This article is part of a series in which OECD experts and thought leaders — from around the world and all parts of society — address the COVID-19 crisis, discussing and developing solutions now and for the future.
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The author of The God of Small Things, Arundhati Roy, has described how pandemics have historically forced humans to break with the past and imagine their world anew, how they are “a portal, a gateway between one world and the next”. Companies and organisations rapidly and radically adjusted how they worked during the pandemic: this empowered them to go about their business as before—and provided the tools to reimagine what other innovations may be possible. We are just at the beginning. COVID-19 is the gateway between the world we knew and the world we do not yet know.
The spike in remote working as mobility restrictions took hold during the first COVID-19 lockdowns in 2020 was unprecedented in scale. In Australia, France and the United Kingdom, nearly one in two employees worked remotely; in Japan, where there was no national lockdown, it was around one in four. However, the extent of remote working varied not only by geography, but also by sector, occupation, as well as company size. The digital transformation of the economy of course did not start with COVID-19. The pandemic acted as a catalyst for these trends, supercharging the shift in working patterns.
Digital technology passed its ultimate stress test with flying colours, but this supercharged paradigm shift has brought new challenges to light—of access and skills, of regulation and of infrastructure, to name but a few. It has also demonstrated the extent to which we were, and still are, prisoners of habit. Nonetheless, having caught a glimpse of a different way of working, we are now more open to exploring how to shape what it could look like.
In December 2021, the OECD Forum Virtual event, The New Geography of Work, brought together key global voices to discuss how remote working may help address geographical divides between people, businesses, cities, regions and countries. The rise of remote working may not only affect our approach to work; it could also reshape its very geography, and with it policies for national, regional and local development. The institutional, behavioural and sociological impact of the pandemic will be lasting. The choices governments make today, as Greece’s Minister of State & Digital Governance, Kyriakos Pierrakakis, explained, will matter far beyond COVID-19.
Rewatch the OECD Forum Virtual event The New Geography of Work below and visit the dedicated Forum Network space for more content
Reverse brain drain?
“Growing up in the southern regions of Italy, the dominant idea was that the only way to succeed was to leave”, remarked Elena Militello, President of South Working, a not-for-profit association that strives to improve the economy of southern and inner regions of Italy by increasing the number of people able to work from there remotely. The richer and more industrialised north of Italy, as well as other countries, have historically been a magnet for talent from the south. As lockdowns took hold, however, many Italian expats pursuing careers abroad found themselves isolated. This planted the seed for an idea: to tap into their desire—and newfound ability—to perform their jobs from anywhere, and allow them to give back to areas with less access to economic opportunities in the process.
Growing up in the southern regions of Italy, the dominant idea was that the only way to succeed was to leave.
– Elena Militello, Founder and President, South Working
Profile: South Working
As lockdowns took hold, many Italian expats found themselves pursuing careers, but far from home—and therefore feeling alone. This planted the seed for the idea to create South Working, with the goal to tap into the desire and will to give back to the places people have moved away from, drawing on their skills, talent and time.
South Working activities include forging stronger links with companies to advocate for the benefits of being located in the south, nurturing stronger bonds between prominent employees and their employers and creating mentorship programmes for those at greatest risk of joblessness with the goal of bringing back human capital to these regions. With membership at 10,000, it has also worked with local schools to inform young people about the different types of work they can do and the skills in demand in the future. It is a movement that sets in motion the potential for a “reverse brain drain”.
South Working has identified two broad challenges for this new trend. First, there is a need for quality infrastructure, including not only good digital connections, but also transport, which is vital for workers to get to the office when needed; second, the need to create a sense of community—for example, addressing isolation among Italy’s network of remote workers and encouraging reciprocal exchanges with the local inhabitants.
“With the pandemic, there was an opportunity to do things differently, to rebalance these digital divides”, explained Elena Militello, President of South Working. “Young professionals wanted to make a positive situation out of a negative one. They created an advocacy movement for remote work in disadvantaged areas”.
As Lamia Kamal-Chaoui, Director of the OECD Centre for Entrepreneurship, SMEs, Regions and Cities noted, remote working has indeed demonstrated to employer and employee alike that some tasks could be carried out from any location. These new possibilities may have set in train a “reverse brain drain”: if the network effects of physical proximity are less important than before, it is not surprising to see the highly educated move to destinations of their choosing, including back to their home countries. Those countries that had already started to offer digital nomad visas look especially prescient. Such visas give the right to work for up to a year, with fiscal benefits and access to logistical support. Canada, Chile, Costa Rica, Estonia, Germany, Norway and the United Arab Emirates are some of the countries at the forefront of such developments.
A number of companies are already pioneering new models more attuned to asynchronous workflows and decentralised workforces (see Profile: Arup’s seven-day week pilot). As Arup’s Human Resources Director Diane Thornhill explained, this not only allows their employees to benefit from more flexible working arrangements that fit better with family, care and other obligations, but it also helps companies cut costs—notably in real estate—and tap into a larger, more diverse, global talent pool. Physical offices will remain important to nurture organisational culture, allow for in-person learning especially for younger workers, and to boost innovation and collaboration. These perspectives must inform how we design our new world of (remote) work, including office, housing and even urban space.
Profile: Arup’s seven-day week pilot
“In May 2021 Arup ran the pilot project ‘Work Unbound’, which provided flexibility for employees to decide how, where and when they work”, explained Diane Thornhill, Human Resources Director (UK, Europe, Middle East and Africa) at Arup, a London-based engineering and design firm.
