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Digitalization and telework trends
Growing telework trend or work from home itself got more popular as broadband internet expanded and companies were looking for new ways to minimize their expenses. Europe statistics show a steady increase in work from home practice in the 28 countries of the European Union. Over the last decade, the share of self-employed persons who report that they usually work from home has been consistently rising from 16.2% in 2009 to 19.4% in 2019. On the other hand, the share of employees who usually work remotely has risen slightly from 2.7% in 2009 to 3.2%. The Netherlands and Finland topped the list of EU Member States for remote-working, with 14.1% of employed people usually working from home in 2019. They were followed by Luxembourg and Austria (where 11.6% and 9.9% respectively usually worked from home). By contrast, the lowest rates of home-workers were reported in Bulgaria (0.5%), Romania (0.8%), Hungary (1.2%), Cyprus (1.3%), Croatia, and Greece (both 1.9%).
Even pre-pandemic trends indicated that European companies are increasingly offering their employees the option to work remotely, not only because of proven enhanced staff morale and productivity but also to attract and retain the most talented people.
Working habits according to 2020 Barometer
One of the most immediate and visible consequences of the pandemic were lockdown measures in different countries, leading to employees being isolated in their homes, instead of going to their workplace. According to a Eurofound e-survey among the EU population, over a third (37%) of those working in the EU began to telework as a result of the pandemic – over 30% in most Member States.
More people worked from home in the Nordic and Benelux countries than in southern or eastern Europe. In those countries where more people worked from home, fewer workers reported that their working time had decreased. The acceleration of the use of digital technology for remote work became a ‘mass experiment in teleworking’ – supported by teleconferencing and cloud-based file sharing. In this situation, the businesses and administrations that had the right technology and skills for teleworking had a crucial advantage over those who did not. At the same time, sales in hardware skyrocketed as digital infrastructures had to be updated at short notice. In a survey conducted among German enterprises, 55% of them confirmed that the pandemic had a positive influence on digital transformation. Businesses made full use of existing tools and equipment and upgraded the digital infrastructure for the future. This trend was most pronounced for the bigger enterprises, which have more spare financial capacities, as opposed to SMEs, which are already running behind in the digitalization process and struggling more with the financial consequences of the pandemic.
Transformation of urban, suburban, and rural landscapes
The much wider use of teleworking could spark long-term changes such as increasing the attractiveness of rural areas.
The very wide use of teleworking has shown that digital tools allow for more flexible working arrangements while still producing good results. Based on this experience, 64% of enterprises in Germany replied in a survey that they plan to have more frequent online meetings, 59% aim not to hold all conferences in person, and 61% will limit business travel in the long term. Out of all firms that offered teleworking during the pandemic, 71% plan to offer it in the future. Some businesses are likely to adopt a hybrid model which allows for a mix of remote and office-based work. More telework and less business travel will have consequences for cities and regions. In the cases where employees can work from home more often, suburban, and rural areas – where distances and commuting times tend to be longer – may become more attractive places to live.
Another digital transformation that could increase the attractiveness of non-urban areas is the development of e-health, which could alleviate the problem of access to healthcare being more difficult in less densely populated areas. The same applies to the development of e-governance and e-administration, that would greatly benefit rural areas where public services are traditionally scarcer.
Digitalization as an opportunity for well-connected rural regions and non-urban environments
In order to benefit from the opportunities linked to remote working, e-health, and e-governance, non-urban environments require viable digital infrastructure. The gap in digital infrastructure before the current health crisis between rural and urban regions was significant: 85% of urban households had access to high-speed internet (30 Mbps) as opposed to 56% of rural households. With better digital connectivity, it is mainly the urban centers that concentrate most ICT hubs and attract highly-skilled people.
Nevertheless, a large part of the rural working population might remain unaffected by the changes brought by more teleworking: it has been found that “urban populations have a significantly higher potential to telework than those in rural areas”. This means that even where good digital infrastructure is provided, it will still be the city populations that can benefit more from teleworking. Rural regions typically have a high share of workers in essential jobs (e.g. agriculture, food processing), which cannot be performed from home.
However, there are significant exceptions: some sparsely populated areas in Nordic states are high performers in terms of broadband access. The Baltic states also show how, by supporting the decentralization of production processes and the dematerialization of services, digital connectivity can greatly enhance the attractiveness of rural areas. Northwestern Ireland has successfully attracted tech professionals and tech firms through promoting Tech/Life balance, combining a high quality of life with tech jobs. This is facilitated through digital infrastructure and digital skills.
Despite potential demographic changes, it is most likely that cities remain attractive knowledge centers for exchanging ideas. Their dynamism is unchallenged: according to a report on the future of work, 48 dynamic cities including Amsterdam, Copenhagen, London, Madrid, Munich, and Paris, are home to only 20% of Europe’s population but accounted for 43% of GDP growth and 35% of job growth in the past years.
