Throughout the last several decades, humanity, as a whole, has relied on economic and societal progress that stemmed from the long-lived industrial and later agricultural revolution. During the late 20th century, the transition to globalization, which was soon followed by digitization, helped reshape economic trade ships between countries and people.
In the ever-interconnected and hyper-digital world, born from our ingenuity during the last two centuries, we’re now being catapulted into a new phase of human development which many have coined The Great Dispersion.
A phase in which we are no longer reliant on globalization for remote workers and off-shore teams. A transition from relying on cheap imports shipped at great lengths from far eastern corners of the world.
The pandemic, considered to be the catalyst of change and transformation on a global scale, reshaped our value proposition completely. During the early months of the pandemic, as we anxiously awaited for lockdowns to end, we adapted and changed our habits to become more secular with our need to continue growing and advancing ourselves.
Corporate executives that denied employees the benefit of working from home swiftly adapted technological business models to keep the engines running. School classrooms and lecture halls went online seemingly overnight. Consumerism flourished as the growth of eCommerce and online retail shopping witnessed its biggest growth ever recorded.
The U.S. Census Bureau’s Annual Retail Trade Survey (ARTS) revealed that eCommerce sales grew by 43 percent in the first year of the pandemic in 2020. In dollar terms, sales grew from $571.2 billion in 2019 to more than $815.4 billion in 2020.
The pandemic caused seismic changes, advancing our technological economic activity by several years, and creating a paradigm shift in how people and businesses can remove unnecessary friction and costs by adopting a dispersion value structure.
People
While there is little evidence that can support de-globalization, we’re instead seeing the reorganization of the global economy as countries are shortening their supply chains and creating more diversified points of contact with their local markets.
Instead of eliminating globalization from our modern understanding, we’re gradually changing our activities to suit our basic needs more appropriately.
We already see this in how people live and work from home. Employees that can work remotely, either most of the time or permanently, spend less time commuting to the office each day. This not only allows them more time in their day but there’s also the financial benefit of saving on fuel and vehicle servicing.
Globally, the average commute time for employees is roughly 40 minutes one way. More alarmingly is the 330 hours per year the average American spends commuting to work annually. That equates to nearly two whole weeks spent driving to and from work.
Our cities, towns, and communities were designed around the automobile and people’s growing need to constantly move around from one place to another.
Now with the greatest need to move around – work and schooling – being done from home, we’re able to reshape our value proposition and start focusing on more important values such as mental health and family responsibilities.
A survey found that employees who work from home tend to be happier than their in-office peers, enjoying a 71.4 percent mental health rating compared to 65.3 percent of on-site workers.
Greater autonomy has enabled employees to have more flexibility in their daily schedules and allows parents to spend more quality time with their children. However, this has resulted in higher levels of burnout among some remote employees, as some employees are now working more hours per week than they did before the pandemic, with some parents even working weekends, according to the latest research.
While employees might be demanding better work-life balance from their employers, the long-term effects that can be associated with greater increased autonomy have resulted in a dispersion of teams scattered across several regions, countries, and time zones.
More in this, however, professor of marketing at New York University’s Stern School of Business and serial entrepreneur Scott Galloway, noticed how dispersion can often lead to bigger segregation among individuals in communities.
One of the studies Galloway quotes in his work reveals that white residents tend to be more welcoming towards other ethnic groups when the percentage of those groups increases. However, in more segregated communities, acceptance of ethnic groups decreased significantly as the population increased.
The problem with dispersion brought about the question of whether we’re becoming less empathetic at the same time. No longer are we needed to mix with our colleagues in the office that might stem from different ethnic backgrounds. We’re having fewer day-to-day interactions with our community as we’re driven by the growing need to be at home.
We’ve become simultaneously connected and disconnected, as the hyper-digital world no longer requires us to step outside and take up interactions with real people within our communities.
However, in the same vein of things, we can reshape the perspective of connection, allowing us to focus our attention on those valuable connections we’ve been overlooking.
Companies
Within the same argument that sees the great dispersion placing employees outside of the traditional office environment, businesses and companies have also endured great strides over the last several years.
The onset of increased remote working left employers and corporate executives concerned about whether or not employees will continue to be engaged and productive during ‘office hours.’
One study by Gallup in March 2022 found that employees reported being happier, more engaged, and less distracted when working from home. In return, these valuable attributes meant that employees had higher levels of productivity as several studies by WFH Research found.
At the same time, the office environment was undergoing major changes, and so did employee benefits. Research showed that more than half, around 54 percent of fully remote employees, said that they would look for work elsewhere if their work-from-home benefits were withdrawn after the pandemic.
The sentiment holds true to some extent. When Elon Musk issued a company-wide statement urging employees to return to the office, now that the severity of the pandemic was in the rearview, droves of employees resigned as a result thereof. The employee mindset had changed, but Musk’s corporate management structures didn’t.
However, when Musk issued employees to return to the office, labour market conditions were somewhat different than what they are now. Fortunately, this didn’t pause the development of dispersion within the workplace, as greater autonomy and digital connection have allowed employers to increase their talent pool, looking outside of their marketplace for employees.
Leveraging better dispersion means that employers can now hire across an array of talent pools, minimizing friction, and lowering employee-based expenses at the same time.
