Please note each graph can be enlarged by clicking on it.
“Governments and employers working with employees can, and should, take advantage of the unintended positive consequences of COVID-19.”
“Finally, we are truly in Liminal (“Threshold”) Time – the gateway between two stages in life!”
This is a short think piece that recognises that while the pandemic forced change without choice for almost all individuals and households, it has resulted in unintended consequences. We are in the midst of a real-world experiment that has created positive outcomes in that it has been suggested that the pandemic has made us less selfish and more societal focused and caring for others through being, in general, better responsible members of the community. There are, however, negative outcomes associated with the challenging, if not traumatic, experience for some individuals and households associated with job loss, social isolation, and inter-personal pressures within the household. However, a notable and potentially lasting consequence with positive impact, is working from home (WFH) and how that might translate into many impacts through the supply chain of businesses, particularly those that depend heavily on workers at the office, or who work outside of the home.
Before discussing WFH and the impact it may have on future transport and land use agendas, it is worth highlighting the seismic impact of COVID-19 and associated policies on broad mobility patterns. Using Google Mobility Data (Google 2020) we can see that, in a small sample of 16 countries from different parts of the globe, the time spent in transit (Figure 1), at workplaces (Figure 2) and in the home ((Figure 3) has changed dramatically almost everywhere. In particular, people have spent significantly less time in transit and workplaces, and more time inside the home which has in turn become the place of work (or study) for many. It stands to reason that the time spent at transit stations, workplaces and residences are intimately linked. Figure 4 highlights the degree to which these activities are related, with very strong positive correlations between the time spent at transit stations and work, and strong negative correlations between time spent at transit stations and home, and between time spent at work versus at home. It is interesting to note the differences in behaviour represented by South Korea and in particular Taiwan, suggesting that there are some differences in how these two countries are broadly responding to COVID-19.
A useful tool to measure the relative stringency of government policy across time is the Oxford COVID-19 Government Response Tracker (OxGRT 2020). OxGRT collect data on fourteen measures collected which are grouped into three over-arching dimensions, of which nine are used in the calculation of the Stringency Index:
where k is the number of component indicators in an index and Ij is the sub-index score for an individual indicator (see Hale et al. 2020 for further information). The indicators used in the stringency index are as follows:
(i) Containment and Closure:
(ii) Economic Response:
· Nil used in Stringency Index
(iii) Health Systems:
· Public information campaign
As can be seen, the biggest components in determining how stringent governments have been in responding to COVID-19 has been the limitations placed on the movement of people, which largely explains the shifting patterns in mobility that are observed in Figures 1-3. Generally speaking, it is unsurprising that countries that have been more stringent in their response have been so because of higher rates of infection. This is highlighted by way of a simple comparison. Figure 5 shows the average rate of positive tests within each of the 16 countries sampled, plotted against the average stringency index within each country for the time periods in which OxGRT has collected data on each measure. The darker dashed lines represent the average positive test rate over the 16 samples countries (0.036) and the average of the stringency index over the sampled countries (47.0). While outliers exist, generally countries with higher levels of stringency are grappling with higher positive test rates for COVID-19.
To gain insight into the way in which the stringency of government policy impacts on travel behaviour, we employ cross-correlation analysis to help identify lags of the x-variable (Stringency Index) that might be useful predictors of the y-variable (time spent at transit stations). The cross-correlation is given by equation (2) where we are estimating the correlation between a variable y and a different time-shifted variable xt+k, and σx and σy are the sample standard deviations of xt and yt respectively. Note that since time spent at transit stations is very strongly correlated with time spent either at work (positive correlation) or at home (negative correlation), analysing this one variable as a proxy for “movement” is sufficient.
Figure 6 provides the cross-correlation coefficients for lag periods +/- 20 days either side of when government policy was made more, or less stringent. The negative correlations indicate that an above average value of “stringency” is likely to lead to a below average value of “transit”. In the majority of the sampled countries, the peak correlations (indicated by darker red) occur at a time lag around 0, indicating the changes in time spent in transit locations occur mainly on the day in which policy interventions are made. Some outliers exist, in particular Hong Kong and Germany seem to have changes in mobility that occur before government policy is enacted (positive lag), and Japan has a negative lag of about 4 days which indicates that citizens respond more slowly to changes in stringency. Once again, Taiwan and South Korea also represent unusual cases.
