Analysis: When you can't work from Barcelona, Boulder might do
The rise of "digital nomads," knowledge workers able to do their jobs from a rotating assortment of exotic locales -- the beaches of Phuket, the suburbs of Cape Town, the cafes of Paris -- took a big hit earlier this year as borders closed and cafes did too. Some nomads hunkered down, others scurried home. Startup Remote Year Inc., founded in 2014 to facilitate such work-adventures, laid off most of its staff and suspended services, leaving some customers in the lurch (it was acquired this month by a Panama-based hotel company).
But while digital nomads have for the most part been stuck in their own countries since then, there appear to be far more of them than ever before. After a survey of 3,457 U.S. adults conducted this July and August, MBO Partners, which provides services to independent professionals, estimated there were 10.9 million digital nomads in the U.S. this year versus 7.3 million in 2019, a 49% increase. To qualify as such, one has to change location at least three times a year, not just shuttle back and forth between a country house and a city place, and not move at an employer's behest, said Steve King of Emergent Research, who helped design the survey.
It's not a lifestyle for everyone. Even with this year's big gains, digital nomads account for less than 7% of the U.S. labor force. Still, that's got to be many times more people than were doing their jobs this way just a few years ago. Tim Ferriss's 2007 bestseller "The Four-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich" announced the emergence of the digitally enabled peripatetic worker. But only lately has the infrastructure to accommodate such work come together for those of us that must work more than four hours a week.
Communications tools such as Slack and Zoom, as well as ubiquitous(ish) WiFi access and cellular broadband, are all phenomena of the past decade or so. So is Airbnb Inc., which has reported signs this summer of a big increase in demand from digital nomads. Those include a tripling in the number of U.S. reviews mentioning "remote working" or "work remotely" and a 90% increase in searches using the "Allow pets" filter.
The big boost this year has of course come from the mass shift to remote work occasioned by the covid-19 pandemic. While in the past the ranks of digital nomads were dominated by entrepreneurial independent workers such as Ferriss, the majority of this year's nomads are in traditional jobs. (The ranks of digital nomads also skew younger this year than last, presumably because older workers are more concerned about catching covid-19.)
Meanwhile, there is a massive and growing reserve army of digital-nomad wannabes -- people who tell the survey-takers they're planning on going nomadic in the next two or three years, or at least thinking about it.
Most of these are likely what King calls "armchair digital nomads," people who will never actually take the leap. Still, there's clearly a lot of latent desire out there to try something different.
The data cited above come from MBO Partners' invaluable annual State of Independence in America surveys, which it started commissioning in 2011 amid what seemed like an explosion in freelancing and other independent work. Most of that increase turns out to have been a cyclical response to a terrible job market that began to reverse in 2015. The 2019 survey -- the full 2020 numbers aren't out yet -- found an estimated 15.3 million full-time independent workers, down from 16 million in 2011. A much bigger 2017 survey by the Bureau of Labor Statistics found that the percentage of American workers in "alternative" work arrangements, mainly independent contractors, had fallen since 2005 and was about the same as it had been in the 1990s. The statistics on self-employment maintained by the BLS also show it declining as a share of the labor force in recent decades.
This year has been different: The self-employed share of the workforce is up to 10.7% in September from 10% a year before, according to the BLS. And the Freelance Forward survey commissioned by remote-work platform Upwork Inc. (a continuation of the Freelancing in America series started in 2014) shows a much sharper increase than that in the estimated number of full-time freelancers. But again, a lot of this may be cyclical. When full-time jobs with benefits are available, that's what most American workers prefer to have.
Many of them do seem to hanker for a different relationship to those jobs, though. The pandemic has separated white-collar workers from their offices to an unprecedented extent. And even when those offices are all open and safe again, it seems highly unlikely all their former occupants will be willing to commute to them every day. With digital nomads in the MBO Partners survey reporting higher job satisfaction, more-advanced job skills and more commitment to continued training than their non-nomadic peers, employers would be really dumb to try to force them to. At companies where a hybrid of office and remote work becomes the norm, figures King, "It's going to mean that more of these people will say, 'I can't go to Barcelona or Thailand, but I can go to Boulder or Bend.'"
It's worth pointing out, if it isn't already obvious, that these choices are restricted to some pretty posh corners of the labor market. The BLS reported last year that only 29% of wage and salary workers could do their jobs from home, and that most of the 29% consisted of college graduates with well-above-median earnings.
Well-paid remote workers have of course been upending real estate purchase markets in suburbs and mountain towns around the country this year. The rise in digital nomads hopping from Airbnb to Vrbo -- and sometimes to hotel room, as several chains have been aggressively marketing to remote workers -- has in most places been a welcome replacement for lost tourist demand. But if their numbers continue to grow, it's easy to imagine affluent nomads displacing long-term local renters and otherwise affecting the economies of the places they flock to in ways that won't make everybody happy.
A society where the practice becomes truly widespread might have some interesting problems to solve involving taxation, civic engagement and the like. We're nowhere near that point yet, though. And I have to admit that digital nomadism mainly just sounds like it might be fun.
-- -- --
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of "The Myth of the Rational Market."