COVID-19 and disruptive innovation
Does WFH prevent innovation? No. Instead, we are on the verge of a phase of disruptive innovation as new ways of working will also shape how and where we live
When German Labour Minister Hubertus Heil (Social Democrats) announced a “right to work from home” in January, employers’ associations went to the barricades.
One of the most powerful arguments against flexible working has always been that only personal interaction can generate innovation: Innovation is a social process and cannot be replaced by a screen, writes author Lars Vollmer. Germany can therefore not afford a home office.
A new entrepreneurial spirit
But can the theory that entrepreneurial innovation always requires personal communicaton be empirically proven? Doubts remain.
OECD figures show that the number of start-ups at the end of 2020 was significantly higher in many countries than before the pandemic. At first glance, this development does not seem very logical, because after the last economic crisis in 2008, the number of start-ups collapsed significantly. Financial Times editor John Thornhill, however, is convinced that “COVID entrepreneurs” are leading a new phase of creative destruction.
What explains this new entrepreneurial spirit?
In a blog post that I also contributed to, the digital policy association D64 describes how work has also always been a transmission belt for social change. It was the emergence of factories in the first Industrial Revolution that made the separation of home and workplace the norm. And it was during the second Industrial Revolution, when knowledge work could also be “scaled” for the first time, that the open-plan office was established.
The pandemic has made it clear that we are once again at a crossroads where we are fundamentally redefining work. Unlike during the second Industrial Revoution, when knowledge work was still tied to a physical medium — paper — work today is independent of time and place.
Companies like the digital event platform Hopin show that virtual collaboration can be just as productive as face-to-face exchange. Just two years after its founding, Hopin already had more than 1,000 employees in November 2021 — and works completely decentralized.
How we work shapes how we live
And because innovation today is no longer so strongly tied to specific places, we are facing a significant change in our society, our architecture, our mobility and our cities, equal only to 200 years ago, when industrialization created new metropolies. But while workers 200 years ago had to live where they found work, today we can work where we want to live. For cities and communities, this is a huge opportunity to reinvent themselves.
Incidentally, start-ups in Germany increased far less in 2020 than in other OECD countries such as France or the UK — perhaps because we have not yet recognized the fundamental change brought about by the pandemic and still believe that you need an office to start something new.
When Lars Vollmer writes that organizations that work from home are less innovative, this may be true for incremental innovation, where existing products are improved.
But even faster carriages could not have stopped the success of the car. Just as the car has not only improved but revolutionized mobility, the pandemic has opened up a phase of disruptive innovation in the true sense of Clayton Christensen’s theory, in which the course for our future is being set anew. And that is a good thing.
The original version of this post was published in German on my blog. This text was translated with the help of www.deepl.com/translator
