The fifth edition in the Citi GPS Technology at Work series, A New World of Remote Work, looks at how COVID 19 fast-forwarded existing trends and quantifies the possible impact of these trends on the future of work.
The pandemic has accelerated the shift to remote working as the digital world is finally at a stage where it can support technology like virtual meetings. The digital revolution that enabled telework and the upcoming rollout of 5G will also enable telerobotics and augmented/virtual reality which will increase the amount of automation globally. The increase in virtual and telepresence also has the potential to provide alternative development paths for emerging markets, away from a manufacturing-led growth model (like China) more to a service-led growth model (like India).
“The COVID-19 pandemic has demonstrated that remote work is possible. We examined 483 occupations and found that 113 of them can be performed remotely.” Says Carl Benedikt Frey, Oxford Martin Citi Fellow, and Director of the Future of Work Programme at the Oxford Martin School. “Importantly though, those 113 occupations employ 52% of the U.S. workforce."
However, the shift to remote has also highlighted some inequalities in the workforce. Jobs that are able to be done remotely tend to be higher paying jobs and those that require physical presence tend to be lower paying/ lower education jobs. This means that the lockdowns resulting from the pandemic have disproportionately affected incomes for those in lower-paying jobs which couldn’t be switched to remote work. This mirrors research on skilled-biased technological change which showed the technology advances of the 20th century favoured skilled workers and is reflected in their higher wages.
“The pandemic brought about the biggest work experiment in history, accelerated digital trends, and has opened up new habits, possibilities, and thinking” suggests Robert Garlick, Head of EMEA Equity Research, adding that “the answer is likely for employers to give their talent the choice. Let them experiment and innovate. A combination of choice and technological process means we are unlikely to go back to norms at the start of this year/decade.”
If telework is the new normal, what are the implications to sectors, corporates and society? Whilst, Georgios Ierodiaconou, Director European Telecoms Research, highlights that the value of connectivity has increased during the pandemic and network infrastructure has enabled functions such as eHealth and Big Data & Monitoring. Walter H Pritchard, Managing Director US Software Research, sees the rapid shift to work from home has been a catalyst for next-generation software focused on productivity & collaboration.
Business travel is less controversial as new technology like virtual meetings will likely reduce the amount of face-to-face meetings. Mark Manduca, Associate Director of EMEA Research and Europe Airlines Analyst, forecast a 25% reduction in corporate travel going forward versus 2019 level and we note a 1% reduction in corporate travel volumes could have a 10% impact on airlines revenues.
Finally, but importantly, less cars commuting during peak hours and less office buildings requiring electricity means less CO2 in the air. Elizabeth Curmi, Director Sustainable Finance, Citi Global Insights, assesses that “using a scenario analysis, if 52% of U.S. workers worked just 1 day from home, annual CO2 reductions could be 20MT annually, a 2.5% decrease and the equivalent of taking 4.3 million cars off the road annually.”