Smart working and south working.

A class of journalists who live with their minds in the nineteenth century cannot do anything but interpret things according to the paradigms of the nineteenth century, and when this nonsense spreads from the newspapers to the minds of readers, social disaster is almost assured.

I am referring to something I read in a newspaper, concerning " south working "

In itself it is an unmentionable boiata that seems written by an alabama slave keeper.

And it clearly shows how it is not understood what smart working is, which is confused with teleworking. But they are two different things, although both are based on the premise that the worker is not on site.

Let's try to understand what we are talking about. Work outsourcing and offshoring have existed (and are heavy market trends) for 25 years now. If the Milanese company X in question wanted to move production to Puglia, or to Prato, it just had to do a google search. The same is true for outsourcing and offshoring to foreign countries with a low cost of living.

those who fear that smart working is the beginning of outsourcing or offshoring, can rest assured. Both things have been around for 25 years now, and they didn't need smart working to be able to outsource work.

Has this outsourcing shifted value, wealth or development to emerging countries? Yes, but only in those where the government has been able to leverage this factor. Because'? Because obviously it is not a relationship between employer and employee, but an employment relationship between customer and supplier . Company A buying goods or services from Company B. And because companies are the biggest contributor to GDP, this has created development. So the governments that have been able to use the increase in GDP in their country to build infrastructure, fight corruption and thus attract other investments have gained. Other nations, which did not have this culture, did not gain from it and did not grow particularly well for it.

Well. But smart working is a different thing.

First of all, the relationship is what passes between employer and employee. That is an exclusive relationship. Everyone's bugbear is the Vietnamese who, working from the beach in Vietnam, becomes a "remote" worker in Milan is no longer an employee, he is a supplier. And it is because it has the contractual power of a NON-exclusive contract. Let's also leave out the trouble of going through legal proceedings against someone from Milan to Vietnam. But even if it were possible, this gentleman works in an office shared with others like him, and he faces all the crowdsourcing systems in the world. What does it mean? That the time you get angry and do the corporal, after two days you have a letter of dissolution of the contract, maybe he doesn't even give you all the work done, and bye bye. And you stay in the shit right at 75% of the project.

Crowdsourcing systems already existed, and companies weren't very enthusiastic about them. The worker who lives in a very low-income country can easily afford to stay 15 days without work to look for another one.

The problem of smart working of individuals in foreign countries is:

  • zero liability. They are not liable for the damage they do and a cause is impossible.
  • zero availability. They fire you at any moment and bye bye. They disappear.
  • quality zero. You have to hire quality experts to follow them one by one.

the requirement of smart working is that the employment relationship remains subordinate , that is, that the boy from Palermo who now works for the Milan company cannot send his employer to that country, he already lives with his parents and has a bearing . Before, if he sent the employer to that country he had to look for another house or move back to Palermo. Now he already lives in Palermo, has a roof over his head and parents who help him.

So it does not work: if he wants to dump the Milan company, an in-shore outsourcing is worthwhile, which at least guarantees him certain contractual conditions, delivery times and a liability that can be collected in an Italian court.

But let's go to the transfer of resources. Here the accounts do not add up. The boy who used to go to spend his 5 euro meal voucher every lunch in a hole in Milan now eats at home. But at home the same meal costs him 2 euros if he eats with his family.

What was missing? That "added value" was missing, the additional three euros he spent because he was in Milan. You will say that now the boy has that money in his pocket, and it is true, but in the end what can he do about it?

Because if we exclude the vegetables that you might buy from the gardener downstairs, the rest is an industrial product. Nothing changes if you buy it in a supermarket in Milan or Palermo, a packet of Pavesi biscuits always comes from the same place.

The story that automatically shifts wealth assumes that the entire layer of services shifts. So if you expect all the catering related to Happy Hour and "Ape" to move from Milan to Palermo, you must first chase the ENTIRE value chain, and understand whether or not the company that created the "Ape" exists in Palermo. ". And even if it existed, it would be necessary to investigate the underlying investment layer: do banks finance this type of activity? How much to Milan? Does the whole Lombard food supply chain exist in Palermo? And again: how long can it take to move?

Personally, but this would require a more in-depth study, the only type of catering that can follow a similar transformation is large-scale distribution. Very organized chains such as Mc Donald's, or others, have the power to follow such transformations in a few weeks or months. But if you tell me that thousands of commercial activities and a couple of distribution chains are about to start in Palermo, at the same time, in my opinion you are dreaming. It takes much longer.

In all this, however, we are forgetting that smart working is not teleworking. Teleworking is a technological tool that has as its objective the dismantling of the centralized infrastructure, with the relative cost savings.

smart working is a productivity tool.

It is a whole series of frameworks (agile / scrum, nexus, lean, complete digitalization and others) that aim to increase productivity. It means that after the transformation, companies are more productive than before, with the same staff.

