There is an axiom in the technology sector, known as Amara’s law, which states that the short term impact of a new technology will typically be overestimated while the long term impact is usually underestimated. This is particularly true when considering the impact the internet was expected to have on where people choose to live. During the 1990s dot-com boom, increasing access to the internet was expected to make geography matter less—with goods, services and even work becoming accessible through the internet, the differences between regions, countries, cities and rural areas were expected to shrink. Thomas Friedman’s bestseller The World is Flat popularized this idea even further. But the acceleration in job and population growth in many major U.S. cities over the past two decades has caused a number of demographers and economists to question the initial assumption that the internet would be a “great leveller”. In fact, in a digital economy, the growth in jobs and population has appeared to be more concentrated than ever in a few large metro areas.
Source: Oregon Office of Economic Analysis, BLS data
However, Census Bureau data released in December shows some signs that the internet may be entering the second stage of Amara’s law where the places Americans chose to live are becoming less connected to where their employer is based. In the last three years that Census data is available (2015-2018), the number of Americans who primarily telecommute (working from home) rose by over 1.6 million, after increasing by less than 1.5 million between 2000 and 2010. If Virginians who primarily worked at home were grouped together as an industry, it would easily be Virginia’s fastest growing industry, increasing by 43 percent since 2010. As of 2018, about 6 percent, or nearly a quarter of a million Virginians, worked from home, a little less than the share of Virginians who worked in manufacturing (7 percent). Read Full Article →