Although urban life is in constant change, every now and then a telluric movement occurs that generates a turning point in the evolution of cities. A good example took place more than a century ago with the emergence of automobiles, which redefined the shape of modern cities worldwide. Today, some of the major changes, as was also the case with the arrival of automobiles, relate to a number of maturing technologies that are being adapted to all human processes and activities. The implications for cities are immense. In this post, we will analyse one of the most evident changes since the pandemic began, the emergence of remote working and its impact on urban geography.
Firstly, it should be borne in mind that the percentage of teleworkers is not as large as one might think. If we take the whole of the Basque Country as a reference, according to the LFS for the fourth quarter of 2020, only 9.5%(1) of the employed population were able to telework occasionally or regularly. Even so, as indicated by an analysis carried out by Caixa Bank Research(2), if Spanish municipalities are classified according to their population density, 39% of workers living in large cities could telework, compared to 30% in intermediate urban areas and 23% in rural areas. Furthermore, it seems reasonable to assume that cities are home to a large number of potentially "teleworkable" jobs. Teleworkers represent a large proportion of the so-called cognitive workers (generally knowledge-intensive jobs) engaged in particularly dynamic activities such as Advanced Services. This group, within the current occupational structure, is at the high end of the wage scale and, therefore, has a high capacity to stimulate the economy. Moreover, they are found in certain urban and metropolitan areas. For example, the arrival of teleworking has reduced the number of people who come to work in the central districts of cities, thereby having an impact on the business ecosystem that revolves around them (commerce, hotels and restaurants, etc.).
There has also been a reduction in the number of intra-regional, national and international business trips, another highly mobilising factor in the economy. By way of example, the aforementioned Caixa Bank Research analysis examines the daily inflows of people to the main Spanish cities. Although the data in question are not limited to workers, they give an idea of the scale of commuting in the major cities. For example, Bilbao receives 34.000(3) commuters daily. This represents 10% of its total population. Apart from teleworking, there are other factors that reduce urban centripetal capacity such as commerce, education or online administration.
This suggests that proximity to work will gradually become less important in deciding where to live. This is quite new because for most of history, people have worked literally where they lived, on farms and in workshops on the ground floor of their homes, or at most a short walk away. It also opens up a growth path for small and medium-sized municipalities. These, in general, offer cheaper housing prices and a lifestyle that can suit certain profiles and life stages. Families may move to smaller towns or rural areas with outdoor amenities or in search of "quality of life", while young professionals in the 25-35 age group who are starting to build a career are likely to continue to move to urban centres in search of career opportunities and a vibrant social life. However, teleworking may also breach the dominance of big city business centres in attracting talent. Small and medium-sized cities have the potential to develop their economies based on teleworkers(4). In this regard, some municipalities are already setting up teleworking centres with meeting and video conference spaces, good connectivity and other amenities to facilitate working in the right conditions and thus attract talent.
But new possibilities are also emerging for large cities. Hybrid formulas will prevail in the coming years. According to an IESE(5) report, only 12% of workers who are able to telecommute want to do so 5 days a week, regardless of factors such as age. Therefore, economically thriving cities such as Madrid, Barcelona or Brussels with a high demand for cognitive workers could come to target other markets more easily by offering work formulas that combine face-to-face and remote work. This would be enhanced by improved mobility and connectivity between cities (such as the arrival of high-speed rail). For an increasing number of people, it will become more feasible to combine work and life in different cities. Many of us are seeing increasing numbers of people spending 3 days working, in Madrid for example, and 4 days at home. In this regard, some large companies such as salesforce have embraced remote working not only because it saves them money on office space, but also because it gives them greater access to talent as they do not have to relocate new employees. This will make issues such as early talent attraction (dual training, etc.) critical to retaining employees in high-demand areas. In addition, telework could lead to higher employee satisfaction due to its ability to improve working conditions and work-life balance, for example.
All in all, a gradual increase in workplace relocations is looming on the horizon. The attraction of cognitive occupational profiles (especially those in technology), which already generated competition at both company and local level, will become even more challenging. Cities will continue to be centres of leisure and encounter, but the online world erodes some of their historical functions, perhaps the most relevant being that of hosting and attracting large numbers of jobs. For small and medium-sized cities, telecommuting adds another potential avenue for development in terms of attracting talent by offering services and "quality of life". As always cities and regions that develop well-planned proactive strategies will have an advantage over those that are nonchalant.
- (1) Source: LFS for the fourth quarter of 2020, Basque Country data.
- (2) https://www.caixabankresearch.com/en/economics-markets/labour-market-demographics/how-will-teleworking-change-urban-mobility-and)
- (3) Source: NSI, the reference data were taken between 18 and 21 November 2019 and come from: https://www.ine.es/covid/covid_movilidad.htm
- (4) https://elpais.com/tecnologia/2021-04-17/los-teletrabajadores-empiezan-a-colonizar-canarias.html
- (5) https://insightreports.iese.edu/un-lugar-de-trabajo-sostenible/
Mikel Albizu is a pre-doctoral researcher at Orkestra. At present he combines his doctoral studies with the participation in several research projects.
His main research area is employment and the factors that drive it at a regional and local level, although he has also studied and worked in the field of urban planning and territorial planning.
Miren Estensoro is a Researcher at Orkestra-Basque Institute of Competitiveness and a lecturer at Deusto Business School. She holds a PhD in Economics from the University of the Basque Country. Her research area is mainly local economic development, territorial governance and multi-level coordination of competitiveness policies.