Despite technology we are still stuck in a 19th century way of working

How did the workplace come to be the way it is? It's worth looking back a few centuries to see how we arrived at our current situation.

In pre-industrial Britain, most work was done in the home. Craftsmen such as spinners, weavers, glovers, tailors, leather workers and blacksmiths, had a dedicated room at home which functioned as a workshop, or had a workshop attached to their home premises and carried out their trade there. Goods were then taken to market once a week on market days. Road use therefore was confined to market days, and inter-city roads were used by the Crown to distribute mail and official dispatches, and by merchants who were travelling to larger towns to sell goods to a bigger market.

That ended with the Industrial Revolution. Large expensive machinery needed to be housed in large dedicated factories, and workers had to travel to the factory and machinery instead of having the machines located where they were – and the practice of travelling to work began. Even administrative work in the 19th century required clerks to travel to an office, because the papers needed to be kept in a secure place.

Some employers tried to ensure their employees lived close at hand by building worker cottages near the factory, such as the ones built by Cadburys in Bourneville, Birmingham. Others located in small towns which effectively became company towns.

As the 20th century progressed, this continued on a larger scale, except that travelling to work was done by car and train instead of by horse-drawn carriage or walking.

The pattern of how work was organised remained exactly the same as it was in the 19th century. Machinery was still housed in large factories, and for administrative work, large IBM computers were set up in the basements of office buildings, and valuable equipment like the latest word processors and later, the new personal computers, were still housed in a dedicated office building.

Technology has now changed but work practices have not

The advent of the internet and wifi, the use of encryption to protect documents, and the widespread purchase of home personal computers, laptops, smartphones and tablets should have changed work practices, but old habits die hard.

Some firms have made a partial adaptation. Take for example the London Stock Exchange. When open outcry ended in 1986 and the stock exchange moved to electronic trading, the number of people who needed to travel to the LSE pits and stand there shouting prices and making exotic hand signals to each other dropped to zero. The action moved to trading floors in each firm's offices, where people traded electronically using SETS, the LSE's electronic system.

There is no reason why these businesses can't take it a step further and allow their traders to trade from a desk at home. It is easy to set up the entire array of Bloomberg terminals in a person's home office and for the employee to patch in over the internet from home.

The nature of technology means people are easy to supervise even if they are at home – you can tell when people log in to the server, their line manager can see all their trades, everything is recorded and transparent. So why do firms cling to the outdated model of renting expensive offices in the City or Canary Wharf and forcing their employees to live in London and travel in the rush hour? The work can be easily be done by someone who lives cheaply in house overlooking a Welsh beach facing the Irish Sea. And having people trading remotely reduces the dangers of group think.

The insurance industry has also made a partial adaptation. They used to employ a bank of data entry typists, who would key in policy details into the mainframe from application forms sent in by their sales force. Now customers can key in their data directly from home, patching into the insurer's mainframe over the internet. Customers are trusted to apply for their policies from home - but the residual workforce is still supervised in a traditional office even though other administrative aspects of the business (such as claims handling) can also be done from home, with the employee logging into a work server over the internet, and using skype, email and telephones to communicate with each other.

The same applies to other industries – software developers and coders in general do not need to be in an office to work. They need a terminal, the ability to log into work servers from home, and peace and quiet so that they can think clearly while they problem solve and code.

Yet you have firms like Google locating their new premises in London, attracted by the “buzz” of the city. The conceit is that they want to feel like they are “creative” and part of the creative industries and hence need the “energy” of the metropolis - even though software businesses like this got their biggest breakthrough ideas when they were operating out of their parent's garages with just a PC and an internet connection. And genuinely creative types like artists and writers work from home.

Even call centres don't need to operate from an office. The technology already exists (and is used extensively by political parties who get volunteers to phone bank from home) to allow employees to handle customers while working remotely.

The whole thing is idiotic.

Here we are spending hours on congested roads, burning fuel that contributes to climate change - and all because large employers hate the idea of changing how the workplace is organised.