Discover more from The Adaptive Economy Newsletter by Atlas Capital
🌏 The greatest human migration in history is happening now... 🛫
Is office is a legacy concept? The 3rd era of remote work & possibilities for your family + 3 companies enabling remote work in Asia today.
Sometimes I might write about stuff that is high up, a little too macro or untouchable. However today, there is something going on that touches all of us, so I had to research, write about it, and share you the predictions I got on what is there for the decade ahead.
Chunyun, or spring migration, is the world's largest annual human migration. It's triggered in part by millions of Chinese workers heading to their hometowns for the holidays during the Chinese new year. However, the migration lasts - only - for 40 days, usually from early February to mid-March, so we call this a seasonal migration and not the greatest migration in history we will talk about in detail here.
The great migration we are looking for is one that will not last for a few months but years, one that will not be singular to one country but that will be global, one that won’t be cultural but that will be forced by great, radical economical factors, without any escapes.
When in 2017, Accenture predicted 60% of the active workforce would be freelance by 2030, I was pretty skeptical about this idea that people would leave the comfort of a routine at the office and a great monthly stable paycheck.
That was until 2020…
And then, 2020. The year the world, my life, and your life changed completely.
This Chunyun migration was not only a beautiful cultural seasonal gathering, it was a time bomb that would accelerate the spread of a near-apocalyptic global pandemic changing profoundly the way we lived, not for few months for years, if not a decade to come.
Then the situation on remote work & freelancing changed. And another important variable came into the mix: In 2020, work had to be redefined with social distancing, aka without “offline offices”.
In the first half of 2020, and for the past 100 years, for the majority of us, humans in the workplace, the way we knew work before 2020 was waking up in our bedrooms, taking public transportation to go to the office, spending most of the day there on our office computer, meetings, talking with colleagues, then going back home for 2 hours of relaxing entertainment and then off to sleep for 8h until next day.
In the United States in February 2020, pre-pandemic, 8% of the workforce worked remotely. When the pandemic hit, that rose to 35% in May and bounced back to 24% in August. In Canada, in 2018 ~13% worked remotely, that grew to nearly 40% of the workforce working remotely in March 2020 [3,4]. In Europe, pre-pandemic, 5.4% of the workforce worked remotely, which rose to nearly 40% a result of the pandemic. We can assume there's growth in remote work in regions outside US/EU too.
In just a few months the amount of people working remotely ballooned to ~125 million people in North America (US, Canada) and Europe, or over 5 times the amount before the pandemic.
In the second half of 2020, and so far until now, for the majority of us, humans in the workplace, the way we work has been waking up in our bedrooms, switching on our home computer, still in our bedrooms, and getting on Zoom, the new workplace to talk with colleagues — still from the bedroom, or from the living room for the luckiest of us — and then back and forth from Zoom, emails, spreadsheets on our home computers until the end of the day — still at our bedroom.
Adults and kids grounded at home, for the past year and the years ahead, for most parts of the world, offices are forced to be closed, alongside most of the traditional “offline economic life”.
The new economic life 💻
And hence, a new type of economic life has risen: online. People went online to work, but also to buy their groceries, to school their kids, to hang out with friends, to play football (on their PS4), etc: Forced by the global lockdowns, post-2020, a new type of economical life, completely online has risen.
We entered a new paradigm of work & life
We have now entered a new wave of remote work.
Remote work has gone mainstream in 2020 and with that location independence suddenly has become a possibility — and sometimes a neccessity— for millions and soon maybe billions for workers.
Most people now are stuck in their home countries due to the pandemic closing borders. But once the pandemic ends or becomes controllable, and people can travel again the third wave will start. And I think that's 2021 alongside many of my friends and other influencers. Most people working remotely and doing it location independent will NOT be fast traveling from place to place, but instead will relocate longer-term to remote work destinations.
👋 Going to the office will be a legacy concept
We know that what tied people to places were: work, family and friends.
Historically work has been the primary tie though: it's how most people would meet their partners and it's where people make many of their friends.
