Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along
Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jaily. We bring you
Speaker 1: insight from the best and economics, finance, investment and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple Podcast, sun Cloud, Bloomberg dot
Speaker 1: Com and of course on the Bloomberg terminal. This is
Speaker 1: a great joy for Bloomberg Right now, after the fifteen
Speaker 1: years of public service at the o e c D
Speaker 1: in Paris, Annael Guria has retired and after a really
Speaker 1: interesting nominating process, the o e c D selects the
Speaker 1: Pacific Rim. The heritage of the o c D and
Speaker 1: the previous five Secretary generals has been Denmark, Netherlands, France, Sweden,
Speaker 1: France and then it changed to Canada and Gurius, Mexico.
Speaker 1: Now the o e c D reaches across the Pacific
Speaker 1: Rim because sure marble Bonny of Singer Sports says, it
Speaker 1: is the Asian century and part of that is Australia.
Speaker 1: Matthias Corman is the o e c d's newly appointed
Speaker 1: Secretary General. Mr Corman, wonderful to have you with us
Speaker 1: today and you dive into a treaty and the complexities
Speaker 1: of a G seven effort to tax the larger companies.
Speaker 1: A treaty makes it very very difficult as well. How
Speaker 1: will the o c D monitor and study the treaty
Speaker 1: effort to make taxes uniform at well? Firstly good to
Speaker 1: be uh. Secondly, the globalization and the digitalization of our
Speaker 1: economies has created distortions and inequities when it comes to
Speaker 1: the capacity of governments around the world to rise the
Speaker 1: necessary revenue to fund the public services and supports die
Speaker 1: provide to their populations. And the only way you can
Speaker 1: solve a challenge like this is through a global solution
Speaker 1: that is multi largally agreed. And in that context, the
Speaker 1: o CIT has been working for many years to help
Speaker 1: improve the global taxation arrangements, to make them fairer, to
Speaker 1: make them work better. Now at the G seven on
Speaker 1: the weekend, a landmark historic agreement was reached and and
Speaker 1: that goes to two important components. One to ensure that
Speaker 1: digital companies, large digital companies but also other large companies
Speaker 1: that operate multinationally around the world pay their fair share
Speaker 1: of tax in markets where they generate significant profits. And secondly,
Speaker 1: to ensure that multinational companies are not able to structure
Speaker 1: their tax liabilities, I mean seriously minimize or completely eliminate
Speaker 1: their tax liabilities anywhere around the world, taking advantage of
Speaker 1: tax hyns and and so on, and so you know,
Speaker 1: ultimately this is one step in the process. There will
Speaker 1: be other steps to follow. The O E c D
Speaker 1: facilities a process that is quality inclusive framework which brings
Speaker 1: together hundred thirty nine countries and jurisdictions from all around
Speaker 1: the world, and and and and of course ultimately at
Speaker 1: the G twenty UH further formal agreement will have to
Speaker 1: be reached. But the fact that G seven economies, you know,
Speaker 1: some of the biggest economies around the world, have a
Speaker 1: great to this reform is a very significant stop step
Speaker 1: forward in making sure that there is a globally more
Speaker 1: fair and sustainable taxation framework in place. Before you went
Speaker 1: to Perth, Australia, within your Belgian economics, you studied the
Speaker 1: Wilsonian effort coming out of Versailles and how all the
Speaker 1: League of Nations collapsed. Basically with the US Congress in
Speaker 1: the US Senate is the O E C D and
Speaker 1: a G seven or G twenty tax regime at the back,
Speaker 1: and call the American legislative branches. I mean, firstly, I
Speaker 1: have to say that the Biden administration has been very
Speaker 1: helpful in facilitating I consensus at the G seven on
Speaker 1: the weekend. I mean, the Biden administration and Secretary Yelling
Speaker 1: took a very constructive approach to multilateralism, helping to unblock
Speaker 1: what had been you know, difficult dossier up until that time.
Speaker 1: But of course, I mean, ultimately, all countries that are
Speaker 1: part of an agreement and international agreement ultimately have to
Speaker 1: work you know, these issues through in their domestic context,
Speaker 1: including you in, in the context of you know, their parliaments.