It is clear that to restrict the spread of COVID-19, governments have deployed policies designed to curb the movement of people, which has in turn changed the nature of where time is spent and where work is done. It is undeniable that the change in work location is of considerable interest in many countries and with people spending more time at home globally, many are now also having to work from this location (admittedly to varying degrees of success). This is resulting in work-related laws being revised. For example, Germany is drafting a new law to make working from home a legal right (Elliot 2020), large corporations in the technology sector were among to shift employees to WFH and have limited plans for them to return to the office (Lerman and Greene 2020), and the Office of National Statistics in the UK (ONS 2020) has noted a rise in the number of employees working exclusively from home (almost a quarter of those surveyed).
It is our belief that, a notable and potentially lasting consequence with positive impact, is working from home (WFH) and how that might translate into many impacts through the supply chain of businesses, particularly those that depend heavily on workers at the office, or who work outside of the home. In focussing on WFH, we emphasise that while the pandemic forced a cataclysmic change on our lives without much time to prepare, it has happened, and as we continue to respond to the pandemic by keeping our distance, evidence is building on the pros and cons of WFH and the extent to which WFH will continue at a level that is greater than pre-COVID-19.
There is plenty of evidence that this is a global trend. The software company Slack (channel-based messaging platform for fostering teamwork and collaboration within organisations) commissioned a survey of workers who identify as ‘skilled office workers’ in the US, the UK, France, Germany, Japan and Australia, fielded between June 30 and August 11, 2020. A key finding of this survey was the extent to which employees would prefer to work in the future in a hybrid way, mixing time working both from home and from the office, with only 11.6% wanting to return to the office full-time (Elliot 2020). Figure 7 shows the proportion of respondents in each country who would prefer a hybrid work model.
In focussing on WFH, we emphasise that while the pandemic forced a cataclysmic change on our lives without much time to prepare, it has happened, and as we continue to respond to the pandemic by keeping our distance, evidence is building on the pros and cons of WFH and the extent to which WFH will continue at a level that is greater than pre-COVID-19. At a high level, preliminary indications as of early September 2020, in Australia, are that we can expect to see a growing number of workers in some occupation classes (notably white collar but not exclusively) working from home for one to two days a week, and that this comes with the blessing of employers in particular, who believe there is generally no difference, on average, in productivity for employees who are currently working from home compared to before COVID-19 (Beck and Hensher 2020, 2020a). Studying from home (SFH) has also occurred, and while this has subsided in Australia for primary and secondary education, it largely remains in place for tertiary education, and in many instances international students are now studying from their home country (though in considerably less numbers than before across the sector). The physical absence of tertiary students has had a significantly large and negative impact on local suppliers of student accommodation, and other support industries and services.
While we have had disruption in the past, a key difference with COVID-19 compared to those such as SARS, MERS, the Global Financial Crisis and natural disasters, has been the duration, coverage and the extent to which disruption has occurred and continues to occur. Our evidence suggests that COVID-19 has also broken the back of significant business resistance to WFH, and at a time where many businesses are looking to reduce costs, many see WFH as an appealing and viable option to reduce the cost of office space provision where lease costs in the CBD in particular, are often sizeable. Ongoing levels of WFH would also be a prudent risk management strategy should the COVID-19 pandemic re-emerge or another replace it in the future. Significantly lowering the environmental impact of staff travelling every day can also allow big corporates to deliver on their sustainability charter which has generally alluded them to date.
Again, we acknowledge that not all can WFH as well as others and that occupation and the nature of work is a key determinant. For example, those with a face-to-face role in a service economy are facing unique difficulties in the face of a pandemic (in 2018 Deloitte produced a report about the rising importance of the service economy estimating that 70% of employment in the OECD is driven by this type of activity). Also, many workers face work/life balance concerns along with unequal distribution of non-paid labour in the home, and constraints on available space suitable for ongoing WFH. Technology access also plays a role, for example the availability, reliability and speed of an internet connection is pivotal. While these caveats remain, there are other considerable benefits that accrue to the employee who is able to WFH successfully such as being able to allocate their work hours in a more flexible way, or most importantly recovering time that is often lost to commuting. Employees (and/or their employers) have also likely made investments in the last six months to enable WFH (e.g., improved home office capability) and given the duration of the pandemic, new strategies and habits are likely being developed to make WFH work for them. While there does remain some hurdles to the ongoing levels of WFH such as social connectedness, team work, collaboration and creativity, the human desire for face-to-face interactions with others (many authors have explored the role of social capital in the workplace and how friendship and connection can improve productivity), many of these barriers can be addressed with innovation and a work environment where there is a mix of WFH and working in “the office”.
