Peter Thiel: ICT offers low cost, green solution to metro area transportation, housing challenges

Venture capitalist and PayPal founder Peter Thiel was recently interviewed on the Fox Business Network on the city of the future. Thiel talked about the two major shortcomings of today’s city as a situs for knowledge work concentrated in centralized metro commute-in offices: transportation and housing. Transportation systems – roads, highways and public transit – are “badly inadequate” in most metros, Thiel said, and housing costs are exorbitant. Both leave knowledge workers with two bad choices. “People need to have super long commutes or live in small apartments near the city centers where they have to spend all of their salaries on the apartments,” Thiel explained.

That’s where information and communications technology (ICT) can provide a workaround by allowing knowledge work to be dispersed outside of urban centers, according to Thiel. ICT solves the housing problem since it provides access to more affordable housing while at the same time eliminating the need for daily commute trips.

The idea isn’t new and has spawned years of debate despite the strong benefit in solving the housing and transportation challenge ever since Jack Nilles coined the term “telecommuting” in the 1970s. That debate continues to play out nearly two decades into the new century among organizations – ironically including ICT innovators like Yahoo, HP, Apple and IBM – that resist substituting ICT for transportation, fearing a geographically dispersed workforce won’t be as productive or collaborative as one co-located in a centralized, commute-in office setting. Thiel explains:

The ICT version (of transportation) people have talked about for decades is telecommuting. And so would there be some way so that you won’t need transportation at all, you could just do your work remotely. For a variety of reasons this has not worked over the last 30, 40 years people have been talking about it. The [perceived] problem generally is that people who work from their homes, they don’t work as hard. A lot of the value of work comes from talking to people in various ways.

However, Thiel notes management practices are changing to overcome those concerns that concentrate on managing the production and delivery of the work product. That focus necessarily forces a degree of diligence and collaboration to get the work done, he implies.

I think we’re starting to see more and more of this telecommuting in Silicon Valley and elsewhere where people are finding small teams of developers outside of Silicon Valley, there are ways to sort of bundle, put the work in certain packages that you allocate to different people. So I think maybe one of the end runs around the transportation system will be telecommuting. That’s a trend that’s underrated that’s worth exploring a lot more.

Rethinking knowledge work

Bosses acknowledge that remote workers don’t suffer from productivity problems. Research has found telecommuters who can work outside normal office hours and don’t have to spend time commuting often are more productive than their cubicle-bound counterparts. Rather, managers want their teams within view and are willing to trade some efficiency for the serendipity that office-based conversations might yield.

Source: Working From Home? The Boss Wants You Back in the Office

Although information and communications technology (ICT) has eliminated the need to commute to an centralized, commuter office (CCO) every work day, many organizations stubbornly cling to the old paradigm out of habit even as peak hour traffic congestion grows and makes it less practical and inaccessible.

Diane Mulcahy notes executive and human resources professionals contend the CCO supports team-building, culture and collaboration. That’s likely true. But it comes at a terrible personal cost to staff member wellness and work satisfaction, not to mention the cost of maintaining CCOs. It’s not a good and sustainable tradeoff and it’s time to acknowledge that circumstance.

Silicon Valley ICT companies adhere to the CCO model, building huge, high dollar corporate campuses and busing staff there daily from San Francisco over jammed freeways. In the larger scheme, to solve this problem requires rethinking knowledge work. To what extent does it have to be done face to face and what can be done without staff being co-located? If team members must be in close daily proximity over the course of a project, a brainstorming session or an agile sprint, might that be done on a temporary basis with team members housed in close proximity so they don’t have to commute? In this framework, the CCO is replaced by a conference or meeting facility, with knowledge workers spending most of their time working in their communities in home offices or satellite or co-working spaces.

The solution to traffic congestion has to come from the demand side since adding more freeway lanes or smart vehicles isn’t the answer. That will require knowledge and information economy organizations to rethink how they manage and allocate resources.

