New faces in new places? The new geography of work

Teleworking transformed the world of work for many over the last two years. Many commentators have speculated that it will change our geography too – as people leave cities for greener environments and more affordable housing.

A rapid transformation

The scale of the transition has been staggering. Teleworking grew from around 16% of employees before the crisis to around 37% during the first wave of the COVID-19 pandemic in April 2020.

The move to remote work has helped protect many jobs, firms and communities during long periods of isolation and social distancing. But the big question is: will it result in a more fundamental shift in the geography of where we live and work?

Initially, its impact reinforced disparities between places: teleworking allowed workers in successful cities to continue working throughout the pandemic while others, especially in rural areas, could not. This in part reflected differences in the types of jobs performed. OECD analysis shows that the share of jobs amenable to remote working was 13 percentage points higher in cities than in rural areas. But it also reflected the better quality and availability of digital infrastructure in cities than in rural areas where 1 in 3 households cannot access high-speed broadband. To illustrate, in April 2020 41% of the labour force was teleworking in the Île-de-France region, compared to only 11% in Normandy.

Jobs amenable to remote working in selected European and OECD countries, 2018
Share of total employment (%), large regions (TL2)
Source: Capacity for remote working can affect lockdown costs differently across places – 2 June 2020

Changing perceptions

Yet while teleworking initially protected many jobs in cities, it also proved to both firms and workers that those jobs can be done elsewhere.

For firms, this provides an opportunity to cut costs on office space and recruit from a larger pool of workers beyond cities. Our recent report highlighted that 14% of companies in Tokyo are now considering reducing or relocating office space.

For workers, teleworking provides opportunities to move outside dense and expensive cities to greener environments with more affordable housing.

An evolution or revolution?

Many governments are seeking to seize the moment to attract businesses, jobs and skilled workers to new places, easing congestion and affordability pressures in cities while providing new opportunities elsewhere. For example, Ireland’s newly launched “Our Rural Future” plan focusses on boosting quality of life, improving public services and digital connectivity to attract workers to rural communities. And in France, the town-centre action plan (Action coeur de ville), which launched in 2018, should help mid-sized cities capitalise on these new opportunities by improving housing in the city centre as well as accessibility and transport.

Yet there are strong drivers for people to remain in or close to existing employment hubs. First, because employers are likely to still require at least part-time attendance in the office from their workers, keeping them close to – if not in – their cities of employment. Second, because many cities retain important assets and amenities, which will continue to appeal to residents, including accessibility to retail, leisure, and public services. Third, because the stock and availability of housing – particularly social housing – will remain important anchors for current populations at least over the short and medium turn.

This suggests that the real winners might be areas close to cities with good digital and transport connections, and a good quality of life, including some medium-sized cities and suburban areas, many of which will benefit from the programmes in Ireland and France.

Emerging evidence seems to support this. In the US, for example, overall population changes in cities were minimal during 2020. The cities with the highest out-migration – New York (Manhattan), Houston and Austin – each lost a net of fewer than 15,000 citizens. And while the top locations to which they moved were destinations were places with lower costs of living, movers tended to remain close to their place of origin.

Challenges ahead

Nevertheless, any longer term shifts will require careful management. Places need to be supported to:

  • Supply the right digital infrastructure for teleworkers. For example, the German “Gigabit programme”, is extending broadband in areas where there is no market-driven expansion;
  • Extend public transport systems to connect to major hubs for occasional commuters; and
  • Manage increased demand for housing and public services, as well as pressures on the environment. Here sound planning systems and land value capture mechanisms can help protect the environment and generate resources to fund new public services and amenities.

Cities may also have to adapt to lower demand. There is a challenge in addressing possible job losses amongst those who cater for office workers, such as those in hospitality and retail. There is also the challenge of adapting land use – for example in making converting vacant offices into housing or better public spaces. And there may be financial challenges stemming from reduced public revenues from enterprises and public transport.

