The rise of peripheral cities

The model of distance work, even in the partial solution - the most likely - brings benefits and may influence the way of life of up to a third of the active population in Europe, which would represent, in the national case, about one million jobs of work.

The confinement of a large part of the populations of the developed world in the wake of the Covid-19 pandemic, forced a significant part of the business sector to look for alternatives that would allow it to maintain sufficient service levels to continue operating. This combination of extraordinary factors caused a visible rupture in the way in which the practice of remote work (or teleworking) was perceived and gave rise to a change that was more associated with certain business cultures in new sectors, especially those aimed at younger and better generations. prepared to deal with more innovative solutions in terms of the labor ecosystem.

At a time when return to work is very conditioned by the fact that there is still no vaccine or highly effective treatment, and by fears related to the potential for a second wave of the new coronavirus, remote work appears to be one of the changes that can have come to stay. In other words, it is very likely that labor standards may experience an evolution towards a normality of teleworking, at least partially. This new normality arose as a result of the need to control the health front, but it can find popularity in costs for companies, which will therefore need to have smaller office areas. Structural may also be the migratory effect from large cities to smaller, less urban peripheries, where lower housing costs and a focus on family quality of life can be decisive arguments.

The practice of remote work should persist and become more definitive ...

Evidence suggests that the confinement caused by the Covid-19 outbreak represented an accelerating event from what was already an ongoing trend. In the last decade, as can be seen in several surveys, namely the one that was produced by Flexjobs & Global Workplace Analytics and which shows that in the last 12 years the implementation of remote work practices has grown in the United States by about 159%, encompassing close to 4,7 million American workers, that is, 3,4% of the population of the largest world economy .

In many other developed markets, the weight of the solution is even more evident, with some European countries such as Ireland (20%), France (21%), Belgium (23%), the United Kingdom (25%), Denmark (27% ) and Sweden (34%), according to 2018 data from the Eurostat to record participation rates of workers on a remote basis sporadically or frequently above 20%. Even in Portugal, at the time of the study, there was a very clear trend, with around 15% of the active population involved in casual or regular solutions in remote work solutions. In the euro area overall, this same variable would be around 13%. In recent months, several observers have suggested that the use of teleworking has increased in the range of 40% to 50% in developed economies.

It is true that not all sectors can be converted to remote work, and that a significant part of the economy is outside the universe of eligible professions - about 60% of jobs in the United States are not possible to replicate remotely, according to with analysis work recent research and economist at the University of Chicago Brent Neiman on this topic. However, with regard to the eligible sectors and jobs (with emphasis on management, consultancy, banking and financial functions, areas of information technology, but also commercial functions and online sales businesses) the trend may have come to stay .

First of all, because the solution has advantages for employers and employees. In terms of earnings on the employers' side, they save on the cost of buildings, utilities and infrastructure, while employees save costs and travel time and can spend more time with the family and improve their quality of life. Although there may be some negative costs arising, for example, from the internal interaction of the teams that can result in productivity drops, many companies seem willing to explore the solution of incorporating remote work.

… But perhaps in a partial regime solution

It is likely, however, that the implementation is - at least initially - more based on a partial regime, a kind of part-time teleworking solution, not full-time. Recovering Eurostat data again on the penetration of remote working habits in Europe, we found that when we limit the analysis to the number of professionals who use telework as a standard solution, they represent only about 5% of the active population. Even in countries like Sweden, where the acceptance of telecommuting is very high, only 5% do so on a full-time basis. In reality, there is a factor of human interaction that is still valued by both employers and workers.

On the one hand, social interactions and maintaining the network of contacts are considered important in many professional functions; on the other hand, professionals with households with children at a young age, or with parents at an advanced age, and who can probably consider that the office offers a better working environment, recognize that the flexibility of remote work can offer advantages with regard to the support they can give in terms of family proximity. Finally, the very emotional balance that can come from a work format that gives flexibility, but is not based on social isolation, offers a combination of greater added value for many.