Speaker 1: And I mean that is that is obviously something that
Speaker 1: we hope the US will do in its you know,
Speaker 1: in its own time, in the appropriate way. My DearS
Speaker 1: G seven agreed to a minimum at least of fifteen percent.
Speaker 1: Could you see that tax rate going above that fift Well, look,
Speaker 1: you know, it's important to ensure that we strike the
Speaker 1: right balance. I mean, the average across the or CIT,
Speaker 1: the average corporate tax right across the o E City
Speaker 1: membership at present sits at about twenty one. There are
Speaker 1: some countries that are below the fifteen percent, quite a
Speaker 1: few of them are above the I mean, if if
Speaker 1: we were able to achieve a circumstance where all multinational
Speaker 1: companies operating globally are required to pay at least fifteen
Speaker 1: percent on their on their profits, I mean, I think
Speaker 1: that that is a very significant step forward. Of course,
Speaker 1: there's still then spies for the appropriate competition between different
Speaker 1: jurisdictions based on the fiscal policy settings and their tax
Speaker 1: mix in their respective jurisdictions. But yes, there's still a
Speaker 1: lot to do. As you were mentioning and Tama's referencing,
Speaker 1: how US legislature may end up taking a lead role.
Speaker 1: What exactly this looks like. What are the main hurdles
Speaker 1: that you see in the ongoing negotiations as we had
Speaker 1: in the G twenty. Well, look, I mean, you know, clearly,
Speaker 1: I mean it's very important to have all of the
Speaker 1: G seven countries reached that agreement, but of course something
Speaker 1: we need to expand you know, the level of agreement
Speaker 1: you know well and truly beyond the G seven And
Speaker 1: that's what the Inclusive Framework process will do with more
Speaker 1: than a hundred countries and jurisdictions involved. And indeed, I
Speaker 1: mean around the G twenty table, you have a you know,
Speaker 1: significant number of other large economies around the world part
Speaker 1: of the process. So I mean, I'm quietly hopeful, quietly
Speaker 1: optimistic that ultimately, when it's all said and done, we
Speaker 1: will be able to reach an outcome, you know, in
Speaker 1: the next in the next little while. But I think
Speaker 1: it's on the tax plan though. Can we go back
Speaker 1: to this idea here of what when you're setting the
Speaker 1: revenue threshold here there's been a lot of talk about
Speaker 1: how complex agreement is or how much it will be,
Speaker 1: and the idea that companies will sort of be able
Speaker 1: to find loopholes to get below that twenty billion dollar
Speaker 1: threshold or whatever the final threshold. Maybe, how do you
Speaker 1: ensure that companies aren't going to find and end run
Speaker 1: around that with regards to the revenue component of it. Look,
Speaker 1: I mean you're now going well and truly into the
Speaker 1: weeds of you know, technical you know, implementation arrangements. I mean,
Speaker 1: I think the principles are very clear. Companies, large companies
Speaker 1: that are generating significant profits in markets around the world,
Speaker 1: digital companies but also other large companies should be required
Speaker 1: to pay their fair share of tax in the markets
Speaker 1: in which they generate those profits. I mean, the combined
Speaker 1: effects of the globalization and the digitalization of our economies
Speaker 1: has meant that you know, it has been possible for
Speaker 1: quite a number of large companies not to pay or
Speaker 1: to to pay very little, or not to pay any
Speaker 1: tax at all in many of the market stall pride
Speaker 1: and and that is just a model of fans and
Speaker 1: public confidence in the viol taxation system works. And and
Speaker 1: that is something that the proposal agreed to buy g
Speaker 1: seven finance ministers on the weekend would address. I'm gonna
Speaker 1: tais Corman. I am absolutely fascinated is your selection through
Speaker 1: the nominating process. Many of the other nominees for o
Speaker 1: E c D or people very familiar to Bloomberg Surveillance.
Speaker 1: They've been great helped us in our coverage internationally over
Speaker 1: the years. You are a different o E c D
Speaker 1: Secretary General. And I want to go to your Australia,
Speaker 1: your Western Australia and the idea of the debate over
Speaker 1: big evil American tech companies. Maybe it's tangential to O
Speaker 1: E c D, but this is going to be in
Speaker 1: the cross eres. The fact is Amazon out of the
Speaker 1: Perth Airport has been a massive job creator for Western
Speaker 1: Australia from where you sit with your finance work in
Speaker 1: Australia and now you moved to Paris. How do you dovetail?
