Much is written about the benefits of remote working, from reduced staff turnover to increased productivity. Bali, a favoured Indonesian tourist destination, is now developing a five-year ‘digital nomad’ visa to attract higher spending remote workers. Bangkok, Seoul and Singapore also are pitching themselves as cities with ideal infrastructure, weather, food and travel experiences.
However, the extent to which the global remote working norm can reinvent cities in Asia, which are home to labour-intensive activities – especially in manufacturing – remains to be seen. Remote work is limited to only a few sectors, segments, work activities and tasks.
For one, many physical activities can only be performed on-site, such as operating machinery and equipment, providing frontline care and customer servicing, and most retail operations. Technology like artificial intelligence, machine learning, automation, digitisation and robotics can enable some, but not all remote work.
In addition, not all tech work activities are suitable for all cities. They carry the risks of reducing the traditional labour-cost advantage of developing countries with low penetration rates of computer ownership and internet access.
Also, while some work activities may be done remotely, these are often more effective when carried out in person. These include the courtroom operation, counselling and relationship building.
To my mind, financial services offer the highest potential, with business services, management and IT coming in second. However, these sectors are mostly restricted to workers with at least a university degree.
Cities could focus on other high-potential sectors for remote work, such as education, trade, real estate and public sector administrative and support work. Other sectors can use a hybrid model where the workforce may be staggered, with a certain percentage working remotely two or three days a week.
Remote working may not be universally suitable, but it will reshape regions’ comparative advantage. It will bring huge economic implications like land-use planning and IT infrastructure investment on broadband and mobile networks. Cities should think carefully about where remote working can benefit them.
Lawrence Yeo is CEO of AsiaBIZ Strategy, a Singapore-based consultancy that provides Asian market research and investment/trade promotion services.
This article first appeared in the August/September 2022 print edition of fDi Intelligence. View a digital edition of the magazine here.