Illustration by VectorStock

As a doctoral student at HBS, Prithwiraj “Raj” Choudhury identified a little-studied phenomenon in innovation: Managers from emerging markets who migrated to the United States for jobs at multinational companies and then returned to their home country to help set up research and development centers fostered more patents than those who had not crossed borders. Since then, the geography of work and innovation has been the focus of his research. These days, Choudhury, the Lumry Family Associate Professor of Business Administration, is exploring the productivity effects of organizations allowing employees to “work from anywhere” and why geographic mobility has led to increased innovation.

The movement of employees, Choudhury found in one study, promoted tacit knowledge transfer across geographies, the exchange of information that could not easily be codified and written down. “Knowledge can often be ‘locked’ within a geography and may only be transferred across borders when the individual possessing the knowledge moves,” he says. “You need the human beings who possess the knowledge to mentor others.” Choudhury also identified a second—and even more valuable—effect: When workers cross geographic borders to work together, their different cultural experiences and fields of expertise create new knowledge. “That ‘recombined knowledge’ is greater than the sum of its parts,” he says. “If skilled migration was restricted, we will lose not only knowledge transfer, but also all the novel recombinations that come from migrants working with locals.”

Prithwiraj Choudhury (photo by Susan Young)

Prithwiraj Choudhury (photo by Susan Young)

But Choudhury also observed the many obstacles that can limit a worker’s geographic mobility. Those obstacles can be personal: A spouse’s or partner’s job, a child’s schooling, or a parent’s health can prevent a worker from considering a move. Often, though, the stumbling blocks affect larger groups of workers. “There’s a lot of geographic immobility because of regulation, occupational requirements, and economic considerations,” Choudhury says. If workers have difficulty obtaining visas or face significant hurdles to earning a license to work in their fields of expertise in another country, companies can’t benefit from knowledge transfer and recombination—unless they get creative with the concept of geographic mobility.

To explore possible solutions, in another recent study Choudhury evaluated how policy changes around worker location in the United States Patent and Trademark Office (USPTO) improved productivity. The USPTO employs about 8,000 patent examiners at its headquarters in Alexandria, Virginia, and four regional offices. Through a program instituted in 2006, many of these patent examiners were allowed to work from home up to four days a week, which gave them flexibility in their schedules. In 2011, the USPTO revamped its remote working policy to allow patent examiners to work from anywhere (and enabling the USPTO to reduce office space needs in expensive regions). Choudhury found that those who took advantage of the policy chose to move to more attractive locations, which might mean places with a lower cost of living, better future job opportunities, or a warmer climate, depending on the individual’s preferences. Regardless of their decision, the patent examiners were 4.4 percent more productive than their work-from-home peers.

The future may be entirely remote for some companies, says Choudhury, who is currently writing a case on GitLab, a 1,000-person tech firm that does not have a physical office. “An all-remote company immediately addresses all the concerns that cause geographic mobility friction. No one has to move anywhere,” he says. “But these companies have to address questions about managing coordination and socialization. New technologies make that possible, but organizational process is the key.”

For Choudhury, these innovative new models benefit not only the employee and employer. They can also benefit society: “With work from anywhere, people can go back to small towns, reduce urban congestion, and limit the impact of commuting on climate change. The secondary effects are mind-boggling.”

Post a Comment