The future remains uncertain. However, while teleworking is unlikely to prove the salvation for many lagging places, we need to be prepared with the right policies to welcome new faces to new places.

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Lamia Kamal-Chaoui is the Director of the OECD Centre for Entrepreneurship, SMEs, Regions and Cities since 2016.

As a key member of the OECD Executive Leadership team, Ms. Kamal-Chaoui supports the Secretary-General in achieving the OECD’s mission to advance economic growth and social progress as well as contributing to other global agendas such as the G20 and G7, the Paris Agreement on Climate Change and the implementation of the United Nations Sustainable Development Goals.

Supported by a team of over 160 staff, Ms. Kamal-Chaoui leads the Centre’s work to advance the OECD mission of “better policies for better lives” by ensuring that all people, all types of places and businesses of all sizes can prosper from green and digital transitions (read the Centre’s brochure and dedicated blog for more details). This includes work in the fields of: SME and entrepreneurship policyRegional, urban and rural  development;  Local employment and economic development (LEED programme);  Subnational statisticssocial economyMulti-level governance, local finance and decentralisationTourism and Culture.

Prior to being Director, Ms. Kamal-Chaoui has held several senior positions at the OECD since 1998. From 2012 to 2016, she served as Senior Advisor to the OECD Secretary-General. In this role, she supported the Secretary-General’s strategic agenda and led the OECD Inclusive Growth Initiative, the Knowledge-Sharing Alliance programme, the development of the Global Deal  and the implementation of the OECD Strategy on Development. From 2003 to 2012, she was Head of the Urban Programme in the OECD Directorate for Public Governance and Territorial Development.  Previously, she also worked in the OECD Trade Directorate and the OECD Directorate for Financial and Enterprise Affairs. Before joining the OECD, Ms. Kamal-Chaoui worked for a university-based research institute as well as several media outlets.

During her extensive career at the OECD, she has spearheaded several ground-breaking, multi-stakeholder OECD initiatives including the Roundtable for Mayors and Ministers, the Champion Mayors for Inclusive Growth Coalition, the Digital for SMEs (D4SMEs), and the StandbyYouth Initiative. She has also authored, co-authored, and overseen hundreds of policy reports and articles, and forged numerous strategic partnerships and collaborations with companies and international institutions. They include major philanthropic organisations (e.g. Ford Foundation, Bloomberg Philanthropies, Rockefeller Foundation, Kauffmann foundation, MacArthur Foundation, Open Society Foundations) as well as other prominent organisations (e.g. Vatican Pontifical Council of Justice and Peace, Club of Madrid), international civic organisations (e.g. Youth Forum, Ashoka Global) and multilateral institutions (e.g. World Bank, IADB, ADB, EBRD, European Commission, UN Habitat, APEC). She has also partnered with the private sector, including large corporations (e.g. Facebook, Amazon, Kakao, Microsoft, Vodafone) and business associations (e.g. International Chamber of Commerce (ICC), B4IG, SMEUnited).

Ms. Kamal-Chaoui has been a member of several International Committees and Advisory Boards (e.g. Lancet Green Recovery Task Force on COVID 19 recovery, C40 Women for Climate, UNWTO COVID-19 Crisis Group, World Economic Forum Deputy Board of Trustees, Vatican Expert Group on Inclusive Globalisation, Club of Madrid’s Shared Societies, Shanghai World Expo, Michael Bloomberg Mayors Challenge for Europe, Mayor of Paris Anne Hidalgo’s Strategic Committee). She has also been a lecturer at Sciences Po Paris for the “Governing Large Metropolis” Master’s Programme.

Ms. Kamal-Chaoui is a French and Moroccan national. She holds a Master’s Degree in Macroeconomics from the University of Paris Dauphine and a Master’s Degree in Foreign Languages and History from the University of Paris Diderot. She recently received the "Women of the Decade in Enterprise and Leadership" award of the Women's Economic Forum.