The growth in WFH translates into some important positive changes in the performance of the transport network, particularly in the larger cities. Our research in Australia suggests that we might anticipate at least a 10 to 15 percent improvement in the metropolitan transport networks due to reduced traffic congestion on the roads and crowding on public transport. We suggest that WFH promises to be the greatest ‘transport’ lever for policy makers to reduce congestion and crowding that the sector has ever had. What we are seeing in our tracking surveys to date since March 2020 (Beck and Hensher 2020, 2020a) is that the increase in WFH in Australia is spread evenly throughout the five weekdays. This is important, since infrastructure and service capacity is typically determined by peak demand, and if this can be flattened as it suggests it might, then the implications for prioritising and deferring funds and planning in transport are potentially significant, even going forward over many years.
There are a growing number of structural responses that should be given serious consideration, and we now set out a number of likely futures post-COVID19.It will be useful to list a number of potential changes to the fabric of society that could occur due to increased WFH brought on by the pandemic and likely to continue well after the pandemic has subsided. These should, at a minimum, be part of any discussions by government in particular, but more generally, on future transport and land use agendas in all countries.
1. While we are likely to see a recovery of office workers back to the Central Business District (CBD) of the cities on any given day, it could be at a reduced level, around 80%, which will not only support reduced road traffic congestion but also manageable crowding on public transport compared to pre-COVID-19. Central areas of major metropolitan cities will continue to have a role, but as we discuss below, the idea of reinvigoration in suburbia should not be dismissed lightly in any attempt to protect and preserve the CBD as a matter of faith. Although this CBD impact is still a dent in the revenue sources for many businesses in the central city precincts that depend to a large extent on office trade, it is still enough activity to revitalise much of the business in the supply chain that is currently suffering. We must recognise that much of the loss in the supply chain is due to restrictions that are separate to restrictions on office workers and which are slowly being lifted. Furthermore, an increasing number of businesses have been moving to online trading and consequentially, one can expect a decline in traditional bricks and mortar trade. Restaurants and other food outlets will be the biggest winners as activity returns to some degree of normality in the CBD; however some structural change is likely, with new opportunities opening up in suburbia, and especially the locations that have already started to take on the appearance of a CBD or a small but growing business precinct.
2. Local suburbanisation can take on a new and appealing meaning which opens up opportunities for revitalisation of suburbia. These locational adjustments of WFH align well with promoting the 20 or 30 minute city, which remains a challenge given a strong radial and CBS focussed strategy in many cities throughout the world. We need to promote ‘be local and buy local’ to help capture the redistributive effect of increased WFH where small business in suburban areas can benefit from increased economic activity that they would otherwise not participate in.
3. All of these locational responses will present challenges for property developers and property agents who manage office space. Rents, relative to the average trend, may decline in the CBD as large enterprises rethink their priorities (especially the reduced number of workers in the office at any one time), and while lower rents may attract a new class of small to medium sized businesses into (or back into) the CBD, we would suggest that this will be balanced against the benefits of a more local office plan, where rents will also be competitive and office space more convenient to where people live, again reducing the pressures of the commute and supporting more flexible working hours.
4. Although there is much talk in many countries about getting back to the pre-COVID-19 office versus continuing to WFH, there is another way to reduce the burden on WFH while avoiding the need for the stressful commutes and loss of flexibility in working hours, namely the local shared or satellite office, often referred to as the ‘third office’ or neighbourhood business hub. This has the advantage of supporting ‘working close to home’ (WCTH) (reduced time spent in travel), but not at home with all of its accompanying limitations such as lack of social interaction, and poor space to work effectively without interruptions from, or interrupting, other family members. It also significantly reduces the lease cost of office space and its associated overheads as well as creating connections locally, be they work or social, effectively reducing excess office capacity in this new world of connectivity through digital capability. What we have here is similar to efforts to reduce the fixed costs of private car ownership through mobility services such as Mobility as a Service (MaaS), with the prospect of growing demand for the lower cost ‘Office Location as a Service (OLaaS)’.
