The division of labour is limited by the extent of the market. Adam Smith

Adam Smith gave the famous example of pins. He asserted that ten workers could produce 48,000 pins per day if each of eighteen specialized tasks was assigned to particular workers. Average productivity: 4,800 pins per worker per day. But absent the division of labor, a worker would be lucky to produce even one pin per day. (More)

Factories are dramatic examples of scale economies resulting from specialization. When you break up a large task into many small tasks, each to be repeated many times by a specialist, then you can do those tasks much faster and cheaper. Especially when the work product is very standardized, not varying much from case to case. Each worker can figure out just how to set up his/her task to do it best, with just the right angle, lighting, tools, and order of subtasks. And just the right people can be assigned to each task. Specialized tools can be designed for particular subtasks, and some subtasks can be automated. For example, car factories cars need only 14 hours of work to make a car, but if one person makes a car it takes them two months to two years.

Now consider car repair. Today, that process is mostly done via the same sort of general methods by which one person would make a car by themselves – much less efficient. Could we make more efficient car repair factories? Yes, if we had sufficient scale. If all the cars that were built the same (with same make & model) and had the same presenting problem could be lined up in front of a huge factory, then that repair task could be broken into many small tasks done by specialized workers. The problem is that it would be too expensive to ship all the cars of a particular model with a given problem to one location, and then there might not be enough of them at any one time to keep a big factory busy.

There is one car maintenance task that is needed often enough, and similar enough across car models, that we do actually make small factories: car washes. In large urban areas, there is enough demand to support small car wash factories near enough to each customer. And automated car washes are often substantially cheaper than hand car washes.

Now imagine that we had cheap teleportation; things disappear from one spot and immediately appear somewhere else on the globe. In this case we would be able to create larger repair and maintenance factories for each product, probably right next to the factory where that product is made. This would create stronger incentives to standardize products, to allow larger more specialized factories of this sort.

We could also make specialized factories for maintaining things that we don’t create. For example, with teleportation, there could be big facilities for grooming each particular type of pet. And veterinarians could specialize in dealing with each particular kind of animal and presenting problem. Making those services much cheaper.

All these gains would come because cheap teleportation would allow the entire world to become one big integrated market. Today larger cities are more efficient at most everything, and have more specialized services, such as more kinds of restaurants. With teleportation, the entire world becomes one big city, allowing vastly more specialization, which can be used either for more variety, as in the case of restaurants, or cheaper repair and maintenance, as in the case of specialized pet grooming and medical care.

Now consider remote work using advanced avatars. A robot can show up at your door, together with its large tool kit, or just sit in your closet. Larger more specialized toolkits and setups can sit ready a mile from your home. These all can be tele-operated by any human worker anywhere in the world. After years of practice, they can work the robots and tools remotely nearly as fluidly as they can work their own hands.

These remote workers and their avatar robots allow many of the efficiency advantages that teleportation would bring. That is, remote workers are teleportation lite. Instead of the item to be worked on moving through a factory space filled with different workstations run by different specialists, the item can stay in one place next to the same avatar that is controlled by a sequence of specialists, each doing their particular task. Instead of physical objects teleporting around, it is the workers who in effect teleport to each new task. This arrangement may limit the number and kind of specialized tools that can be brought to bear on any one task, but there’s otherwise no limit on how specialized the workers and their methods can be.

If the idea of a service factory seems fanciful to you, consider that they already exist for services that can be done by phone:

Starting in the 1980s, airlines, insurers, health care providers, credit card companies, and other enterprises began outsourcing labor-intensive back-office work to shared-services providers—at first close to home and then increasingly offshore—to cut costs and improve efficiency. In most sectors, this workbench extension was about as far as the transformation got. The majority of large service enterprises still use traditional factory layouts that rely on large numbers of people following workflows that are hardwired into legacy IT systems. … [This] traditional service factory works well in terms of reducing costs and enabling service companies to scale up. (More)

Recently I said:

Remote work is my guess for the most important neglected trend over the next 30 years. (At least of trends we can foresee now.)

My reasoning: remote work should greatly increase the division of labor. While today we live in a globally interconnected world, most industries and professions are not actually global. Some are national, some are regional, some are city-wide, and some are even more local. The smaller the market, the less specialization, and the less productive is an industry. So as remote work spreads, the geographical scope of many kinds of markets will increase, and thus so will their variety and productivity.

Customers will have the choice to spend the new remote work possibilities on more specialized products and services, or on more efficient versions of a smaller number of more standardized products and services. But either way, remote work can be a very big deal. In the long run, about much more than just saving on the costs of commuting or renting office space.