But, beware: the companies have not moved. And since companies, not individuals who spend, generate most of the GDP, most of the GDP stays where it is. And if productivity increases, even more GDP stays where it is.

The difference, if anything, is the level of satisfaction: staying in the native country instead of forcibly emigrating is a happier condition. Avoiding 3 hours a day of commuting is clearly better. Eating with the diet you need and not with the one you find in the holes where you eat during your lunch break is certainly healthier. Maintaining social relationships, having more time for oneself, for sports, hobbies, family, is certainly a value. Personally I appreciate it very much.

But if you tell me that wealth has moved between Dusseldorf and Neandertal in teleworking, you are wrong. The digitization of EVERY company, which came with smartworking, allows me to order shopping online from a new METRO spinoff, so to speak. I always do my shopping in the same place, in fact. The value chain always ends in the same place. Maybe when I go out in the evening I go to a club instead of another? Maybe, but they are MINIMUM fractions of GDP.

It is necessary to realize once and for all that the GDP is not made by the consumption of individuals, but by companies.

This is an 80/20 ratio. The fact that the "20" moved to Palermo but the 80 remained in Milan did not change the balance sheet much, because in Palermo it is not consumed at zero kilometer. ADSL is paid for to a company in Rome or Milan, the car is bought from a foreign company, the snacks always come from Mulino Bianco, the pasta always comes from Barilla, etc., etc., etc. Either in Palermo there are supermarkets of things made only ever in Palermo, or of that 20% of the value that has moved, 15% returns to Milan.

But the city has some problems now. The first is that now, due to a fairly contained shift in GDP, it has to guarantee schools, clinics, services, waste disposal services, and everything else it guarantees to citizens, with a modest increase in GDP.

Milan could guarantee a service to the workers of the companies both for the taxes paid by the workers themselves, and for the taxes paid by the companies. But if the companies stay in Milan and the workers go to Palermo, Palermo has to cope with all this mass of citizens who live there, without also having the income of the companies they work for.

Someone told me that now these guys are getting married & having children, which they wouldn't have done in Milan. Well. For the municipality of Palermo this is very bad news. It means that it has to guarantee nurseries, elementary and middle schools, pediatricians, family doctors & co, to a whole layer of people who pay taxes, but without the taxes of the companies they work for .

Normally almost all municipalities have BOTH the income of workers and that of employers. For this they can provide EXPENSIVE services to the family and to the person, and services of almost very low cost to companies. But if people arrive WITHOUT companies, the problem becomes dramatic for the municipality: the budget of commuting has ALWAYS been terrible for the municipalities for this very reason. The company, the one that pays the meat, was not on site.

After all, it would be enough to observe the distribution of income to understand: with the current level of inequality, either the middle / upper class of Milan moves, or GDP moves very little. But the middle / upper class of Milan to live needs to live in Milan because of the need for social relations. He can't move from there. If the working class returns to Palermo, GDP moves very little, at least with the current distribution of wealth: if there are 400,000 millionaires in Italy , they are the ones who play the game.
If those do not move, and only the working class moves, taxes remain largely in Milan, while the needs for services (nursery schools, waste, etc.) move to Palermo. This is not good news for Palermo.

For this reason I DO NOT agree with the idea that smart working is AUTOMATICALLY an advantage for the south. It is an advantage for the workers of the south, of course, but not for the south as a whole, which will find itself burdened with services to be given to a young population, having only the crumbs of taxation (given that the companies have remained in Milan together with the induced).

It would be an advantage if Palermo now equipped itself with a well-funded business incubator, and tried to take advantage of the new human resources on site, pushing them to open companies on site. And here we always return to the subject of outsourcing: it has enriched only THOSE GOVERNMENTS who have been able to use it.

If we see it in terms of municipal budgets, in south working Milan has unloaded the fiscally negative part of the production chain (the workers) on Palermo, keeping the fiscally active part (the companies). Palermo received the minority part of the tax revenue, but must provide the majority of the services. Not a bargain for Palermo.

What does the sad spectacle of the empty streets of Milan mean?

Nothing. Smart working was an ongoing trend, so we would be there in 5-10 years anyway. The first wave of Covid has accentuated the thing by speeding it up by ten years, so the less elastic sectors (catering and real estate) have broken up. Correct. The second wave, if it comes as you think, (here in Germany it is cold before it is in your country, and we are seeing the signs sooner) will do even more and all the telcos are gearing up for scary forecasts. If the second wave is very serious and continues over time, the gardeners under the house will also have to digitize if they want to survive.

But these are things that would have happened anyway in 5-10 years. The fact that they arrived in one fell swoop has pruned the market starting from the less elastic activities, nothing more. But the activities on which the vultures were already circling died.

Wait for the second wave to sweep away insurance companies and banks, and then it's really dancing. That the bank headquarters is the most useless thing in the universe in 2020, and even insurance is not in better shape (but for other reasons).

Catering and real estate in Europe (average age: 44) were already dead.

With this, I close.

Leave a Reply

Your email address will not be published.