Speaker 1: How do you fit together the European fear of American
Speaker 1: big tech with the reality that create jobs like the
Speaker 1: per theirport Fulfillment Center. Well, firstly, you know, there's thirty
Speaker 1: eight member countries of the o e c D and
Speaker 1: the one thing that joins us all together is that
Speaker 1: we are all market based democracies and were all committed
Speaker 1: to generating opportunities for the people in our countries to
Speaker 1: get ahead based on free market principles and indeed, you know,
Speaker 1: based on democratic principles and in the counties of rules
Speaker 1: biased global trading systems. So I think you'll find that
Speaker 1: the things that we have in common are much much
Speaker 1: stronger than than the variances between you know, different parts
Speaker 1: of our membership. Now, you know, I mean, I bring
Speaker 1: to this job about seven years experience as the Australian
Speaker 1: financemen stuff. But I also bring to this job, you know,
Speaker 1: my background us uh, somebody who grew up in Europe,
Speaker 1: went to school and university in Europe. And so I mean,
Speaker 1: I think, I guess you know, the membership felt that
Speaker 1: I had a particular contribution to Mike and I look
Speaker 1: forward to making it. This has been wonderful Mats Corman.
Speaker 1: Congratulations uh as the new Secretary General of the OECD,
Speaker 1: we begin strong in as our Troy Gayski joins us
Speaker 1: with Skybridge here on the making of alphabeta Gamma and
Speaker 1: the rest of it within the hedge fund business. Troy,
Speaker 1: I see all sorts of articles that it's been a
Speaker 1: really really whipsode challenge six weeks or so for the
Speaker 1: hedge fund business. How is it? Is there alpha out there? Yeah,
Speaker 1: but you're write it has been challenging, particularly in long
Speaker 1: short equity, really started since February. And what we saw
Speaker 1: is that remember in this gets back to some of
Speaker 1: the inflation concerns and where the treasury yield is now,
Speaker 1: is that you know, the industry is really positioned for
Speaker 1: you know, slower growth potentially you know, less fiscal stimulus coming,
Speaker 1: and so they were overweight growth and um stay at
Speaker 1: home names to some extent um, those have underperformed recently
Speaker 1: and a lot of the value circulcols have really screamed
Speaker 1: and so it's been a choppy environment and law in
Speaker 1: short equity, you know, last year was a very strong
Speaker 1: alpha year. This year has been a slight negative alpha year,
Speaker 1: so it's been harder in the equity part of the
Speaker 1: capital structure. That being said, if you look at the
Speaker 1: stress debt managers or those in structure credit, their principally
Speaker 1: recovery slash value plays. So those have performed very admirably
Speaker 1: through June seven so far this year. We could talk
Speaker 1: all about that, Troy, but really everyone wants to know
Speaker 1: about bitcoin. And you're holding in the crypto asset. Considering
Speaker 1: the fact that you have made such a big push
Speaker 1: saying that this is going to be the key determining
Speaker 1: factor in your outperformance this year, where do you stand
Speaker 1: on that now? Given China's noise around potential lockdowns, regulatory issues,
Speaker 1: and the fact that we're perhaps moving into a new
Speaker 1: regime of liquidity. Yeah, so look, we we stepped back
Speaker 1: and still look at the initial thesis. Right, you still
Speaker 1: have tremendous money supply growth. You know, the FED is
Speaker 1: still expanding their balance sheet by twenty billion a month.
Speaker 1: You know M two's on pace to grow somewhere between
Speaker 1: fifteen and seventeen percent this year. Um, you think of
Speaker 1: every central bank in every nation state is still in
Speaker 1: a debasement period for their currencies. So the macro environment
Speaker 1: is still very favorable. And as you're talking about before,
Speaker 1: you know, it doesn't look like there's any urgency for
Speaker 1: the Fed to taper. They may announce the taper at
Speaker 1: the end of this year and start to paper sometime
Speaker 1: early twenty two, but that's the most likely path. And
Speaker 1: then from an adoption standpoint, again, we still think we're
Speaker 1: very early. Um. You look at some of the high
Speaker 1: net worth are the wealth management platform products. You know,
Speaker 1: Morgan Stanleys is raised a hundred fifty million dollars already. Um.
