The geopolitical implications of home office
This post focuses on the EU's technology (and science) sector where almost 73 million people are employed. The argument is that even after the pandemic, the home office modality – for an already remote-apt sector with skilled labor force and high economic output – will stay.
This might have two geopolitical implications where countries will have to revisit what makes a company bear a certain flag and foster cooperation on new or more nuanced data sharing regimes.
Before going to each of the two consequences, here are the observations, and assumptions, forming the logic in this piece.
1) Attitudes to working from home
In the last 18 months many companies embraced the work from home modality and post pandemic these companies plan to change the approach to being on premises. These include Siemens, Fujitsu, Coinbase, Twitter, Ford and many other companies from tech and non tech sectors both in Europe and abroad.
Euractiv reported in March of this year that almost 40% of all employees in the EU are in remote work and San Fransisco is experiencing a “tech exodus” with 63% of companies planning to downsize their office space and, according to a prominent Silicon Valley VC, almost half of the local companies have 50% of their workforce being remote.
2) Migration trends
In 2020 and 2021 (ongoing), net migration – that is outgoing subtracted from incoming – in major tech cities in Europe was down (US as well). Those who leave do so to either their home country, another city (or country side), or increasingly to a geography outside of the EU altogether where several countries in Asia, Latin America, Oceania and the Middle East have launched new or eased old visa rules to attract and then convert these professionals into residents.
3) EU's capacity building
The last piece of background to keep in mind when reading the below is that there are big plans for digital sovereignty in the EU. It aims to more than double the number of ICT professionals within the decade as well as build and operate national companies that are necessary for securing its digital sovereignty and producing over €800 billion in value by 2025.
1) Defining national champions might become complicated
With the movement trends above, many companies might have their teams spread across different countries which will influence the formation of the definition of what makes a company European.
In other words, what will the criteria be that define which flag the next national champion bears? Incorporation jurisdiction, headquarter or shareholder location, serviced market, declaration by founders and now where the majority of a distributed team is located.
Network state teams or companies might add another dimension and complicate the above. Envisioned by Stanford lecturer Balaji S. Srinivasan, it is “a community that forms first on the internet, builds a culture online, and only then comes together in person to build dwellings and structures”.
Increased digitisation and mobility – as well as the imaginary of being a digital nomad – are aiding this trend and the Caribbean Island of Bequia is perhaps the closest manifestation of such a community which is set up around Bitcoin, while Plumia is launching the first “country on the internet”. New language will be required to describe companies that originate across these lines.
2) New or nuanced international cooperation for data portability
Being based in different locations means that the economic contributions by tech workers will shift as well. Beside tax implications, this influx of high earners (relative to any other city outside of the tech capitals of the world) will have an effect on local communities (positive or negative is to be seen).
To draw some benefits from this situation, countries that offer digital visas require mobile tech workers to set up a local bank account (and in some cases start receiving a salary there). In response to these challenges, countries might need to cooperate and set up a passported tax or other information ID.
A similar scenario is possible in the health sector which might become a further avenue of cooperation among countries that didn't exchange data before. Perhaps, the increased data and person mobility will also bring back the discussion of data embassies or data trusts.
Biopolitics – not geopolitics – is at the heart of the mobility and data production. Therefore, a second order consequence might be the realisation that empowering the individual might be the fastest and more secure way to control and share their information.
💡 Feedback and/or criticism is very much appreciated! Please tweet or DM it @ShiftPrintBlog.