What will change when people can live where they want instead of where they work?

Remote work has skyrocketed during the pandemic, and there are clear indications that most of the Nordic workforce would like to continue working remotely to some degree. The first Nordregio Forum 2021 session discussed how this sudden shift would affect our cities and regions. Will it become more popular to live outside the cities, and how should regions and rural communities embrace the opportunities of the hybrid work culture?

Reimagining regional labour markets

While technically possible for decades, remote work only really took off during the pandemic. Millions of people have become comfortable with digital work interactions, and numerous second homes across the Nordic Region have served as second offices. This newfound flexibility has already inspired some people to move out of the cities to suburban or rural regions offering lower house prices and more space.

“The question is how this trend of remote work will impact our different regions,” said co-moderator Linda Randall, Senior Researcher Advisor at Nordregio. “Will we see a greater trend toward localisation in our cities, and could this be an opportunity for rural municipalities struggling with depopulation and ageing and the negative consequences associated with that? And on a larger scale, will we see even a reimagining of regional labour markets and the distribution of competencies?”

Remote work as part of the aspirational lifestyle

Entrepreneur Maria Svensson Wiklander was the event’s first keynote speaker. She is co-founder of Remote Lab, a Swedish knowledge and development node for the future of remote work that opened its doors in August 2021.

“We identified a knowledge gap, not only in organisations but also with the individual workers,” says Wiklander. She bases most of her work on the remote-first philosophy, which promotes working remotely as the primary option for all employees. “Our vision today is to help people, organisations and society become more remote-friendly.”

Remote Lab is involved in various Swedish and international research initiatives into the green transition and the future of remote work. Surveys show that more than nine out of ten Swedish workers wish to continue working from a distance, also after the pandemic. Meanwhile, more than 70 per cent of employers want their staff to come back to the office as soon as possible. Also, the State is struggling to keep up, according to Wiklander.

“We need an active State that tilts the playing field through incentives and investments, supporting the emergence of what’s been called the aspirational good life, of which remote work is part. We already see this at the top of the income and education scales, but also among young people who value autonomy and flexibility over salary and career paths.”

Significant differences across OECD countries and regions

The OECD has conducted substantial research into the regional aspects of remote work, including the availability of high-speed internet connections, changes in the use of office space and urban infrastructure, and movements between regions. According to Lamia Kamal-Chaoui, Director of the OECD Centre for Entrepreneurship, SMEs, Regions and Cities, the transition to remote work has neither been smooth nor equal.

“The first clear and immediate impact of the shift to remote work has been to exacerbate many of the existing disparities in employment opportunities,” Kamal-Chaoui said in her presentation. In 2015, only nine per cent of workers in the EU had worked from a distance. By 2020, the share had surged to nearly 40 per cent, and even up to 60 per cent in some countries. “However, the share of jobs amenable for remote work can vary by 15-20 percentage points across regions within countries. Governments at all levels must act up to tackle the digital divide and the inequalities that the pandemic has exacerbated.”

Changing demography due to remote work?

With the increase in remote work, researchers have registered some rather remarkable changes to the dominating demographic trends in the Nordics. Maria Svensson Wiklander highlighted that people have started moving out of Sweden’s larger cities to a greater extent, primarily to commuting municipalities near the larger cities, smaller urban areas, and rural municipalities with tourism industries.

A similar trend is emerging in Finland. As part of an extensive study of multilocality, Sustainable multilocal living – now and in 2030, researchers have examined the internal migration between Finnish municipalities. In 2021, for the first time in decades, more people have moved from Helsinki, Espoo and Vantaa to other municipalities than the other way around.

“That’s the suburbanisation,” says Janne Antikainen, Development Director of regional development consultancy MDI Public. “People are moving to surrounding municipalities with good connections and commuting networks. Other winners include university cities and municipalities with strong educational institutions. The middle-sized cities are attracting people, as well as rural areas with many second homes or tourist attractions.”

Read more here: Nordic countries adapt to remote work and multilocality

Despite these changes, Lamia Kamal-Chaoui and her colleagues at the OECD consider a large-scale exodus from the cities highly unlikely.

“We do, however, anticipate a long-term reduction in workers’ physical presence in the city centres and fewer inflows as people can access city jobs without having to move there permanently. Considering that, medium-sized cities and towns should grasp the opportunity to improve connectivity and amenities to attract and retain workers.”

Nordic tour of remote work

Nordregio Forum’s traditional Nordic tour featured introductions of some of the most ambitious remote work policy initiatives in the Region and stories about local challenges that have arisen from the pandemic.

Steffen Damsgaard, Chair of the Danish National Council of Rural Districts, gave an overview of the development in Denmark during the pandemic, where there are also signs of more people moving out of the cities to enjoy a lifestyle closer to nature. Furthermore, Damsgaard reflected on some of the policy changes that would allow different regions to make the most of remote work’s rural and regional potentials.

Hólmfríður Sveinsdóttir, Senior Advisor at the Icelandic Ministry of Transport and Local Government, introduced Iceland’s ambitious remote work recruitment strategy. The government aims to ensure that by 2024, at least ten per cent of all government jobs will be advertised as location independent.  

Read more here: Nordic countries adapt to remote work and multilocality.

Research Professor Tor Arnesen then touched upon the challenges of public service provision in rural areas with many second homes. Lastly, Kate Plaskonis, Adviser at Greater Copenhagen, talked about pandemic-related taxation issues for employers and employees in the cross-border region of Eastern Denmark and Southern Sweden.

Read more about these issues here: Still some structural obstacles to remote work

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