5. With fewer days commuting, we can expect to see a greater use of the private car in general, but specifically for commuting, since commuters who were previously public transport users might be more prepared to put up with traffic congestion and parking costs for two to three days a week, but not necessarily for five days. This has important implications for public transport patronage, and indeed may require a rethink of the structure of fares (beyond a peak and off-peak differentiation) and local on-demand services. As Mobility as a Service (MaaS) reboots after the pandemic (Hensher et al. 2020 Hensher 2020), there is a need to rethink monthly subscription plans to allow for subscriptions that have value when used for lesser number of days compared to the typical monthly pay plan. These might be repackaged for specific combinations of numbers of days per month. A greater focus on local shared mobility offerings, especially bicycles and e-scooters, should increasingly be built into the offered subscription bundles.
6. We should also reflect on long distance domestic travel as restrictions are lifted. Specifically, we are likely to see a significant reduction in domestic business air travel in many jurisdictions, replacing for example, the Sydney to Melbourne or the New York to Chicago and return flights (typically 4 hours out of the day) to attend a one hour meeting with an online meeting. This may translate into a growth in local non-commuting activity with time freed up.
7. With a greater focus on local activity, there will be a need to reprioritise improvements in local public transport, safer pedestrian walkways and precincts, and bicycle lanes, serving short distant trips throughout the day, with the added benefit of improving first and last mile connectivity to PT and (hopefully) contributing to improved health outcomes. Local road amenity and safety may also need to be revisited, with a greater focus on localised maintenance and traffic control measures to cope with a potential change to localised traffic flow. Generally, we need a rethink where infrastructure funding should go, including deferring major infrastructure spend. We might even find that active travel strategies can become embedded within investment in key public infrastructure
8. The freight distribution sector, which has already shown significant growth with a noticeable increase in distribution to homes for online orders due to COVID-19, will continue to grow and investment to support freight networks with less “friction” will be crucial to the economy, even more so in the future.
9. Governments can lead the way in supporting WFH as a way of reducing pressure on the transport network, especially in metropolitan settings, but where this pressure is not of great consequence (e.g., many regional and rural contexts), they should encourage and support reduced travel and improvements in wellbeing associated with greater flexibility in work hours and days of the week working at home. Evidence through doing (leading by example) can flow through to the private sector to use WFH and WCTH to deliver on their sustainability charter.
10. Governments will also need to think creatively if they wish to reap the potential environmental benefits of increased work from home. Preliminary research has indicated that for people who commute by car, working from home is likely to reduce their carbon dioxide (CO2) footprint if their journey to work is greater than about 6 kilometres. However, for short car commutes or those done by public transport, working from home could increase CO2 emissions due to extra residential energy consumption. Encouraging more thermally efficient buildings and sustainable energy sources such as solar could be considered.
In summary, the liminal threshold imposed on society by the COVID-19 pandemic provides an opportunity to allow decision-makers to take a hard look at the assumptions being used pre-COVID-19 that underlie many of the decisions made on transport and land use futures. Doing this may offer a real opportunity for sustained change that many have been seeking. COVID-19 has brought us all together and the future must be seen as an all of society commitment.
These papers relate to the ITLS research program on WFH. Post-Wave 2, the project has received funding from the iMove CRC with industry partners TMR Qld, TfNSW and WA DoT. Wave 1 = late March 2020; Wave 2 = late May 2020.
Extended Q&A Session: https://youtu.be/aUr3Y5E0x4w
 The opinions in this thought piece are those of the authors alone. The paper was prepared outside of two research projects which we are now engaged in, and we acknowledge the support from the iMOVE CRC (https://imoveaustralia.com/) and our industry partners (Transport and Main Roads (TMR) MR Queensland, Transport for NSW (TfNSW) and the Western Australia Department of Transport (WA DoT) in moving the WFH agenda forward in the next 18 months.
 All correlation coefficients are statistically significant at the 1% level. Spearman’s correlations were used for the Australian, German, New Zealand, Hong Kong, Japan and Taiwan, and within South Korea for correlations with “work” only, due to the data being non-normal.
 Studying from home (SFH) has also occurred, and while this has subsided in Australia for primary and secondary education, it largely remains in place for tertiary education, and in many instances international students are now studying from their home country (though in considerably less numbers than before across the sector). The physical absence of tertiary students has had a significantly large and negative impact on local suppliers of student accommodation, and other support industries and services.
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