Speaker 1: You look at gradual adoption in the hedge fund industry
Speaker 1: and the asset management industry that continue us. And then lastly,
Speaker 1: we're still relatively early. Closet having you know, the last
Speaker 1: having was made eleventh of last year, typically have an
Speaker 1: eighteen to twenty four month bull market, So we still
Speaker 1: think we're in a bull market. Obviously we had a
Speaker 1: very horrific correction, but we think the trend line is
Speaker 1: still up here over the next three to six months.
Speaker 1: And you think that the floor built into that Troy
Speaker 1: I mean because a lot of people look at the
Speaker 1: current prices. They wonder about some of the institutional embrace
Speaker 1: of this and whether that's going to be enough of
Speaker 1: the floor to keep things from going lower. Well, yeah,
Speaker 1: so obviously after the big dislocation we had, we built
Speaker 1: up a nice stability zone here in this thirty three
Speaker 1: to thirty six thousand level. UM, it will be hard
Speaker 1: to push meaningfully above forty to forty five UM in
Speaker 1: the near term. But again, if you go back and
Speaker 1: look at previous bull markets, you had substantial corrections along
Speaker 1: the way. UM, this one was obviously more profound. UM.
Speaker 1: You do highlight a good point on the environmental concerns
Speaker 1: is that may slow down some institutional adoption. But again,
Speaker 1: if you step back and look at your choices for
Speaker 1: how you play currency to basement, if you care about
Speaker 1: liquidity and you care about non correlation, you know, Bitcoin
Speaker 1: in particular is still a very strong choice for you,
Speaker 1: alongside gold and maybe tell lesser extent copper, But copper
Speaker 1: of course, you know, it's a very cypical recovery play
Speaker 1: that's already rallied. UM. You know, it's up percent over
Speaker 1: a very short period of time. Troy, I want to
Speaker 1: talk about the big tech, big cap we've got the
Speaker 1: Apple conference today, Uh, something that will become a recovery
Speaker 1: of course across all the afternoon. Troy, there's a comfort
Speaker 1: factor for hedge funds to own those companies. Describe the
Speaker 1: intellectual process of hedge funds loading the boat on large
Speaker 1: cap profit making tech. Yeah, loading the boats a strong terms,
Speaker 1: because I think there is some distinction in which names
Speaker 1: they own. But the industry particularly is as long Facebook
Speaker 1: and Google as we've ever seen them. You know, when
Speaker 1: you have great value investors like set farm and with
Speaker 1: you know, two of the top ten names, or Facebook
Speaker 1: and Google for instance, says a lot. And you know,
Speaker 1: so the intellectual process is pretty straightforward. It's like, hey,
Speaker 1: we're gonna be mean reverting here to a slower growth
Speaker 1: environment again after a big cyclical growth period. You have
Speaker 1: tremendous profit margins, tremendous cash flow generation. There's really no
Speaker 1: cost pressures in terms of you know, expenses, meaning they're
Speaker 1: not it's not labor intensive industry that's gonna suffer from
Speaker 1: higher wages for instance, um and you know, on evaluation standpoint,
Speaker 1: they haven't been cheaper relative to the broader markets pre
Speaker 1: pandemic days. So you know, as hedge funds filter through
Speaker 1: their choices. Uh, if you're filtering for risk adjusted returns,
Speaker 1: particularly in an environment that will mean revert to slower growth,
Speaker 1: does look like uh, standout winners to the hedgemund industry. Troy,
Speaker 1: thank you so much, Truck. I ask you a briefly
Speaker 1: there in the state of alternative investments with Skybridge, We're
Speaker 1: thrilled to start strong this week with Bruce cas when
Speaker 1: he's with JP Morgan, their chief economists, had a globally
Speaker 1: could have a research he hurts the cats to JP Morgan,
Speaker 1: trying to get out of cogent message on economics, Bruce Lincoln.
Speaker 1: Global inflation with the recovery that we're seeing dovetail those
Speaker 1: two in Is it a good inflation or a bad inflation?
