• Chris Hearld, Author |

Once the pandemic is behind us one of the key business legacies will doubtless be a dramatic sustained rise in working from home. This has the potential to benefit the country’s regional economies through a striking redrawing of the geographical limits on our labour markets.

The UK and its city regions will become effectively smaller and conversely, from a practical perspective, functional economic areas will get bigger. Access to opportunity and regional productivity will be boosted by an enlarged talent pool for employers and a greater commutable area for ambitious employees.

We may also see more diverse regional economies evolve as firms are able to establish new offerings, confident that that they will be able to attract the right skills without them being on their doorstep.

These outcomes will result from a change in our approach to being in the workplace, as a proportion of the workforce will commute less frequently in the long term.

In the North of England, which is home for me, a significant reason for the outcry about the state of public transport, particularly the railway and road network linking the West with the East, is that ineffective transport infrastructure has rendered a potentially strong and exciting pan Northern economy into smaller, sub scale, markets for talent and employment.

For many the prospect of a daily commute between, say, East of Leeds to West of Manchester represents too many hours of their lives and is altogether too grim, with congestion both by train and car, adding to the pain.

To be clear, this is unacceptable and Northern Powerhouse Rail in particular is still absolutely an economic necessity.

However, a significant number of people in business will be prepared to face commutes to their office that stretch further and take longer, on the basis they are undertaken, say, twice a week instead of five times.

Across the country’s regions this opens up opportunity for employers and talent to interact more widely, creating labour markets two or three times the previous size perhaps, stimulating a notable opportunity and productivity boost on the back of a more fruitful skills market.

It would be great to see an ambitious individual from Bradford pursuing an exciting next step in Liverpool, for example, progressing their career in a way that wasn’t possible by staying within their home’s city region. Or a business in Leeds struggling to recruit the skills they depend on to grow their operation from within their nearby labour market, meeting their needs with the perfect skills fit in the form of employee based in Newcastle.

A distinct, equally positive outcome stands to be a different boost for diversity of opportunity. As a working culture develops that is genuinely without a presenteeism focus, the existing trend to more inclusive workplaces will accelerate. Employees who (already) seek a flexible work pattern will be less visibly different within their business. This changed environment will influence their ability to pursue a successful career combined with non work commitments, achieving their goal of securing a rich and rewarding life both in and outside of work.

We can expect exciting growth in opportunity when these working pattern changes are repeated across the country given the resilience of the nation’s soft infrastructure - which, overall, seems to deserve a cheer for how it has stood up to the remote working switch.

The combination of a rocketing in the acceptance, even embracing, of working remotely with the proven capability of our digital network means that after many years of thinking the answer lay largely in, and was hindered by, the state of our physical connectivity, this crisis has pointed to digital infrastructure as being an even more critical part of the solution to regional productivity than previously thought.

We have much to get through in the short term, but I do see a productivity opportunity to come from this dreadful crisis.

If you would like to discuss any topic linked to regional economies please feel free to contact me or your local KPMG office senior partner.