The Rise of Remote Work
Reshaping Education, Business, and Development
The rise of remote work, fuelled by technological advancements, presents a global opportunity for development. While the COVID-19 pandemic accelerated its adoption, the groundwork was laid over the past 30 years. This shift allows individuals to access education and jobs regardless of location, empowering those without traditional access. Developing nations can capitalize by fostering entrepreneurial ecosystems to move beyond just outsourced work. Challenges like policy reform and potential social disruption exist, but the real game-changer is the promise of Artificial Intelligence (AI) advancements to streamline remote work’s benefits further. This exciting prospect for technology investors opens up a world of possibilities. Will governments seize this chance to drive growth and inclusivity? Charles Ferguson, a technology investor and policy analyst who is the Director of the Oscar-winning documentary Inside Job, argues in an article exclusively sent to EBR by PS.
Over the past 30 years, a revolutionary opportunity for human development and economic growth has emerged. Modern information technology has the potential to enable large-scale remote work anywhere on the planet and to help countries gradually create entire technology sectors and ecosystems.
Remote work has the potential to bridge the digital divide, providing opportunities to those who lack access to traditional schools or workplaces. This potential, well understood within the technology sector, needs to be appreciated more broadly. It can empower individuals in developing nations, enabling them to access education and jobs regardless of geographical location.
For most people in developed countries, the COVID-19 pandemic in 2020 triggered the remote-work revolution. But an even broader revolution – still in its infancy – has been gathering force since the rise of commercial internet services in the mid-1990s.
This revolution was only sometimes evident because technology still heavily favoured geographical co-location and concentration for the first 20 years of the Internet revolution. Telecommunications bandwidth did not yet support high-quality videoconferencing, and computer hardware still needed to be located near its users (“on-prem”). Educational and business activity, therefore, still favoured physical proximity to universities, corporate campuses, office buildings, research and development facilities, computer systems, and even factories.
Over time, these requirements loosened. Cloud services removed the need for on-premises computer hardware and its associated costs. Faster broadband services paved the way for high-quality global videoconferencing and e-commerce systems, and enterprise SaaS (software as a service) platforms enabled remote job searches, hiring, advertising, sales, payments, and purchasing. Mobile and satellite networks then extended internet connectivity to rural areas, where online education services allowed for remote learning of English, software engineering, and many other subjects.
Gradually, physical proximity became less critical. Initially, this change was evident in the rise of Indian outsourcing industries (call centres, software) and the first significant startup ecosystem to emerge outside the United States, namely in Israel. Others (including Taiwan, China, the Philippines, and Ukraine) developed outsourcing sectors, startup ecosystems, or both. Even in countries without technology ecosystems, many intelligent, energetic young people worldwide learned English and coding, began working for Western companies, and started their own.
However, until COVID-19, various cultural and psychological barriers still prevented the full exploitation of remote work. The pandemic, however, created an immediate, urgent need for it. In the first half of 2020, the share of US white-collar personnel working remotely skyrocketed from 6% to 65%. Suddenly, even startups – previously considered physical proximity essential – began hiring software engineers from Argentina to Ukraine wherever they could find them. I speak from experience. The people I hired during this period mainly had learned English and coding online, working for managers they had never met in person.
Intelligent, entrepreneurial individuals now can learn from almost anywhere through what has become a highly developed online infrastructure, much of it free, provided by the likes of Khan Academy, YouTube users, LinkedIn Learning (formerly Lynda.com), Udacity (now owned by Accenture), and various universities (such as MIT’s OpenCourseWare). There is now a highly developed infrastructure for global remote work (think Stripe Atlas, Carta, Deel, AngelList), including using “stablecoins” to pay remote workers even in countries with volatile or nonconvertible currencies.
Such tools are helping people worldwide pursue the traditional Silicon Valley career path. After learning to code, they can advance through working for a technology company, joining a startup, founding a startup, and eventually becoming an angel investor or venture capitalist. However, this process could go much further, potentially benefiting many countries’ educational, economic, and human development, particularly for traditionally disenfranchised groups (people experiencing poverty, women, rural communities, and people lacking formal education).
To seize the opportunity presented by remote work, developing countries need to move beyond being a site for outsourced work and create entire entrepreneurial ecosystems. This includes startups, incubators, venture capital, and public markets. In many cases, the principal bottleneck is not money, but policy. The most urgent policy challenges vary according to nationally specific conditions – income and poverty levels, urbanization, telecommunications infrastructure, educational levels, discrimination against women and minorities, degree of protection afforded to incumbent industries, currency controls, immigration policy, and the legal and tax environment. Addressing these policy challenges is crucial to fully realizing the potential of remote work for economic growth and inclusivity.
As with every technological revolution, this one also brings risks. Given that traditional in-person education is one of only a few institutions that still promote social cohesion in the Internet age, its disruption could have undesirable implications. Similarly, Silicon Valley engineers already fear losing their jobs to foreign workers; such job losses, if they occur on a large scale, could have profound social and political consequences.
These are legitimate concerns. However, many others in the technology world, including me, believe that remote work represents an opportunity for global development that dwarfs the importance of traditional development aid. Moreover, its importance is growing because artificial intelligence will amplify both the problems and the opportunities.
Consider the example of learning English, which is currently essential since it is the global language of science, information technology, and business. However, this skill may no longer be necessary within five or ten years because AI will enable universal real-time translation, subtitling, and speech interpretation.
Similarly, AI will soon make it far easier to create legal documents for incorporation, hiring, and contracting, sharply reducing the real (appropriate) barriers to entrepreneurship. In the process, it may also threaten the entrenched positions of incumbents that currently have a chokehold on many national economies.
Will governments seize this opportunity? If they do, will they move wisely to mitigate the dangers of the remote-work revolution? While some appear well-positioned for the moment, others still need to be. They need to move quickly to join a revolution that has already built up a powerful head of steam.
13th Year • November 2024 • No. 135