Speaker 1: I think there's some of both here. Um on the
Speaker 1: spike that we're seeing, there's definitely some problems in terms
Speaker 1: of companies adjusting supply to demand. That's the bottlenecks you
Speaker 1: see in the semiconductor that's the used car prices. Is
Speaker 1: a bunch of those forces that are pushing up inflation,
Speaker 1: which is not great in terms of what we would
Speaker 1: like to see. The Other side of this, though, is
Speaker 1: that we are seeing price normalization and what are depressed
Speaker 1: levels of service prices as we're seeing activity picking up,
Speaker 1: and I think that's obviously uh constructive. The bottom line
Speaker 1: those we're getting a big spike in inflation here and
Speaker 1: we're looking for another big number this week with a
Speaker 1: five tense rise in the US core CPI. What happens
Speaker 1: What does the Fed do if we see that increase
Speaker 1: in cp I this week, if we see the inflationary pressures,
Speaker 1: but we don't see material improvement in at the pace
Speaker 1: of job gains akin to what we saw on Friday.
Speaker 1: So I think there's three things the FED has to
Speaker 1: really work on. One is I think continuing to guide
Speaker 1: us that it's not going to change rates anytime soon
Speaker 1: in response to an inflation spike that they think is
Speaker 1: largely temper Aright. We think they're going to continue to
Speaker 1: guide that rates are gonna at least be on hold
Speaker 1: through the end of twenty two. The second thing I
Speaker 1: think they need to do is start telling us that
Speaker 1: if they're wrong, and certainly they could be wrong, uh
Speaker 1: and inflation is more persistent, that down the road they
Speaker 1: can do what they need to do to keep inflation
Speaker 1: under control. And I think in that regard they will,
Speaker 1: if not encourage, at least tolerate a rising expectation of
Speaker 1: rates over and then, finally, what we're not going to
Speaker 1: get in June but we need is more clarity about
Speaker 1: the balance sheet. I think they're gonna tell us they're
Speaker 1: talking about it, but they're also gonna tell us it's
Speaker 1: too soon to really lay out the parameters of what
Speaker 1: they do in terms of tapering and balance sheet movements.
Speaker 1: More generally, our bruce are Bloomberg opinion columnist Marcus Ashworth
Speaker 1: today says it's really difficult to model UM the US
Speaker 1: economy because the ferocity has been driven by monster fiscal
Speaker 1: UH injections, and because the Fed has been deliberately vague
Speaker 1: about what inflation, what flexible targeting really means. How much
Speaker 1: harder is that? Is that making your job well? I
Speaker 1: think forecasting is always difficult, particularly the future UM. Obviously
Speaker 1: we're going through a very volatile period. But I think
Speaker 1: if you take the broad contours that the economy is
Speaker 1: entering a boom phase led by the consumer, that Europe
Speaker 1: is joining it, and as you just mentioned, the news
Speaker 1: on vaccines and virus is starting to look good. Globally. Uh.
Speaker 1: The simple issue is we're in a very strong phase
Speaker 1: of growth that's not going to go away anytime soon.
Speaker 1: The spike in inflation, I think is largely temporary, but
Speaker 1: whatever is going to happen here, the FED for the
Speaker 1: time being is gonna be relative of lee, cautious and
Speaker 1: continue to hold the line. And I think on the
Speaker 1: inflation targeting side, the FED wants inflation to get up
Speaker 1: to the mid twos for a while. It doesn't want
Speaker 1: it to get above three, and it wants it to
Speaker 1: settle at two in the media in the medium term.
Speaker 1: I don't think these parameters are that far, you know,
Speaker 1: far away from you know where we might think ranges are,
Speaker 1: so that there's a lot of uncertainty. Executing is obviously
Speaker 1: very difficult. I think the Fed is pretty clear on
Speaker 1: what it wants here. Pruce, Michael Faroli and your team
Speaker 1: have led the way on our potential g DP just
Speaker 1: the sort of where are we from a demographic and
Speaker 1: economic standpoint? Have you tweaked your potential g d P
Speaker 1: to be a more optimistic statistic coming out of this
Speaker 1: pandemic with all the stimulus. It's an interesting question, and
Speaker 1: we're struggling with that, and we have not changed our
Speaker 1: view that US potential growth is around one and a
Speaker 1: half And as you can see in the latest employment report,
Speaker 1: and you can see more generally, there's been damage done
Speaker 1: to the supply side on LABE, but at the same
Speaker 1: time we've had a big productivity there to some of
Speaker 1: that is the rotation and growth to higher productivity sectors.
