Remote work and related mobility are on the rise – and the role of the state is changing

The coronavirus pandemic has increased digital nomadism, which can bring about new forms of inequality in professional life.

As a phenomenon, digital nomadism is defined as mobility as a way of life that involves telecommuting. In this context, digital nomads are defined as individuals who have adopted a mobile lifestyle and who are usually able to work remotely thanks to digitalisation.

Academy of Finland Research Fellow Mari Toivanen from the University of Helsinki’s Swedish School of Social Science started planning her research project called Digital nomadism: Life-style mobilities, nation-state and the mobile subject before she had even heard about the novel coronavirus. In the project, Toivanen examines the experiences of digital nomads as well as the role of the state in the global world and in relation to a mobile lifestyle.

Then the pandemic hit, affecting the conduct of research, the research design and the topic under consideration. Toivanen had to postpone interview-related trips, change the target countries and keep up with the rapidly changing global phenomenon. Before the pandemic, certain professional fields had better opportunities for telecommuting than others.

“The coronavirus pandemic changed everything in one go, causing many people to become well versed in telecommuting practices. This made it possible for more people to consider leaving their physical workplace to work,” says Toivanen.

New destination countries

Digital nomads are usually citizens of countries in the Global North, with powerful passports that allow them to travel without a visa to most countries in the world. In contrast, the destination countries of digital nomads are often in the Global South where the general level of prices is considerably lower and where digital nomads have more purchasing power.

Due to the coronavirus pandemic and telecommuting becoming more widespread, this way of life has become possible for many people.

“At least temporarily. Then again, there have been restrictions on mobility. To a certain degree, the destination countries have changed,” Toivanen says.

“I’ve observed that there are a lot of digital nomads in southern Europe at the moment who, in normal circumstances, would be spending time in Southeast Asia at this time of the year. In other words, they want to stay within the EU.”

Multidimensional inequality

It is easy to perceive digital nomads as being in a privileged position. They have the opportunity to travel and work wherever they wish and, for example, enjoy the summer all year long. The pandemic is also likely to boost existing inequalities related to international mobility. Citizens of the Global North, who are more able to be mobile than those living in the Global South, will also be able to move more freely thanks to COVID-19 passports.

“However, the interview data provide a slightly more multidimensional picture of inequality. Digital nomads are primarily in fixed-term employment as, for example, freelancers, translators and in the IT sector. In the long run, fixed-term employment contracts can make their careers fragmented,” Toivanen says.

Another challenge that emerged from the interviews conducted by Toivanen is related to the fact that employees’ rights are tied to services. Services are provided within the territories of specific states. In welfare states, such as Finland, examples of these include social welfare and healthcare services. These are usually tied to citizenship or residence in state territory.

“When I asked the digital nomads in my study about these challenges, many of them highlighted issues relating to, for instance, taxation and healthcare, or the receipt of pension benefits at a later stage.”

A new role for the state

Many digital nomads are moving in a grey area. Officially, their place of residence can be registered as that of their parents’ address, while unofficially they may be on the other side of the world with their computer. That is to say, many have no official address in the region where they are living that would entitle them to the services provided there. Now, both states and private service providers have woken up to this.

“States have begun to offer digital residency options. This is a really interesting change,” Toivanen says.

For example, Estonia is one of the first countries to offer e-residency. This means that digital services pertaining to, among other things, taxation and banking are offered to e-residents without an obligation to reside in the country, study the language, complete military service, if any, or undertake other duties related to citizenship. In January 2022, there were almost 89,000 e-residents in Estonia, and the number is constantly rising.

“States have started to respond to this kind of need by offering digital nomads services that may consequently prevent the development of inequality.”

In return, Estonia gains in tax revenue.

“This speaks of a change in the relationship between the state and the citizen. Whereas previously citizenship was defined through belonging to a people in terms of an ethnonationalist definition, states are now increasingly becoming service providers. A customer relationship with regard to citizenship is evolving,” Toivanen says.

A rapidly developing global phenomenon

Before the pandemic, in 2019, Toivanen interviewed digital nomads in Thailand. Due to the pandemic, she had to postpone the next round of interviews for a year, as well as change the target country. Her latest interview data is from Palma de Mallorca, collected during the pandemic. Toivanen has another interview trip planned for the spring.

“It’s really exciting to observe a phenomenon that is moving forward at an enormous pace and to be at its core, asking people about their experiences and observing what is taking place.”

“I think we’ve made a decade’s worth of progress in one go in the development of telecommuting. The pandemic’s impact continues to be simply immense. Many of the interviewees adopted the digital nomad lifestyle during the pandemic.”

According to one estimate, there were 35 million digital nomads in the world last year, a number of people that roughly corresponds to the population of Canada. In the United States, the number of digital nomads has been estimated to have grown from 7 million to nearly 11 million during the pandemic, from 2019 to 2020.

“It’s an enormously rapid change that we are currently witnessing in terms of work and mobility, and their interconnections. We may not yet even know what new forms of inequality it may bring about,” Toivanen points out.

Mari Toivanen is an Academy of Finland research fellow at the Centre for Research on Ethnic Relations and Nationalism (CEREN) at Swedish School of Social Science. Her research focuses on mobility, the changing nature of professional life, digitalisation and the role of the nation state in the era of globalisation.