Especially in the U.S., it's common to move to a different state just for work opportunities.
With remote work, the things remaining that tie us to a place are family and friends.
This year has been incredibly introspective for anyone. By boredom at home or simply by not having to spend time stuck in the traffic jam to go to work, most people realized the 24 hours we had available every day. People got more conscious of themselves, of their life goals, of the families of their priorities.
Before 2020, humans of the workplace were stuck in the traditional paradigm of the workplace, but this pandemic has forced us to reinvent the way we live, the way we work and many realized there might be better ways than returning to what we were doing before…
A survey by IBM discovered the majority does in fact:
54% of people working remotely now would like to keep doing so after the pandemic
75% would like to work remotely at least occasionally
On the other hand, most people interviewed were mentioning the benefits of remote work:
The daily commute to the office in the U.S. averages to almost one hour per day.
Traveling to meet people face-to-face is costly and time-consuming.
Being in open offices causes interruptions and makes real work difficult.
Going to the office requires living in urban areas, with a very high cost of living and reduced buying power.
Wouldn’t it be cool if we did not have to be stuck in traffic to work in crowded cities anymore? That is the promise the new paradigm of work is offering in the 2020s…
Hence it seems that office is a legacy concept and remote will be the new black for the active working population of developed countries in the decades ahead.
There were signals the past 5 years but they were hard to recognize:
Many companies targeting remote workers and digital nomads were started around 2014, notably Nomadlisthttps://nomadlist.io/ or Weworkremotely https://weworkremotely.com/,
Remote working travel groups like Remote Year raised millions and started offering the "digital nomad" experience as a tour package at $2,000/mo for Americans.
Companies like Buffer been exceeding performances with teams 100% remote while tools like Asana have been proving performances of decentralized team management, driving acceptance of remote workers for many years.
Coliving companies like Roam raised millions and started offering shared housing, essentially fancy hotels with coworking spaces built into them. The cost usually being high-priced at $100-$150/night or $3000-$4,500/mo.
WeWork famously raised billions of dollars to build a network of coworking spaces all around the world.
🛢 Remote work is giving back the (traveling time & buying power) humans won from machines.
Robert Merton Solow won the Nobel Prize for economic growth theory in the mid-’90s by showing that since the beginning of the industrial revolution, the main factors of productivity increase have been (1)better machines - accounting for 86% of the productivity (2)better performing workers - accounting for 14% of the productivity. As mentioned in my book, The Adaptive Economy, during the past 200 years, fossil fuels have liberated humans and enabled us to move economic life without physical labor. However, the offices, invented at the time were factories were still requiring physical labor and expanded at the age of traditional paper-based services, are today not relevant as the internet enable most services been delivered online, and we don’t walk to go to the factory we work at anymore.
However, for the past 50 years, even tho productivity increased so much it felt like the way we worked did not change. And that was wrong as the pandemic proved us: while many blue collars jobs disappeared, most of the white-collar jobs simply relocated from the office to the workers’ homes, with not too much difficulty.
It is now time for parents to spend more time with their families, for their kids to get out of the building and play with nature and for everyone to spend less time on their cars and more time living their lives.
🛒 Choosing a location like a product
It now seems that in 2021 and for the many years ahead, for anyone with the luxury of being remote worker with a stable consistent income, choosing a location could be more like picking a product in a shopping mall or deciding where to go for long (1+ years) holidays.
Where traditionally holiday destinations for many meant hanging on the beach to recover from the stress of office work. If work becomes more less stressful as it goes remote, destinations can become more meaningful and active too: e.g. sports or other activity destinations. That is what Nomadlist provides, one of the websites with great founders and great vision that inspired my to put together this article today (sharing a lot of their content in this blog).
🏛 Less crowded Cities can make more money on remote workers than tourists
“Next 30 years, States will compete to attract individual remote talents rather than trying to relocate companies.” Djoann Fal
Nacho Rodriguez is an entrepreneur who works with the government of the Spanish Canary Islands to attract remote workers. He told me it makes a lot more economic sense for governments to attract remote workers than tourists:
An average tourist in Europe goes on a trip for 5.2 nights and spends $70 per day or $356 per trip.