Speaker 1: It still remains to be seeing what happens here in
Speaker 1: terms of blasting damage from this effect, and we're not
Speaker 1: at this point taking a view of really trying to
Speaker 1: change that you of a one and a half percent
Speaker 1: potential growth rate, Dr Kasmin, thank you so much, Bruce Kasmin,
Speaker 1: JP Morgan, Chief Economists, head of all of their global
Speaker 1: economic research. This conversation has been hugely anticipated and it
Speaker 1: does so because Nicholas Bloom, as a young student many
Speaker 1: many years ago, was at the absolute forefront of labor dynamics,
Speaker 1: innovation and technology. He did this with someone that's been
Speaker 1: of such help to Bloomberg on the economy and Bloomberg surveillance,
Speaker 1: a great John Van Ren And and we're thrilled that
Speaker 1: Nicholas Bloom could join us from Stanford this morning. Professor
Speaker 1: congratulations and your January two thousand twenty one paper, which
Speaker 1: is the discussion point and work from home. I want
Speaker 1: to go back to Bloom Kretschmer and then rening of
Speaker 1: two thousand nine and what has changed as the technology
Speaker 1: has changed is the new technology the reason work from
Speaker 1: home will work. You know, it's been a very odd journey,
Speaker 1: so you know, it's back drop. I've been working on
Speaker 1: working from home since I think two thousand and four.
Speaker 1: I mean that's almost twenty years now, and it was
Speaker 1: normally a quiet backwater topic until of course March beginning
Speaker 1: of the pandemic, when it just went wild. Um, it
Speaker 1: has changed a lot. You know, my experience of working
Speaker 1: on working from home the last ten years have been
Speaker 1: kind of different because basically we've got the two final
Speaker 1: critical pieces. We have video calls so we can do this.
Speaker 1: We can know how have talks and zoom and teams
Speaker 1: on the internet, and we've had Dropbox in the clouds.
Speaker 1: You can file shares, but files. If you go back
Speaker 1: twenty thirty years, I talked to people that you know,
Speaker 1: do working from home in the eighties or the nineties,
Speaker 1: it was terrible. Yeah, telephone calls and dropping off piles
Speaker 1: of paper at the front door. If the pandemic had happened,
Speaker 1: did say, would have been in real trouble. I mean,
Speaker 1: we couldn't have efficiently. I'm not sure what the lockdown did.
Speaker 1: Like thank you know, thankfully we had the ability to
Speaker 1: flip roughly two thirds of the economy in March. Working
Speaker 1: from home it worked pretty well. In fact, it looks
Speaker 1: like a lot of that's here to stay well. But
Speaker 1: is there a permanence to it? And let's go back
Speaker 1: to the hallmark you did the paper with ven Rena
Speaker 1: and crushed where in oh nine Marissa Meyer changed the
Speaker 1: world at Yahoo in two thousand and twelve thirteen with
Speaker 1: a great debate about Yahoo worked from home. Dragged that
Speaker 1: forward now to where Nicholas Bloom and Mersa Mayer can
Speaker 1: say there's a permanence to work from home, or like
Speaker 1: Marrissa Myers, people would say, let's get into the office.
Speaker 1: Which is it? No, you know, I I spoke to
Speaker 1: Marissa mar recently about this, and I think what she
Speaker 1: did is exactly right. But history has kind of forgotten
Speaker 1: what she did. So just to be clear, Marissa Maya
Speaker 1: discovered that there are people that are working home full time,
Speaker 1: and some of them were like working so poorly, they've
Speaker 1: never turned on their computer for more, you know, more
Speaker 1: than over a week at a time. So she said, look, hey,
Speaker 1: you're gonna have to come in let's say three days
Speaker 1: a week. You can't work from home full time. You're
Speaker 1: gonna come in three days a week and be we
Speaker 1: we're on a monitor and manage you and make sure
Speaker 1: what's going on. You know, you're getting your job done.