One Thing Silicon Valley Can’t Seem to Fix – The New York Times

The built environment of the Valley does not reflect the innovation that’s driving the region’s stratospheric growth; it looks instead like the 1950s. Looking at aerial views of midcentury campuses like the Eero Saarinen-designed Bell Labs next to contemporary ones like Apple, it’s nearly impossible to tell the midcentury structures from the 21st-century ones. Designing job centers this way contributes mightily to the region’s ever-worsening traffic. If you found yourself stuck on Highway 101 between San Francisco and San Jose, you’d really see what Silicon Valley looks like for many. Building campuses on isolated suburban tracts guarantees long commutes, and this is one of the worst in the country.

Source: One Thing Silicon Valley Can’t Seem to Fix – The New York Times

Kudos to Allison Arieff of The New York Times for raising this issue as I have many times in this space. I’ve also noted the irony that Silicon Valley’s legendary information and communications technology (ICT) innovation has effectively obsoleted the 1950s centralized, commute-in office (CCO), yet the region remains mired in commute traffic.

As Silicon Valley tech pioneer Bill Davidow pointed out in his 2011 book Overconnected, those office complexes came about because the “killer app” of the 1950s was a combination of pavement (freeways), cheap gasoline and the automobile that made it possible to work in another location far from home. Now ICT allows knowledge work to be done anywhere, eliminating the need to move bodies over highways every work day to CCOs. That’s a real killer app for our time to slay commute traffic congestion — in Silicon Valley and other metro areas.

The centralized commuter office as tech corporate edifice

It is not the only technology company erecting a shrine to itself. Apple’s employees have just begun moving into their new headquarters in Cupertino, some 70 kilometres away, which was conceived by the firm’s late founder, Steve Jobs. The four-storey, circular building looks like the dial of an iPod (or a doughnut) and is the same size as the Pentagon. At a price tag of around $5bn, it will be the most expensive corporate headquarters ever constructed. Throughout San Francisco and Silicon Valley, cash-rich technology firms have built or are erecting bold, futuristic headquarters that convey their brands to employees and customers.

Source: Technology firms and the office of the future

This is richly ironic. These tech firms have decentralized knowledge work and obsoleted the daily commute to the office with hardware, software and apps that make performing knowledge work location independent. Yet they continue to build gleaming office complexes as corporate edifices that communicate economic power and success like their 20th century Industrial Age predecessors. Consequently, it’s no coincidence that the San Francisco-Silicon Valley area needlessly suffers from a 20th century malady — horrible commute traffic congestion — that grows worse in the 21st.

The continuing commuting paradox of the S.F. Bay Area, stuck in the 20th Century

Eighty percent of jobs in the Bay Area are concentrated in suburban fringes with little access to regional rail, and three-quarters of Bay Area workers drive alone to work as a result, the study’s authors note.The report highlights a seeming irony: Despite pioneering innovations in their products and work spaces, they house their lava lamps and free cafes in suburban corporate campuses with seas of parking lots. It’s a form of office that took shape in the middle of the 20th century. Google, Apple and Facebook’s offices are all more than 3 miles from the nearest rail station.This isn’t going to be good for the companies’ economic vitality in the long run, said Allison Arieff, SPUR’s editorial director. “Something’s gotta give.”

Source: Study calls on big tech companies to move closer to transit – San Francisco Chronicle

The paradox of the San Francisco Bay Area continues. The Chronicle’s Nicholas Cheng points out the irony of companies that innovated information and communications technology (ICT) advances that have made the centralized, commute-in office spaces of the previous century all but obsolete, yet continue to cling to the outdated pattern. And as SPUR’s Allison Arieff says, the current state of affairs is unsustainable. There is only so much real estate, highway lanes, parking spaces and public transit capacity to work with. ICT provides far more capacity to move the products of knowledge and information work than transportation infrastructure can to move bodies every work day.

Plumbing the paradox of Silicon Valley: Where culture trumps ICT

silicon-valley

The late management master Peter Drucker’s perhaps most quoted aphorism is “culture eats strategy for breakfast.” In California’s Silicon Valley, culture makes a daily meal of a key benefit of its products and services: information and communication technologies (ICT) that decentralize and make knowledge work – now the essential activity of Silicon Valley with most if not all manufacturing done outside of the area – location independent.