The office psychology that employers don’t allow employees to work from home because they don’t trust them reflected that employers cared less about their well-being and more about their output.
At a glance, this gave workers a true reflection of who their employers truly are, but it kickstarted a reshuffling in the labour market that witnessed droves of employees quitting as a result.
Among all the elaborate workplace trends born out of the pandemic, The Great Resignation was perhaps the most profound workplace revolution experienced in the 21st century.
At the height of The Great Resignation in 2021, more than 47 million American employees quit, representing 23% of the American workforce. In 2022, an additional 38 million more quit their jobs, according to the U.S. Bureau of Labor Statistics.
Not only did both employees and employers realize that the world of work had changed seemingly overnight, but what workers valued most had come into the spotlight.
No longer were employees eager to take up jobs that didn’t align with their values. Workers wanted to do jobs that made them believe they are making a difference and having an impact on their communities.
There was also a gradual change in how younger generations view their future potential employers. Conversations over environmental, social, and governance became a hot-button topic for younger workers, who sought out employers that aligned with their values.
Working parents, too, had their moment on the pedestal, bringing conversations of improved childcare benefits, flexibility, and autonomy to the discussion table.
Workplace trends such as The Great Resignation and Quiet Quitting showed the increasing belief that employers’ values didn’t align with that of their workers. Introducing more progressive workplace policies helped to shake up primitive business models that no longer served both workers and companies.
Beckoning for a soundboard to voice their concerns, employees regarded self-governing as more important and jumped ship, leaping to something that provides them with the work-life balance they’ve been looking for.
Certainly, we can’t deny that it can be easier to manage all employees under one roof; however, presenteeism isn’t the bane of performance and productivity. Employees have changed, and management hasn’t, which can create lasting effects on the macro scale in the long term.
Check out this video The Great Dispersion: Winners, Losers, and Why Things Will Never Return to Normal
Governments
It’s been a tumultuous three years since the onset of the pandemic, and as a result, we’re still holding our breath, hoping that the contagion of problems that have come as a result thereof will disperse in the wake of improving macroeconomic conditions.
At the start of the pandemic, major world economies sank borrowing rates to near zero, only reacting in the first half of last year with aggressive monetary tightening as central banks tried to extinguish piping-hot inflation.
Once governments realized the problem within their economic systems were more severe than what they could’ve predicted, they stopped working in unison.
In the U.S., the Federal Open Market Committee (FOMC) took aggressive steps to reduce its balance sheet.
Over in Europe, the 27-nation bloc embarked on a 681 billion Euro stimulus campaign to protect citizens and companies, with the European Central Bank later on starting to lift interest rates to bring inflation down to their target 2 percent rate.
Elsewhere in Japan, rapid inflationary conditions led authorities to retreat from the once-free money era and focus on rebalancing the economy while a war was erupting on the European continent for the first time since the Balkans.
Governments and agencies alike started tightening their belts and clearing their balance sheets faster than the financial crisis of 2008 and the flash crisis in 2010.
After three years of heightened uncertainty, bottlenecks in the supply chain started ripping through the world as China continued to close itself off from the rest of the world and impose stringent Zero-Covid policies that left advanced economies having to look at alternatives.
Over in Europe, countries found themselves against an impending energy crisis, as Western sanctions against the Kremlin since the invasion of Ukraine started piling up, but resulted in Russia closing the tap of gas exports to neighbouring nations.
Shortage in critical raw materials due to the war in Ukraine and blockades in eastern corners of the world left many governments realizing that the reliance they once believed to be impenetrable had now started to chip away at the very foundations of globalization.
Dispersion caused an inward reflection, leaving many to relieve their struggles by finding secular solutions.
In the United States, the introduction of the landmark Inflation Reduction Act (IRA) sought to uplift domestic energy production and manufacturing. More so, there’s a need to reduce carbon emissions, potentially by 40 percent by 2030, and help to open the floor for negotiating prescription drug prices under Medicare and the Affordable Care Act Program.
In Europe, central banks focussed their efforts on finding a singular workable solution for eye-watering inflation, but at the same time, European governments were called to pursue more ambitious fiscal strengthening within their current plans. Several governments introduced tax reduction policies to lower household energy bills, and subsidies to lighten the financial burden.
Even as countries retract, looking inward at their problems and focussing on how they can improve domestic issues through progressive monetary policies and tax changes, the macroeconomic fire continues to prevail.
The question, however, on everyone’s mind remains whether continuous monetary hikes and pumping the economy with stimulus cash will lead to the recession so often announced.
The resulting after-effects left governments realizing that the wood they’d been throwing on the economic fire for decades was starting to burn out faster than they could manage. Instead, this resulted in many governments reorganizing their fundamental approach to how they can be more complicit with the needs and overall well-being of citizens against the backdrop of more progressive and intuitive policies.
Final Thoughts
As we enter the next frontier of global and domestic economic activity, we start to realize how swiftly our human condition has changed within a matter of years.
While there comes a time and place for dispersion to be brought to the forefront, we’re earmarking the revolutionary transformation that was once considered a pipeline dream.
Now, at the very turning point, we can consider how our human ingenuity, drive for innovation, and the detrimental need for a swift turnaround led the age of globalization to release its foot from the pedal and give dispersion the chance to take the wheel.
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