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Leadership / Workforce

Digital nomads are capitalising on the rise in remote work

The pandemic triggered a 50% surge in digital nomads in the US in 2020, offering a potential new source of technology talent.

The Covid-19 pandemic has rewritten the rules governing work, with employees choosing to ditch the office permanently in favour of remote work. While many are leaving cities to settle in more affordable and spacious locations, a small but growing number are taking the opportunity to become ‘digital nomads’, remote workers who travel the world. For employers, this tech-savvy community is a potential source of affordable digital skills – and governments are beginning to make it easier for digital nomads to work in their countries.

Interest in the digital nomad lifestyle has been growing steadily since 2014, based on the growth in Google searches for the phrase. But despite travel restrictions, the number of digital nomads in the US surged almost 50% in 2020 to 11 million, according to a survey by MBO partners, as a mass exodus from the office in 2020 revealed just how many jobs can be done remotely.

And while digital nomads are typically envisioned as freelance workers, in 2020 full-time employees became the majority, the MBO study found. “Independent workers already had substantially more location freedom than traditional job holders, so the impact of Covid-19 on where they worked was less pronounced,” the company’s report explains.

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As the name suggests, digital nomads are a tech-savvy group. Of the digital nomads surveyed by MBO Partners, 12% work in IT, more than any other profession. Seventy-one percent say using technology makes them more competitive in their work, compared to 43% of non-nomads, and they are more likely to describe themselves as technology early adopters.

Digital nomads could therefore be an affordable source of in-demand technology skills, especially as companies become more comfortable with employees working remotely.

“The Covid-19 pandemic has sped up the process of becoming location independent,” says Inge Hermann, head of international office at ROC van Amsterdam-Flevoland and co-author of a recent publication on digital nomadism. “Before, many companies, especially outside tech, were still hesitant about working remotely due to all sorts of issues – related to trust, technological [factors] or a lack of facilities there were available at home.”

Remote working after Covid-19

Not everyone is convinced the post-pandemic shift to remote work will usher in widespread digital nomadism. “While working from home has explodedmost companies post-pandemic are predicting employees will need to be in the office three days a week… [which] is far from the life of a digital nomad,” says Nicholas Bloom, professor of economics at Stanford University. You can’t move to Thailand, Mexico or the Shetlands with that.”

But the trend is sufficient to have inspired some governments to seek to attract digital nomads, in some cases to make up for lost tourism revenue. Estonia, for example, has introduced ‘digital nomad visas’, which allow workers to stay and work there for a year. Next month, a ‘digital nomad village’ on the Portuguese island of Madeira will welcome its first cohort of temporary residents.

Other hot spots for digital nomads include Chiang Mai, Lisbon, Medellín and Marrakech, says ROC van Amsterdam-Flevoland’s Hermann. “Those places are really good at offering the needed facilities in terms of quick broadband connections and they have an array of additional facilities for digital nomads, ranging from yoga classes to entrepreneurial workshops,” she says. “They offer all the amenities that digital nomads are looking for and at a much lower cost of living.”

High-quality internet connectivity is, of course, a basic necessity for digital nomads. Yet, 56 out of the 85 countries included in a new Digital Nomad Index, from communications provider CircleLoop, have average internet speeds of below 100mbps, a level needed to provide effective remote work, according to BCG. A quarter do not even meet the minimum requirement to support basic online working of 30mbps.

Canada identified as the top digital nomad hub

High-quality internet infrastructure, alongside digital government services, is the bedrock of Estonia’s strategy to attract digital nomads, explains Florian Marcus, digital transformation adviser at state-funded digitisation centre e-Estonia. “If you already have the digital building blocks in place for your own citizens, you can then open those sources up to external players through something like e-residency or digital nomad visas.”

Other important enabling factors include legal and tax provisions that allow international citizens to work in a country in the short to medium-term and the availability of cheap accommodation. Based on these and other criteria, the Digital Nomad Index identifies Canada as the ideal destination for digital nomads in the post-Covid-19 era.

Digital nomadism is likely to be one dimension of a broader global redistribution of work following the pandemic and the resulting growth in remote work. “Jobs that can be done remotely can also be done offshore,” economist Carl Benedikt Frey told Tech Monitor last year. “In many cases, remote work is only a transitional phase before the next wave of offshoring as companies take advantage of new technologies, like telepresence, and cheaper labour in places like India.”

But for the time being, there are still reasons why employers might favour digital nomads over conventional offshoring, Frey adds. “A more significant barrier to offshoring than digital infrastructure is language,” he says. “Machine translation is improving rapidly but language and culture matter enormously for trade in services.”

Home page photo by Rawiwano/Shutterstock.

Amy Borrett

Amy Borrett is the resident data journalist at Tech Monitor.