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One of the thousands of ways to accelerate U.S. economic growth is for companies to be alert to new measures that boost productivity while reducing costs. Today’s example: Having as many employees as possible work from home. Wall Street Journal economic columnist David Wessel writes of Aetna Inc.’s experience with this practice. The insurer started letting employees work from home in the mid-1990s as a way of retaining talented employees, but a decade later only 9% of its payroll was working from home full-time. At that point, things started to change. “Today, nearly half—47%—of Aetna's 35,000 U.S. employees work from home,” Wessel writes. “We aren't talking about checking email after dinner or working from home on Fridays. We're talking staying home every day: no desk, no cubicle, no computer in an office somewhere.” Aetna stopped thinking of its work-at-home policy as a favor to employees and started thinking about how it could reduce costs, particularly real estate costs. “Aetna estimates that real-estate and related costs are 15% to 25% lower than they would otherwise be—annual savings of about $80 million,” Wessel reports. “Working at home has reduced Aetna's total office space by 2.7 million square feet, the company estimates.” Obviously, not everybody can work from home. The carpenter, the steelworker, the teacher and the pilot must report to where their jobs are. But for those whose work tools are a computer, telephone, and the Internet — and there seems to be more and more of those types of workers in our economy — it’s a possibility with real benefits for both employee (no commute) and employer (savings). The larger point is that all of us tend to do things the way our predecessors and we always have done them. Innovation is not solely the province of gizmo creators or research labs. It can be applied equally effectively to manufacturing methods, logistics, organizational structure, and corporate governance. The ideas are out there, for those with minds that question and eyes that see.
2012 Economic Growth Fellow
John Prestbo is retired as editor and executive director of Dow Jones Indexes. Previously he was markets editor at The Wall Street Journal. He has co-authored or edited several books over the past 30 years. The most recent is “The Market’s Measure: An Illustrated History of America Told Through the Dow Jones Industrial Average,” published in 1999 by Dow Jones Indexes. His column, Indexed Investor, appears on the highly regarded “MarketWatch” business and finance website. He received his bachelor's and master's degrees from Northwestern University.Full Bio