What Remote Work Can Do for Global Development

Nov 9 , 2024
By Charles Ferguson

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A revolutionary opportunity for human development and economic growth has been emerging over the past 30 years. Modern information technology has the potential to enable large-scale remote work anywhere on the planet, and also to help countries gradually create entire technology sectors and ecosystems.

Much educational and economic activity can now be decoupled from a physical location, providing opportunities to those who lack access to traditional schools or workplaces. While this opportunity is well understood within the technology sector, it is insufficiently appreciated more broadly. For most people in developed countries, the remote-work revolution was triggered by the COVID-19 pandemic in 2020. 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 not immediately evident because, for the first 20 years of the internet revolution, technology still heavily favoured geographical co-location and concentration. Telecommunications bandwidth did not yet support high-quality videoconferencing, and computer hardware still needed to be located near its users. 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 important. Initially, this change was evident in the rise of Indian outsourcing industries (call centers, software), and in the first major startup ecosystem to emerge outside of the United States, namely Israel. In time, others (including Taiwan, China, the Philippines, and Ukraine) also developed outsourcing sectors, startup ecosystems, or both. Even in countries without technology ecosystems, many smart and energetic young people worldwide learned English and coding, began working for Western companies, and started their own.

But, until COVID-19, a variety of 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 six percent to 65pc. 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 had mostly learned English and coding online, working for managers they had never met in person.

Smart and 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 also a highly developed infrastructure for global remote work (think Stripe Atlas, Carta, Deel, AngelList), including the use of "stablecoins" to pay remote workers even in countries with volatile or nonconvertible currencies.

Such tools are helping people around the world 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.

But this process could go much further, with potentially profound benefits for many countries’ educational, economic, and human development, particularly for traditionally disenfranchised groups (the poor, women, rural communities, and people lacking formal education).

To seize this opportunity, however, developing countries need to move from being merely a site for outsourced work to developing a full entrepreneurial ecosystem that includes startups, incubators, venture capital, and public markets. In many cases, the principal bottleneck is policy, not money. But, the most urgent policy challenges vary according to nationally specific conditions – income and poverty levels, urbanisation, 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.

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. But, I and many others in the technology world believe that remote work represents an opportunity for global development that dwarfs the importance of traditional development aid. Its importance is about to grow, because artificial intelligence will amplify both the problems and the opportunities.  Consider the example of learning English, currently essential since it is the global language of science, information technology, and business. Within five or 10 years, this skill may no longer be necessary, because AI will enable universal real-time translation, subtitling, and speech interpretation.

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 are not. They will need to move quickly to join a revolution that already has built up a powerful head of steam.

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PUBLISHED ON Nov 09,2024 [ VOL 25 , NO 1280]

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