As a geographical location, Silicon Valley has effectively obsoleted itself but doesn’t know it yet or simply cannot accept it. There are a couple of reasons why Silicon Valley remains defined by location even though for much of the world, Silicon Valley connotes ICT innovation rather than a spot on Google Earth.

First is its founding in the 1960s. Intel made microprocessors there. Hewlett Packard manufactured test instruments and minicomputers in Silicon Valley. Late in the following decade, Apple Computer got its start there. These companies all predated the information economy even though their products would later give rise to it as the 20th century drew to a close. As manufacturers, their cultures are heavily based on the Industrial Age paradigm of commuting in daily to a centralized work location: the plant and the office.

That cultural touchstone combines with a second powerful element that reinforces daily commute trips to Silicon Valley companies: Stanford University. Stanford and Silicon Valley’s proximity to it was the academic component of Silicon Valley’s synergy of the early years that brought together academics and cutting edge engineers. Stanford lent Silicon Valley an academic, campus culture that remains in place today. Silicon Valley companies honor that culture by regarding their headquarters as “campuses.” Apple and Google have built enormous mega campuses that offer the amenities of the most modern college campus such as gyms, food service, and laundry facilities (but without the dorms).

The raison d’etre of the campus is another c-word: collaboration. Silicon Valley’s campus culture is strongly tied to the belief that collaboration can only truly occur on the campus in real time, face to face — much like graduate fellows discussing the latest theories of quantum mechanics. That discussion might produce an important breakthrough.

In 2012, Yahoo! CEO Marissa Mayer and Hewlett-Packard soon thereafter paid homage to the campus culture by ordering staff to report to the office daily and cease working from elsewhere. Enforcing the collaborative campus setting was the hoped for secret sauce to lift these companies fortunes during a challenging time in their histories. The campus culture combined with Silicon Valley’s Industrial Age roots also spawned the so-called “Google Bus” that transports staff back and forth daily between their homes in San Francisco and the corporate campus.

Even though the very ICT tools Silicon Valley brought to the world make collaboration possible anywhere and in real-time and non-real-time via voice, text and video, its Industrial Age roots and campus culture continue to define it today. But with it comes the huge and unnecessary cost of a time sucking commute and horrible traffic borne daily by Silicon Valley workers.

Silicon Valley — of all places — is suffering from future shock

Alvin Toffler, the recently deceased futurist who authored the bestselling book Future Shock, is credited with coining that term. As Toffler defined it, it’s the psychological reaction to too much change over a short period of time. The mind protects itself by effectively putting on blinders to block out the change it’s not yet ready to accommodate.

Not long after Future Shock was published in 1970, a Los Angeles aerospace engineer had a brainstorm while stuck in that city’s infamous traffic congestion. What if companies could set up satellite offices connected with data lines in communities where workers live so they can avoid getting on the freeway each workday, Jack Nilles thought. With that, Nilles conceived of a novel transportation demand technique — what he was to call “telecommuting” — to take the place of vehicular commuting to jobs that continues to plague L.A. and other large metro areas today. The idea didn’t catch on right away. Nilles attributed it to societal shock to the revolutionary notion that people could avoid commuting daily to an office distant from their home communities. After all, people “go to” work, don’t they? How could that be possible?

Today, nearly a half century later, that future shock not only continues but has intensified with the advances in information and communications technology (ICT). Many of those innovations were hatched in Silicon Valley and make it possible to perform knowledge work in the satellite offices envisioned by Nilles but also in home offices, libraries, coffeehouses and virtually anyplace with good Internet connectivity. Still, Silicon Valley companies like Google, Apple and Facebook continue to insist everyone show up at their corporate mega campuses each workday. The rationale is it’s necessary to have staff co-located in order to collaborate. It stems from Silicon Valley’s founding as a technology manufacturing center where people worked in “plants” operated by Hewlett Packard, Intel and Apple Computer.

That’s less the case now with nearly all manufacturing offshored and the aforementioned advances in ICT that facilitate both real time and non real time collaboration. Ideas can occur and be exchanged with colleagues whenever and wherever they germinate. The “everyone must be on campus in order to collaborate” rationalization is a symptom of future shock. Ironically manifesting in Silicon Valley of all places.

