Beware of white elephants
I believe there is a huge opportunity to reverse the depopulation and decline of rural towns and villages be they in Ireland, Italy or Idaho; but companies embracing remote work and governments investing truck loads of money in rural infrastructure are not the panacea they are billed as. In fact I would argue that they could end up being a dangerous distraction with scarce resources being wasted chasing remote workers and government grants in the belief that these will save the day.
Don’t get me wrong, I welcome these changes brought about by the pandemic, but there are a few key things that haven’t changed and we need to understand what that means.
Remote working is an opportunity, for now
Corporates look to deliver a healthy financial return to shareholders. That is a reality that has not changed. They therefore do not have a new found love for remote working due to some philanthropic enlightenment. It is simply based on the realisation that many of us can actually be productive from home, that it has the potential to save them money on office costs, and that talent might move to a competitor if remote working was no longer part of the deal. So what?
Well, I believe two things are destined to happen and in fact they already are. In the same way that companies offer a higher salary to someone doing the same job in London compared to Leeds, they will insist on a lower salary for those people that have moved from Dublin to Donegal. This over time will balance out the attractiveness of remote working and the economic impact remote workers’ incremental spending power will have on rural economies. The second thing is that companies now have systems in place that mean many of us can work anywhere in the world, literally anywhere. How long do you think it will be before they make the leap that if the person previously working in Berlin can now do the same job in Bad Münstereifel at 80% of the salary; they could move the role to someone in Bangladesh at 40%.
This is not a judgement on how companies operate. It is just the reality rural towns and villages need to face — remote working is a short to medium term blip; not a long term bonanza.
Beware the white elephants
Governments work to electoral cycles. That is a second reality that has not changed. It’s why politicians favour policies and announcements that get good news headlines and why so much of the investments announced of late focus on huge infrastructure spending and big numbers… funding that is red-ribbon-friendly. So what?
According to Investopedia a white elephant is…
“a burdensome asset, property, or investment whose cost of upkeep is not in line with its usefulness or value. The term derives from the old Thai custom of gifting rare, expensive-to-keep white elephants to the reigning monarch. Nowadays it is often associated with unprofitable real estate.”
…and I believe that, while there definitely is a need for infrastructure investment, the huge focus on it as a panacea and the top-down nature of how government deploys the investment, will lead to a stampede of white elephants. Case in point … the Irish government’s plans to develop a network of 400 remote working hubs. Once the red ribbons are cut and any seed funding runs out, how will local communities keep the doors open?
Again, not a judgement on how government works. It is just a reality that while infrastructure investment helps, it’s not the answer.
Megacities will continue to be magnetic
Young people will continue to flock towards the bright lights of the big city. That is a third thing that has not changed. London, New York, Berlin and the other megacities around the world will continue to draw in people, and where people go, money follows. So what?
Well it means that the magnetic draw of talent and capital away from rural towns and villages will restart once things open up, especially amongst the young, and with that, the hollowing out of rural towns and villages in Italy, France, Spain and elsewhere is set to continue. Perhaps families with younger children will stay back but longer term the depopulation issue hasn’t gone away.
Again, not a critique of young people being drawn to the bright lights. It is just the reality that, without an incredibly compelling reason to stay, towns and villages will loose talent and capital to the bigger cities around the world.
Specialisation is key
The fourth and final thing that hasn’t changed with the pandemic is that having a high concentration of companies and talent grouped together within a similar sector creates more opportunities for connections and success. This in turn draws in more companies, talent and capital, ultimately creating a virtuous circle. Think the film industry in LA, tech start-ups in Silicon Valley or the fashion houses of Paris.
So if rural towns and villages want to build a sustainable footing, a basis upon which they can properly attract and retain talent and capital longer term, they need to play to their strengths and specialise. Average simply won’t cut it. Standard hubs and start up programmes, talking about great schooling and good surf, or the usual tourism product and promotion are all nice, but unless they properly stand out they will be one of many and never compete.
Yes, figuring out what to specialise in and then doing that one thing really really well and on a continuous basis certainly isn’t straight forward… but it’s the reality of what rural towns and villages need to do to compete.
Now what?
So, based on all that, how can we build a sustainable footing for our local communities?
Well, first off I would forget about securing government funding or attracting remote workers for now. It’s the tail wagging the dog. Secondly I would accept the fact that you’re in a global race for talent, capital and share of mind, and that to win in that race you need to properly stand out.
Lastly, as I’ve mentioned before, I think what the team at the Innovation Collective is doing is well worth a look, and soon I’ll put something up about what we’re up to with Reeks District. Both approaches are similar in ways. The former is focused on enterprise, the latter on tourism. Both are about carefully mapping a locale’s strengths, using different ways to encourage and enable people to succeed, and securing private backing from savvy local investors to make it happen, which is all within reach of local communities everywhere. More on that soon.