Speaker 1: But huge numbers of firms are rolling out exactly this
Speaker 1: plan now. So you're here, you know, City Bank and
Speaker 1: Apple and Google, Microsoft, HSBC, etcetera. The world is copying
Speaker 1: exactly that plan. Now. They're saying, look, post pandemic, you're
Speaker 1: going to come in probably three days a week in
Speaker 1: the office. Let's say Monday, Tuesday, Thursday. You work from
Speaker 1: home Wednesday Friday, and we're going to manage you. We're
Speaker 1: gonna we're gonna check up and you and make sure
Speaker 1: that what you're doing or doing your job. But as
Speaker 1: long as that works, you can continue that indefinite, all right.
Speaker 1: So that gets right to the idea here, Nicholas about productivity,
Speaker 1: and I guess the perceptions of productivity. A lot of companies.
Speaker 1: They want to look over your shoulder and know that
Speaker 1: you're doing the work that you're supposed to be doing. Here.
Speaker 1: What is your data showing here about the level of
Speaker 1: productivity during the COVID crisis with everyone at home? Well,
Speaker 1: quite surprisingly, working from a home appears to be slightly
Speaker 1: more productive than being in the office. So that's based
Speaker 1: on survey responses and not some data we've got on
Speaker 1: a few individual firms. My concern, and most firms concern,
Speaker 1: is that won't last forever. So we kind of entered
Speaker 1: into the pandemic with this stock of what you might
Speaker 1: call social capitals. So we've been in the office for
Speaker 1: years together, we knew each other, we've been creative together.
Speaker 1: I don't think that can last forever. What we're doing
Speaker 1: right now working at home five days week so on productivity,
Speaker 1: the reason firms are going back is hybrid seems to
Speaker 1: be the best for productivity. Spent three days in the
Speaker 1: office social you know, or your meetings or your team
Speaker 1: events or your clients events. Are there two days a
Speaker 1: week quietly working at home, when you save the commute
Speaker 1: and you're actually better at quart time, It looks like
Speaker 1: that maximizes productivity. And consut and employees love working from
Speaker 1: home hybrid. They love to get two days a week
Speaker 1: at home. So this is why this plan has been
Speaker 1: so universal. Is this really the best of both world?
Speaker 1: BOMs are more productive and we as you know, employees
Speaker 1: are actually happy. Well, what about career advancement? Another criticism
Speaker 1: of the work from home movement is this idea that
Speaker 1: you need that FaceTime. If I want to move up
Speaker 1: in my career, I need to be face to face
Speaker 1: with Tim Keene every day, so it doesn't forget that
Speaker 1: I exist. Yes, exactly right. So again the thing I've
Speaker 1: spoken quite you know, vocally on and it's been someone controversialist.
Speaker 1: Career advancement is fine as long as you are coming
Speaker 1: in the same number of days as the people you're
Speaker 1: being competing against. So look, if I'm if I'm in
Speaker 1: a team of ten people and I'm at home full
Speaker 1: time and the rest of them are coming in you know,
Speaker 1: three days, we can imagine I'm going to get left behind.
Speaker 1: As long as the whole team comes in on the
Speaker 1: same three days and stays at home on the other two,
Speaker 1: things are good because you're compared with people are doing
Speaker 1: the same type of what schedule with you. No one's
Speaker 1: getting ahead of the boss because we're all coming into
Speaker 1: the same number of days. So the big problem is
Speaker 1: boems that are going for this choice plan, whereby they say,
Speaker 1: as long as you're doing your job, you can choose
Speaker 1: the number of days you come in. You can imagine that,
Speaker 1: you know, down the roads can be very problematic. Some
Speaker 1: people come in one day a week summer, come in five,
Speaker 1: and those that come in five are going to get promoted.
Speaker 1: Move ahead, Nicholas Bloom thank you for an early morning
Speaker 1: in Palo altime. Professor Bloom was Stanford at University that
Speaker 1: I really can't say enough about his January research on
Speaker 1: this raging debate of work from home. This is the
Speaker 1: Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays
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Speaker 1: Tom keene In. This is Bloomberg