Meanwhile, a high-income tech worker from the U.S. or London makes ~$150,000/year. If they'd relocate to the Canary Islands and spend just half of that, that's $75k/year put into the local economy. That amount of money can create 3 local jobs at local average wages. Additionally, tax is paid on that income if they relocate.
The average tourist spending of $70/day, is $25,000/year. At an average tourist trip length of 5.2 nights, that means hosting 210 tourists makes the same amount of money for the Canary Islands as a single remote worker can bring in.
(Calculation: $70*365.25 days=$25,567/y; 1 trip is 5.2 days; 365.25 days / 5.2 days = 70 tourists/y; 1 remote worker spends 5o% of their income = $75,000/y; $75,000/y remote worker income / $25,567/y tourist income ~= 3; 3 * 7o tourists = 210 tourists)
Even if we estimate more conservatively, where a remote worker spends just $25,000/year, that's still the same amount of money as hosting 70 tourists.
The Canary Islands get 15 million visitors per year. They could make the same money with 100,000 to 200,000 remote workers there.
A remote worker can live more like a local as they stay in the place for months or years renting locally, instead of the short tourist staying in Airbnbs, resulting in less low-quality touristic areas. Caveat is areas will focus on foreign remote workers, which probably means more hipster-type areas. Regardless, places change for foreigners. It depends which way you prefer. Dubai, Costa Rica and many other countries already providing remote workers visas can be found here.
🌏 How many will actually relocate due to remote work?
We know that the majority of the mainstream will be able to work remotely now or in the next few years, but how many will actually use that to their benefit and relocate?
To get a possible idea of what the regular population will do once they can work remotely, we can look at what people who retire do. In the U.S., 3 million people retire per year and 1 million of them relocate once they hit retirement and are not tied to their work anymore, so about one-third.
But retirees might be more tied to a place: 1) they might need care from their kids and 2) they might've already built up life long communities around them, longer than their younger people in the middle of their careers.
Thanks to a recent Upwork study, we actually have some data on it now too:
"Anywhere from 14 to 23 million Americans are planning to move as a result of remote work. Combined with those who are moving regardless of remote work, near-term migration rates may be three to four times what they normally are." - Upwork study in October 2020
And that is just in USA. Please help me find more numbers for other regions!
There is a lot to write about this topic so I will stop here and let you know that GetLinks is working on a Future Of Work report with a big chapter on that topic (coming soon).
Companies enabling remote work today
GetLinks is the leading technology hiring platform in Asia, specifically focused on digital roles that are remote proof such as software engineers, digital marketeers, designers etc. As part of my contribution in GetLinks towards enabling remote work, we recently launch a service that provide Visa and Work permit for any digital talents willing to relocate to work in Asia tech industry. For any partnerships related to this remote topic, feel free to mail me.
Nomadlist is a great platform for remote workers and digital nomads to choose whre to live and to socialize with other remote workers, because working remote in a foreign country can be lonely sometimes. Founded in Thailand in 2014 when I was just starting GetLinks & got the chance to meet it’s founders around Pad Thai, in Bangkok, Nomadlist gather a community of 17,000 digital nomads around the world on their slack group. Great product that I highly recommend.
Iglu is an international network of companies and digital professionals cooperating remotely in IT and other professional services. Iglu enable remote workers to live and work in Thailand, Vietnam, Hong Kong, Estonia and UK and is supporting them to not only find a space to work, but also sleep and even find full time jobs. I have been greatly inspired by it’s founders as well so check this out and let me know if you want to be in touch.
While 2020 was the most volatile year in modern history, we would be mistaken to think that the disruption is over.
Rather, as we move into 2021 and beyond, the rate of disruption will potentially accelerate as the implications from 2020 play out across the next decade ahead. Its is really time to be adaptive… and read my book, The Adaptive Economy :)