A recent Workshop on Remote Work from the Organisation for Economic Cooperation and Development (OECD) offered two findings that should interest economic developers.

First, a paper on the New Geography of Remote Work found that individual characteristics rather than regional characteristics are the best predictors of remote work. That is, a region’s level of development or internet infrastructure matters less than the industry sector, education, and occupation of individuals working in a location in determining the prevalence of remote work. In short, worker composition is the key. This finding could bolster the case for policies to attract remote working individuals to communities that wish to boost their remote work numbers as part of an economic development strategy. However, the study approach may have downplayed other place-based characteristics – such as culture, amenity levels, and housing options – that may also affect the distribution of remote work.

Second, survey data on working arrangements in 30 countries is being used to examine the effects of remote work on people, businesses and places. The analysis found significant direct benefits for workers and their families but noted that these benefits have largely accrued to more experienced, college educated workers. The implications for businesses are not yet clear because of countervailing implications for innovation. Cities are likely to face challenges. Remote work trends may directly reduce the city’s local tax base and also raise the elasticity of the local tax base. This means there is a potential for a downward spiral in which “poor governance amplifies outmigration and loss of inward commuters, eroding the tax base and undercutting fiscal capacity to supply local public goods, which leads to more outmigration and less in-commuting.” 

Bottom line: The economic development impact of remote work is not straight-forward. Economic developers need to create the right strategies for their locations to ensure remote work creates benefits for people, businesses and places.