Your phone is equipped with a video camera. Your laptop has a webcam. So if you’re currently flying to a business meeting, why?
It wasn’t long ago that videophones existed only in sci-fi movies, and it was widely assumed they would make business travel obsolete. “Distance is dead” was the cry of evangelists for communications technology.
But the truth is, business travel isn’t dying out at all. It took a knock in the recession, of course — but as confidence slowly returns, so too are the business travellers. Reports of the death of distance have been greatly exaggerated.
Perhaps today’s technology still isn’t good enough, and one day something like Cisco’s snazzy TelePresence rooms, of which only a few thousand yet exist, will eventually prove to be the killer app. Or maybe remote working has been hyped by media pundits, whose jobs lend themselves more than most people’s to working via WiFi from the poolside bar.
I think there’s a more profound and interesting explanation. The ‘distance is dead’ brigade assumed that business travel and communications technology are substitutes, like butter and margarine. If butter becomes more plentiful and cheap, we would expect people to cut back on marge.
But suppose instead they are complementary goods, like strawberries and cream. If strawberries are everywhere, it’s hardly puzzling that cream flies off the shelves as well. Harvard economist Ed Glaeser reckons that’s a more likely description of the relationship between communications technology and face-to-face meetings. They’re complements, like shoes and socks, not substitutes like gloves and mittens.
Glaeser’s idea has evidence on its side. In 2007, economists Neil Gandal, Charles King and Marshall Van Alstyne studied 125,000 emails and found that the most productive workers used email to communicate with their immediate cubicle neighbours. Email has greater value when it complements face-time, not replaces it.
Meanwhile academic economists Eric Zitzewitz and Justin Wolfers teamed up with Google’s Bob Cowgill for a fascinating analysis of Google’s in-house “prediction markets”. These are used in an attempt to capture the wisdom of crowds, asking employees to guess, for example, how many users would sign up to Google’s Gmail service this quarter.
Were employees more likely to make similar predictions if they worked for the same boss, or on the same project, or played poker together? Barely. But for employees who sit near each other, the correlation was striking. Even in a place such as Google, information flows more freely through face-to-face connections than via fibreoptic ones.
Far from replacing business travel, videoconferencing may help you forge connections that then require air travel to maintain. It seems that the phone in your pocket doesn’t make your business journey so mysterious after all.
Tim Harford is a Financial Times columnist and bestselling author of Dear Undercover Economist.
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