How Tough Economic Times are Encouraging Virtual Workplaces

Leftimg The sputtering global economy could have a silver lining – companies looking to cut travel costs are turning to the virtual world for more business services than ever.

As CNN reports, companies are increasingly turning to telecommuting and virtual conferencing in graphical virtual worlds as a means of shaving costs and remaining competitive in an economy where credit is still tight and government life preservers are harder to come by.

Pixels and Policy takes a look at the exodus to the virtual business landscape.

Taking the Work Day to the Web

Graphical interfaces like ActiveWorlds and Second Life have always hosted at least a small business presence, but few companies have gone so far as to conduct wide-ranging business dealings through the virtual world. According to CNN, the corporate winds are changing:

[Linden Lab's] Enterprise tool will let employees' avatars —
animated alter egos — meet in virtual worlds from the privacy of a
company's own network, rather than the public networks used in standard
Second Life. That extra security could encourage more companies to take
up the technology.

The ability to collaborate effectively using
virtual tools may now become an increasingly important skill as
technology offers more options than, say, video conferencing.

The move from real to virtual business communication is larger than just Second Life. Some forward-thinking companies are even developing their own virtual business worlds in the same style as Second Life Enterprise. These are in-house virtual worlds, so they don't compete directly with Second Life Enterprise, but the possibility for cross-pollination is an interesting thought.

There are obvious cost benefits to working in the virtual world that stand out at a time of global recession and rolling bankruptcy. Travel costs are reduced to zero as avatars from around the world come together in one central space.

Collaborative projects can be built and prototyped in a synthetic space instead of committing real-world resources. Information can not only be shared, but manipulated in three dimensions by an entire meeting.

There are, of course, very successful non-graphical competitors to the virtual business model – GoToMeeting is perhaps the best known, and its intuitive interface has likely drawn clients away from virtual environments with higher learning curves. But one part of the formula remains constant through graphical virtual meetings and more streamlined voice conferencing – cost reductions are real.

The Benefit of Building a Virtual Company

Of course, the flexibility of virtual work makes it ideal for companies spread across continents and time zones, but what about small start-ups with minimal staff and no international presence? In this case, there is something even bolder on the horizon.

Pioneered in Vermont to much acclaim and publicity, many companies are solving the problem of financing expensive office space by moving their entire business into the virtual world. According to a bill passed in 2008, companies registered in Vermont no longer need physical addresses or physical incorporation forms. They can register to conduct business in Vermont entirely through virtual means.

According to an article by Inc. Magazine:

Vermont plans to charge fees of up to $275 a year for each virtual
company registered, with state income taxes applying only to income
generated in Vermont
itself. The hope is to mimic the success of Delaware,
which collects some $700 million a year in incorporation taxes and fees
by offering low taxes, few regulations, and a business-friendly
judicial system.

Pro-business legislation like this will almost certainly have an impact in Vermont, as small businesses are freed from the confines of a physical space. No more expensive office space, desks, water coolers, commutes, or coffee runs.

For $275, a company can market its real-world product or provide its services from a hub on the Internet. As business loans dry up and financing is hard to come by, moving a business entirely into virtual space could mean the difference between a promising company folding up or thriving through the remainder of the global recession.

One thought on “How Tough Economic Times are Encouraging Virtual Workplaces”

  1. You’re confusing three types of “virtual company.”
    Companies registered in Delaware (or Vermont) are virtual companies in the sense that they do not need to have physical headquarters in those states — just a mailing address. Many companies in the US registered in Delaware because of favorable laws and tax rates. They usually have physical offices elsewhere. This doesn’t mean that they run any operations in a virtual world.
    Another type of virtual company is one where many or most of workers telecommute. They work from home offices or small local offices, or rented desks in shared offices. The tools? Telephones and email. (Before email — faxes and FedEx.) Then, further down the list, shared document platforms (like SharePont and Google apps). Then online meeting services — instant messaging, video chat, WebEx, GoToMeeting.
    The third kind of virtual company is one that exists to some degree inside a virtual world, with employees using avatars to attend meetings in virtual locations, and to serve clients inside these virtual locations. Some of these “virtual companies” are operated anonymously, with no real-world legal presence, This makes it very risky for customers to do business with them, especially for if significant amounts of money are involved.
    I agree that the rise of 3D immersive meeting platforms will accelerate the move towards virtual companies of the second type — geographically distributed companies staffed by telecommuters. 3D immersive meetings spaces allow the creation of “virtual watercoolers” — places where employees can hang out and gossip, develop a sense of solidarity with their colleagues, solve problems, find out about new opportunties within the company, and otherwise help build cohesion and responsiveness.
    –Maria Korolov
    Editor, Hypergrid Business

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