Prolonged remote work is weighing on productivity and innovation

Contributors:

With the peak of the public health crisis in the past, prolonged remote work is showing evidence of negatively impacting productivity, as nonfarm business sector labor productivity has fallen 2.9% from peak levels over the past two quarters, driving growth since the outset of the pandemic below long-term averages.
Indicators of innovation similarly have peaked and are declining—newly issued patents over the past 12 months have declined 7.3% year-over-year and 11.1% from 2019 levels, providing strong evidence that companies across industries are submitting a waning volume of new patent applications.
Executives of large companies across industries have increasingly identified improving productivity as a primary means of combatting macroeconomic headwinds.
Negative trends in productivity and innovation may drive employers to increasingly mandate office attendance, as well as continued investment in upgraded office space.