29 June 2021

On prioritizing digital communications infrastructure, for digital nomads and new economic promise

by James Ellsmoor / in Op-ed

For SIDS and LDCs, tapping into the remote working revolution requires internet infrastructure

In 2020, Vanuatu became one of only six nations to graduate from the least developed country (LDC) category, joining Botswana, Cabo Verde, the Maldives, Samoa and Equatorial Guinea. Four more are expected to follow suit by the end of the decade.

Tourism has traditionally been an important tool for many of these countries to develop their economies and bring in foreign revenue. But, as Small Island Developing States (SIDS) have discovered, dependence on tourism can be a double-edged sword, and many of their economies have been seriously affected during the pandemic.

LDCs and recent graduates can learn from some SIDS attempts to tap into the growing opportunity from the number of persons seeking to work remotely. Island nations including Dominica have paved the way for emerging economies by launching a variety of schemes to attract remote workers, including new visa categories and targeted marketing efforts. This has been a vital step in recovering some of the income lost due to the dearth of holidaymakers.

To both attract this new form of visitor and encourage local workers to take up new opportunities, communications infrastructure is more important than ever. Given that the new remote worker economy usually requires a strong and stable internet connection, it can present a particular barrier for SIDS and LDCs to benefit from this new growth opportunity.

But who exactly are these remote workers and digital nomads and how can countries take advantage of the new remote work revolution?

Changing work trends

Already on the rise prior to the pandemic, working remotely has rapidly become more popular as people and companies have realised that current technology is sufficient to keep the world - and the workforce - connected without a physical centralized working hub. As such, digital nomads have sought to find places to work from and many governments are actively creating opportunities to attract them. From creating specialized visas and high-tech hubs in idyllic locations, among other benefits, governments are trying to capitalize on their assets and promote themselves as remote work destinations.

Herein lie the opportunities for LDCs and recent graduates. Some SIDS have become pioneers in the remote work field and have laid the groundwork for other nations to develop their own programmes aimed at attracting digital nomads.

While larger developed economies such as Estonia and Ireland have invested in finding ways of bringing in remote workers, SIDS like Barbados and Dominica have also emerged as places of interest as a result of their locations, natural environments, lower cost of living and dedicated visa programmes. These programmes have a high application cost, and, if approved, remote workers can benefit from the opportunity to settle on the islands for a year or more without worrying about moving their tax residency from their country of origin while also enjoying the benefits of local health services and schools.

The Barbados “Welcome Stamp” visa, which was created to attract digital nomads, has generated considerable interest globally. Barbados Prime Minister Mia Amor Mottley stated that the government introduced the visa to “provide workers with an opportunity to spend the next 12-months working remotely from paradise.”

Barbados isn’t the only nation in the region witnessing this change. Bermuda is set to welcome over 1,100 remote workers in 2021, with the country’s Labour Minister Jason Hayward highlighting the economic opportunity in a parliamentary address. He said, “These visitors can reside in Bermuda … and will promote economic activity for our country without displacing Bermudians in the workforce.”

More jobs

On top of added commercial interests, an influx of digital nomads has the added benefit of ameliorating the job market for local residents. Remote workers do not compete with islanders for local positions, and their presence is already leading to an increase in the creation of new businesses in Barbados through money spent in the local economy. By attracting these workers, their families and overseas businesses, economies are being given the chance to thrive, much to the benefit of local communities.

As island economies develop and opportunities for investment arise, the diaspora has also shown a predisposition to return and be a part of the growth of the local economy. This can in turn reduce the amount of emigration, and reverse the severe ‘brain drain’ faced by many island nations and remote communities, as seen in Saint Helena and across the Caribbean. With many digital nomad schemes still in their infancy, it is too soon to make definitive conclusions as to their efficacy. However, the proliferation of visas and programmes aimed at attracting remote workers in conjunction with early success stories provide an interesting economy-building alternative for emerging countries.

While the benefits of becoming a digital hub are enticing, there remains a key issue facing developing nations seeking to bring them to their shores: infrastructure. A primary challenge facing many LDCs, recent graduates and SIDS is the lack of digital infrastructure. There is definite interest from digital nomads to relocate to different parts of the world as exhibited by Barbados - but the country has been able to attract nomads and find opportunities to build its economy thanks to its fast internet speeds. Likewise, the Caribbean nation is also an example of how investors and commercial interests can flourish.

However, the infrastructure needed to implement a stable internet connection is not always readily available and may take notable investment and time to bring to fruition. Location still plays a role in determining the quality and speed of an internet connection, while the price of building a reliable infrastructure may be prohibitive for emerging economies.

But an internet connection is vital for development; it can even be deemed a human right. The fact that global internet penetration is improving provides hope for the future, with isolated islands like Saint Helena one of the latest to benefit from such connectivity. That being said, having such a digital infrastructure can have far-reaching economic benefits beyond the ability to attract remote workers.

The opportunity for remote workers is particularly relevant to countries that already have a significant tourism industry, which includes the majority of SIDS countries. Island nations with an existing tourism industry such as Cabo Verde, Vanuatu, the Maldives and Samoa could pivot their existing infrastructure and invest further in digital connectivity to take advantage of the opportunity, and additionally provide further job prospects for citizens.

An internet connection is now critical to staying connected with the global community. It provides opportunities to collaborate with other nations on key issues as well as share knowledge and expertise in order to further spur a nation’s economy and resilience. Digital nomads and tourism can both be used as ways to develop a local economy, but the key to further prosperity is investing and implementing a stable digital infrastructure.

Any views and opinions expressed on Trade for Development News are those of the author(s), and do not necessarily reflect those of EIF.