by Ed West
Friday, 16
October 2020

The Dutch auction for WFH elites has begun

by Ed West
A Dutch auction for WFH elites has begun

Like the Black Death and the crisis of the late middle ages, Covid-19 hasn’t changed the world, it’s just aggravated already existing trends.

Take working from home, a trend linked to the increased mobility of the very richest and most highly-skilled. Perhaps the most important social and cultural fact of our age is that for the first time in history there really is a global elite with a single cultural worldview, a single language, educated in a relatively small number of educational institutions and concentrated in a few small sectors of the economy. The fact of their mobility defines them, and our age, because historically elites have been location-specific (which is why posh people have de or Von at the front of their names).

Members of this elite are highly-skilled and highly-valuable, and so competition for their services is now speeding up, like everything in this cursed year, not just among companies but but countries too: the UAE has just launched a drive to get people to work in Dubai remotely, using tax incentives.

There are huge benefits for the Emirates; even if they’re not drawing in tax from the individuals, smart people tend to attract other smart people, creating virtuous circles (and the reverse is true with a brain drain), and with it the benefits of agglomeration. A hundred smart people are more than ten times as productive, and rich, as ten smart people, which is why mega-cities have tended to increase their stranglehold on global economies. Covid-enforced WFH and the Zoom revolution has opened up the competition for where people working in London, New York and San Fransisco might live.

Dubai is not the first. Over the summer Barbados launched a similar scheme, encouraging Zoom workers to move to the tropical island and host their meetings by the beach.

In some ways this is nothing new. In the early modern period Britain, France, Prussia and Russia would compete to attract metallurgists, engineers and ironmongers, offering sweeteners to get them to move — but today the competition is far more intense.

This is great news for the very highly-skilled, wealthy and mobile, who benefit from various states offering a Dutch auction of taxes, but it’s perhaps not so good for the states themselves, their tax base, or the remainder of the population.

Indeed, we can see this dark side of mobility at its darkest with the Covid crisis finally hitting central and eastern Europe, where there is an acute shortage of medical staff. Some 43,000 doctors have left Romania since it joined the EU, and many, of course, have come to Britain, where their life-saving skills are appreciated — but it is a disaster for the home countries, and it is only going to get worse as global mobility accelerates.

Join the discussion

  • October 20, 2020
    I think you may have missed the point slightly re the 10 vs 100 statement. The OP isn't talking about the size of teams but the proximity of successful, clever people working together/apart/in competition. Regional taxation and investment is often based on creating or encouraging 'hubs' that are... Read more

  • October 19, 2020
    MH, thankyou for your kind words. The point you make about small, tight, high quality teams delivering faster and more coherent solutions compared with huge, sprawling middling quality teams is a truism known to anyone with a long engagement with IT. There is a classic book from the mid 70s by a... Read more

  • October 19, 2020
    Excellent post! I was going to comment on the statement in the article that "A hundred smart people are more than ten times as productive, and rich, as ten smart people" and this is a good place to attach it. Because in my experience (also IT) ten is around the right number to maximize... Read more

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