Zoomshock: Is remote working the future of the Welsh economy?

The Welsh Government has recently announced a ‘long-term ambition to see around 30% of Welsh workers working from home or near from home, including after the threat of Covid-19 lessens’. The shift to remote working during the Coronavirus pandemic has led to what some experts are describing as a ‘Zoomshock’, whereby economic activity moves from traditional workplaces to people’s home areas.

Remote working since March 2020 has been linked to a number of social and economic benefits which the Welsh Government wishes to capture and maintain in the long term. These benefits include reduced urban congestion, reduced travel times for workers, less air and noise pollution,  improved work-life balance and improved productivity. However, there are a number of unknowns associated with a long-term shift to remote working on such a large scale which require monitoring.  A shift to 30% remote working in Wales could result in significant changes in land-use and the real estate market as more people work from or closer to home. Land-use modelling suggests that long-term shifts to remote working may lead to an increase in the price of land and housing in the urban periphery while prices in the city centre decline.

Additionally, research conducted before the Coronavirus pandemic suggests that people are more willing to live further away from their workplace if they can work from home at least some of the time. This relocation of work could have long-term impacts for sectors such as hospitality and retail. These services cannot be provided remotely and, as such, changes in where people work also impact where they consume such services. This has implications for businesses in the urban centre, where footfall has declined, and in the suburbs where footfall has increased.

Some commentators have suggested that these changes to greater remote working mean the end of the traditional city centre office. However, caution should be taken when considering such ideas in the Welsh context. Wales has fewer large cities than other parts of the UK and therefore may be less affected by changes in the use of city offices. The Welsh Government is planning to support its 30% remote working ambition with the creation of a network of community-based remote working hubs. However, it is not yet clear if there is an appetite for such spaces within the Welsh workforce.  Another consideration should be the effects of remote working on different groups, as opportunities could be unequally distributed. The proportion of employees able to work from home in Wales is smaller than that of any other UK nation. Men, the more highly educated and those on higher pay are generally more readily able to choose to work from home and accrue the economic and wellbeing benefits associated with that. Women, disabled people, people under-25 and some Black, Asian and Minority Ethnic groups are more likely to be employed in low-paid sectors and as such would be more vulnerable to any impacts that a wider shift to remote working in Wales would have on low-paid sectors.

It is important to note the exceptional circumstances and unprecedented scale of current remote working in Wales and the impact this has on the data and evidence currently being produced. Remote working in 2020 and 2021 has been a public health measure imposed on people rather than a choice made by workers and employers.

However, the widespread shift to remote working during the pandemic has changed views around remote working. A significant proportion of people working from home during the pandemic report wanting to work from home (at least part time) in future.  As such, it is important that policy decisions are based neither on solely pre-2020 data nor solely 2020-21 data. Data and evidence collection should be a key component of policies and initiatives supporting remote working in Wales in future.

Examining the possible ‘Zoomshock’ a shift to 30% remote working could bring about in the Welsh economy highlights both the benefits and the possible drawbacks of such a drastic reconfiguration of working practices in Wales. While an increase in remote working may have benefits for the environment, employee wellbeing and productivity, it is clear the impacts of a geographical re-distribution of economic activity on this scale are not yet known.

Uncertainty around inequalities and vulnerable groups, innovation, economic displacement, and reduced agglomeration remain key concerns as Welsh Government seeks to fulfil their 30% remote working ambition in the coming months and years. In light of the continued uncertainty around the impact of remote working in Wales, ongoing monitoring will be vital to harnessing the benefits of remote working in the Welsh context while mitigating potential negative impacts. This should focus on:

  • Which groups are working remotely and where?
  • What are the changes in urban footfall and behaviour?
  • What are the changes in employment?
  • What are the changes in house prices and rental costs?

You can read our report for Welsh Government on remote working here, and all our work on Wales’ recovery from the pandemic here.