Thornhill explained the importance of keeping the project anchored on three core principles, namely delivering for clients; “membership” of the firm; and taking account of what each worker wants as member of the firm.
The result? A hybrid work model that allows employees to choose the hours and days that suit them best across all seven days of the week, and at home or in the office as required. Moreover, recognising the diverse needs of employee and employer alike was an essential part of the discovery process.
The importance of collaboration and knowledge sharing at Arup can be a challenge, according to Thornhill, so the firm does ask employees to go to office to connect when needed—for example, for in-person learning, and innovation and collaboration—but not on a five-day basis. Similarly, recognising that staff in their early careers have different needs and seek more office time to make connections and build relationships for career advancement is also important.
“Knowing the company was embracing flexibility resulted in a feeling of empowerment among employees”, said Thornhill. “Ninety-five percent of Arup’s members said they felt like they had a choice in how they worked”.
That is not to say, however, that remote working will automatically usher in opportunities for remote areas. In fact, the OECD finds that remote work—at least initially—reinforced pre-existing divides. Remote working has opened opportunities for cities and regions previously suffering from a lack of attractiveness, but it has also brought new challenges. OECD data indicates that the share of jobs able to shift to remote working arrangements was 13 percentage points higher in cities than in rural areas. Furthermore, only 56% of rural households had access to fixed broadband with speeds of 30 megabytes per second. This figure is far below the 85% seen in urban households. In sum, remote working is unlikely to prove beneficial for places farther away without well-designed policy interventions and significant investment in digital and physical infrastructure.
Hardware + Software = Liveability
“Infrastructure is the ‘software’ complementing the physical location that is the hardware”, stressed Minister Pierrakakis. How appealing a location is to workers depends on both. A reorientation of public services from state-centric to citizen-centric could have significant implications for how we think about public policy design and resource allocation between digital public services and quality infrastructure. The latter encompasses not only telecommunications networks, but also transport, schools and hospitals. All require investment.
Infrastructure is the ‘software’ complementing the physical location that is the hardware.
– Kyriakos Pierrakakis, Minister of State & Digital Governance, Greece
Elena Militello, President of South Working, mentioned her group’s advocacy for better digital and transport infrastructure, but also emphasised the need for co-working spaces and instilling a sense of community. And whilst the managing director of Estonia's e-Residency programme, Lauri Haav, argued that “competition is not so much between rural and urban areas, but rather between cities”, he predicted cities and even countries would in future compete for remote workers on the basis of the quality of their services.
The poll conducted during the event certainly echoed this point, with no less than 64.8% of participants declaring that a better quality of life would be the main criteria that would drive their decision to “work from anywhere”, far beyond the presence of friends and family (32.1%), the affordability of the locality (13.8%), digital connectivity (14.5%) or the opportunity to join a new community (4.4%).
Haav drew on Estonia’s pioneering experience in providing public services to businesses and citizens beyond its borders to emphasize another critical component of attractiveness in the 21st century: the digitalisation of public services. With workers now having the flexibility to choose where they (physically) live and where they (virtually) work, the quality of digital public service provision is becoming a vital metric for countries and citizens alike. With the unprecedented shift to remote work, the coming decades may therefore see a greater weighting being attached to core factors such as quality of life, but governments will also need to up their game by moving from traditional state-centric services towards citizen-centric ones, which cater to the needs of local citizens and remote workers alike.
“The key challenge for national governments is to adapt regional policies to ensure that competition between regions creates win-win situations,” said Kamal-Chaoui. These include improving digital skills among disadvantaged groups, reducing the digital divide between small and large firms and managing development in key areas—for example, integrating digital nomads in ageing communities, while also managing environmental pressures. “Public policies will shape the choice people make,” she added. “National governments have a vital role to play. They cannot simply let local governments shoulder these responsibilities alone as not all localities are equipped to provide such services.”
The key challenge for national governments is to adapt regional policies to ensure that competition between regions creates win-win situations.
– Lamia Kamal-Chaoui, Director of the OECD Centre for Entrepreneurship, SMEs, Regions and Cities
A brave new world
In sum, the regulatory framework around the new geography of work will play a vital role in determining its contours. As Minister Pierrakakis noted, “technology by itself is neutral, but the way it is deployed is not. The role of governments and the OECD is to limit the negative impacts while furthering the positive impacts of the new geography of work”. Policy makers must take into consideration the (so far uncertain) effects on employment and inequality—including gender, access to education and skills. As in other policy spheres, the challenges brought about by COVID-19 serve as both a lesson and an opportunity to design better policies for better lives. To do so, new “value-based regulatory frameworks” will be essential, remarked the Greek Minister of State and Digital Governance.
A yawning digital divide is a risk that governments will have to tackle. Closing skills gaps is of vital public interest. There are the emerging technological and geographical challenges already discussed, coupled with the demographic challenges we are all familiar with. Just as the phases of life when all of us focus on education, work or retirement are merging, the distinction between physical work and digital work is also starting to vanish. Reskilling to prepare for this new world of work and life will be vital for younger and older generations alike. Education will be life-long and education systems will have to evolve as working life evolves.
Uncertainty about this brave new world is a source of anxiety. But it is also an opportunity to rethink and re-evaluate why, how and even when we work.
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