Facebook is considering opening a San Francisco office – Business Insider

Facebook is thinking about opening up an office in San Francisco, which would be a huge boon for employees who have been dreaming of an easier commute, the San Francisco Business Times reports, based on conversations with three real-estate sources.Most of the biggest tech companies in Silicon Valley, including Google, Apple, and Yahoo, have a smaller office in San Francisco, but Facebook has always decided to keep its Bay Area employees together at its huge Menlo Park headquarters.This decision has brought grief for city-based employees because the commute can take up to two hours with traffic, which can feel like “a soul-crushing waste of time” despite the Wi-Fi-enabled free shuttles.

Source: Facebook is considering opening a San Francisco office – Business Insider

As I’ve written, the San Francisco Bay Area suffers from enormous tension, caught between advances in information and communications technology — much of it innovated there — and its habit of clinging to the outdated, 20th century Industrial Age model of daily commuting to a centralized, commuter office. The tension is particularly acute in the Bay Area given it has some of America’s worst traffic congestion, generating a huge time suck on the personal lives of those who commute there.

Per this development, it appears the tension is beginning to ease as a large Silicon Valley tech company is reportedly looking to establish a satellite office in San Francisco in order to bring work closer to its staff rather than busing them daily like high school students. Facebook doesn’t even need to spend much on costly San Francisco office space since most of its staff can work from home offices and collaborate with colleagues and customers virtually. With the occasional in-person meeting at the old centralized commuter office to reinforce team bonds. Ideas can be shared 24/7 from anywhere. And in person collaboration isn’t necessary unless Vulcan-style mind melds are needed to better protect proprietary company information.

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S.F. Bay Area continues to struggle in transition from industrial to information economy amid choking traffic

“Beat L.A.” is a familiar refrain in Bay Area sports, but it now appears Northern California is on its way to being a rival for Southern California in an unwelcome fashion: traffic jams.Residents in the Bay Area have become discouraged about the heavy traffic in the region, with a dramatically expanding number of them indicating that traffic is worse than a year ago amid a huge surge in the local economy, a new poll released Friday by the Bay Area Council suggests.”Bay Area residents are frustrated about traffic,” said Ruth Bernstein, senior principal with EMC Research, a firm that conducts market and opinion research. “It’s harder for them to get around. We definitely are seeing a backlash against the economic boom.”

Source: Bay Area traffic ignites backlash against boom, new poll suggests – San Jose Mercury News

The crisis of too many cars deepens in the San Francisco Bay Area as does the paradox of one of the world’s leading information tech centers ushering in an information age economy still mired in Industrial Age rush hour commute traffic. Traffic that’s completely unnecessary given the information and communications technology Silicon Valley companies innovated that allows knowledge work to be done where people live. It’s a head scratching situation that makes one think the region is trapped in a time warp with the calendar reading 1966 instead of 2016.

Report: Housing costs, traffic congestion motivate workers to seek balance beyond Silicon Valley

In another sign that Silicon Valley isn’t as gilded as it once was, more tech workers want to leave, according to the Woo data. Almost 30 percent of Bay Area workers surveyed in the first quarter indicated they wanted to relocate, compared with 22 percent in the quarter before. New York was highest in demand.There are a number of growing tech hot spots outside Silicon Valley, May said, most of which have a lower cost of living. And that ties into the fact that people surveyed are putting a greater emphasis on work-life balance. “People are changing their priorities,” he said.There’s evidence the exodus away from Silicon Valley has started already. In 2014 more people left Silicon Valley than moved in, for the first time since 2011, according to a study by the Silicon Valley Competitiveness and Innovation Project. More than 7,500 residents hit the road, the study found. The researchers blamed quality of life issues such as skyrocketing housing prices and increasing traffic congestion.

Source: Tech workers lower salary expectations amid economic uncertainty – San Jose Mercury News

It’s time for Silicon Valley to progress to the Information Age — using the information and communications technology it innovated — and out of the Industrial Age model of centralized commuter offices and mega corporate campuses. This technology now allows information workers to do the same work they do in Silicon Valley in the cloud. That way, they can skip the daily commute and live where housing is more affordable.