These inferences point to one of the challenges that companies that want to implement in the future greater penetration of remote work will have to face, which is to understand the situations in which their employees consider it advantageous to work remotely, and those in which this does not happen. That is, in the short term it is likely that the offices will continue to exist, but used in a new, more shared way, which allows companies to obtain savings with physical and logistical infrastructure.

New habits will tend to put less pressure on large urban centers

After a greater normalization of post-pandemic habits, it is certain that the number of adherents in a proportion of remote work will tend to be higher than that which we analyzed here in this essay. The high number of professionals who are quickly adapting to new habits, combined with the investment that companies have made in technology and productive adaptation for this cycle, create conditions for the available statistics to register a significant increase. In other words, it is likely that there will be a structural and permanent increase in remote work, especially with regard to those who will do it partly as a base format.

It would not be unreasonable to consider, by way of extrapolation, that the current figures for the most adapted countries (eg Sweden) may be the 'new normal', and that teleworking as a whole may be worth around one third on average in the more developed economies, such as European countries. In such a scenario, this would imply less commutability with regard to access to large urban centers, which may enhance relevant changes in the role of large cities over the next few years.

Faced with more flexible working conditions that allow, at least partially, to use their living area as an office, to which they add to a perception related to the risks of new similar pandemics, in which the viruses can spread more quickly in areas of higher population density - and in the case of Covid-19, the most critical areas have been cities of great density and dimension - it will not be surprising that many of the professionals who can work remotely consider stopping living in the epicenter of large areas urban areas.

The growth of remote work and the location of housing

It is true that many of the appeals of large cities are not exclusively related to the proximity of work, and they will undoubtedly continue to have their decisive value in the process of choosing a residence. But the location of housing is certainly a relevant variable, together with two other key variables, such as financial effort and existing options that offer quality cultural, sporting and leisure conditions and infrastructure.

The interception of these three balances can change significantly as the improvement of remote working conditions is gaining ground in the coming years, to the point of influencing the decision of many families to move from large cities to smaller cities on the peripheries, where they can benefit from much more affordable housing prices (in the case of the Lisbon metropolitan area they can be between three and five times smaller), and enjoy quality infrastructures. On the other hand, they can also allow a greater proximity to the ascendants in advanced age, which the mobility of today has ruled out, often for reasons of demanding and professional career.

It is certain that the big cities will continue to be very appealing, especially for what they offer in terms of conditions and leisure, security, culture and proximity to modern amenities. But incentives for change will become very visible in financial terms, especially for households with children and / or dependents, plus job flexibility that will allow additional financial savings related to transportation and food, as well as benefits from quality of life.

A small change in the behavior of this target group in terms of teleworking conditions (for example, working at home two or three days a week) will suffice for a change in migratory displacement from large cities to smaller and more peripheral cities, which they will be the ones that can reap the greatest benefits, given that, in many cases, they still have the necessary proximity and transport to major urban centers.

'Bottoms up': the rise of small towns, an engine of equity and investment

The changes and new habits resulting from remote work will have permanent implications for the lives of families in more developed countries, and Europe and Portugal will be no exception. The model of distance work, even if in the partial solution - the most likely - brings benefits and may influence the way of life of up to a third of the active population in Europe, which would represent, in the national case, about one million jobs of work. This change should serve to encourage the migration of families to more peripheral cities, but also more affordable. The economic implications of this trend are relevant, as this will immediately allow for greater equity and diversification in terms of regional economic growth.

Secondly, because it can create a competitive climate among these small cities to attract inhabitants, which, in turn, may encourage investment by municipalities in order to match a higher quality of life offer. These responses should arrive in the form of “green” urban investment - more cycling and leisure areas, less pollution, more planning - and also in terms of security and civil protection, as well as quality health and cultural infrastructures.

Finally, teleworking may well be a kind of quiet revolution at work, with the potential to restore balance in society, both in terms of proximity between the family and between small communities on the peripheries, which could become a new centrality.


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