to need in launching their own enterprises are business skills, not least around marketing and selling online, including understanding all the platforms available for this, and managing all the administration and bureaucracy that goes with running a business.

New public policies for education and skills should:

  • Shift the focus on education and skills towards whole-life opportunities and access, rather than put so much emphasis on the 16-21 age group, and remove the expectation that skills gained at that stage of life will be sufficient to serve a lifetime career
  • Provide adequate funding for reskilling later in life, e.g. in the form of vouchers for a set amount of additional training, or perhaps providing a learning account that one can access at any point in one’s working life (e.g. free or subsidised entitlement to a specified amount of education)
  • Incentivise institutions and employers to develop courses appropriate for an increased number of more mature learners with appropriate credits for existing skills and experience.

Taking a holistic approach to embracing the new world of work

There are many interlinkages between the different areas of proposed policy change. The changes proposed to economic development, planning and housing are strongly connected, as are the changes proposed for taxation and benefits on the on hand and education and skills on the other.

So it is important to take a holistic approach, and avoiding approaching policies in separate silos.

These proposals don’t have all the answers – but I hope they can contribute to a meaningful conversation about what good looks like for 21st century working, and what needs to change so we can embrace the future of work to deliver positive benefits