Why face-to-face still matters

Cities were the future at the start of 2020 and there’s no reason to think they won’t still be the future in 2022. How so? While it’s true that urban economies have looked very vulnerable to the long-term effects of the Covid-19 pandemic and repeated lockdowns, their offer – of being central places that enable access and face-to-face contact – remains unique. No amount of Zoom meetings can substitute for being there. Our recent research shows why.

The pandemic has run a full-strength test of what digital-only work would be like for many people and firms. Forecasts have ranged from “things will never be the same again” to “things will be remarkably like they were before”. As we edge closer to the second anniversary of Covid-19’s presence in the UK, cities still feel vulnerable to the combination of Working From Home (quickly rebranded WFH by human resources and the popular press), to the ongoing impacts of IT and, in particular, to effects of artificial intelligence on employment.

However, and this is critical, the dependency of high-added-value businesses — finance and investment, the arts and culture, legal and consultancy services, and so on — on being able to get people around the table hasn’t changed: they still need places that are well-connected and hyper-convenient to meet. These businesses operate in ‘opaque’ markets where uncertainty — is this film a hit or a dud? Is this deal going to make or break the fund? — is the rule, not the exception.

There is a heavy reliance on judgement and on understanding clients, as well as being understood by them. Here, business decisions are made on a basis of confidence, not certainty, and face-to-face contact (F2F) is how we collect the data needed to make those judgements: sitting across the table is still the best way to test genuine reactions to ideas.

In the spring of 2021, we published the optimistically titled Why Face-to-Face Still Matters: The Persistent Power of Cities in the Post-Pandemic Era. Across nearly 40 interviews with Londoners across various industries — both before and after the virus hit — we show that in high-touch industries, there’s a constant whirl of quick in-real-life contacts despite the ready availability of digital alternatives.

Yes, digital channels are used for keeping in touch, but when the stakes are high — a pitch, an introduction, signing the deal — then face-to-face contact provides a bandwidth that other channels cannot, allowing us to access the tacit, and understand the implicit. Although the boozy lunches of yesteryear are largely history (we found in our research that ‘lunch is dead’ in many sectors), F2F is still reserved for the most important moments.

Of course, this isn’t to deny that companies didn’t discover that a lot of their work could be done remotely. As one interviewee put it: many city-centre firms realised that they had been ‘torching money on property’. Our newfound familiarity with Zoom, Teams and all the other platforms we’ve been forced to install is going to mean change. And that’s before you factor in the growing impact of Artificial Intelligence (AI) and its capacity to take on white-collar back-office jobs.

The experiences many of us have had WFH under lockdown will strengthen tendencies that already existed, but it will not create fundamentally new ones. Change has been accelerated by Covid-19, but it didn’t cause it. New tech has been transforming cities for 200 years: since coal and steam and capital launched the First Industrial Revolution. But in the 2021 urban space-economy, we do think that many more businesses will be asking more pointedly ‘why are we here?’

So, who’s going, and who’s staying? The greatest benefits of city centre proximity will be with uncertain markets with complex outputs, companies with short product cycles, and constantly changing transaction patterns. High finance, consultancy, and creative/cultural organisations are the likely stayers. Those likely to go – if they haven’t already – include traditional R&D, logistics and back-office functions which the client rarely sees. This is also the case where the nominal ‘client’ is internal and in corporations where teams and projects are persistent and where people know each other — and their roles — well. But when you are constantly touting for new work, and where the value of your work is only understood through the experience of working with you, then it’s probably worth the investment in a city location. This is an old story, not a new one.

So, lots won’t change in particularly striking ways. Cities and towns will fall back into recognisable and long-established patterns. World city dominance will continue. Central London, Lower Manhattan and Paris-Ville will hold on to, and continue to attract, businesses and markets where there is a high degree of customisation, where there are picky, quality-sensitive clients, and where cross-cutting collaboration — the lawyers, IT folks, and hedgies, or the actors, editors, and post-production people — informs complex outputs or advice to decision-makers.

Indeed, one of the paradoxes of the pandemic is that it will cement the importance of the very largest cities. Allowing workers to partially WFH doesn’t mean the job has been exported or out-sourced, it just means that the catchment area for the city has expanded. Our work points to relatively few of those ‘fleeing’ the big, purportedly Covid-infested cities relocating to the actual countryside. It is the towns and cities with good connections back to London (or other major cities such as Manchester, Liverpool or Leeds) that will be the main beneficiaries.

So, for the major regional cities there is a lot of promise: the task is to double-down on their role, often long-established, as the attractive market and social centre to their new larger catchment area, in a world where the alternatives are online shopping and offshored office jobs. Smaller places – despite the excitable prognoses of a flood of businesses relocating to pleasant market towns – will need to work at it. There is potential, because of their convenience and lower cost base; but also a menace, because sometimes those apparent advantages will be undercut by the fact that ever more businesses can locate anywhere.

The pandemic has been a grim and chilling experience, and it has hit the big cities hard. Yet if we stand back and look at the battering they took in the 20th Century – particularly in the Second World War – their resilience and longevity is all the more striking. At the end of that desperate period, the insufferably bouncy Sir Henry ‘Chips’ Channon, an American-born British Conservative politician, confided to his diary on 10 January 1946 the following:

“At the fashionable, carefree Carcano-Ednam wedding reception I remarked to Emerald [Cunard, a society hostess] how quickly London had recovered from the war and how quickly normal life had resumed. ‘After all,’ I said, pointing to the crowded room, ‘this is what we have been fighting for’.”

Chips and Emerald certainly were not the 20th Century’s greatest intellects, but they were right. London did recover and from a far more fearsome pounding than Covid-19 has meted out. Being there is still at the core of the urban experience. Even in a world of instant digital access and unparalleled connectivity, central places matter, and face-to-face contact is what they do for a living. That is their story, and it will be their future.