Was a term coined by futurist Alvin Toffler, in his book The Third Wave (1980). He created the term when he discussed the potential for radical societal change, due to the advent of the networked PC. He thought that society would be made stronger as people moved to working at home instead of at an office. He was describing what would later be called "telecommuting".

He used the word "cottage", because it had been used before in a parallel way at the beginning of the Industrial Revolution. During that time of technological advancement, women and their children often worked out of the home and spawned "cottage industries".