Digital Nomadism: Changing Global Landscape

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Table of Contents

Introduction
Literature Review
Case Study
Conclusion and Directions for Further Research
References

Introduction

The phenomenon of digital nomadism or the existence of a group of people that leads a “mobile lifestyle,” constantly changing places of residence, and also uses digital telecommunication technologies to fulfill their professional duties (as a “suitcase entrepreneur”) and solving other issues is becoming increasingly more popular in the modern world and attracts the attention of not only practitioners, but also theorists. Initially, digital nomadism was local in nature: nomads were residents of megalopolises, but with the expansion of wireless communication, due to the development of satellite communications, now they are almost everywhere (Griffith, 2020). Digital nomadism as a phenomenon is directly related to the possibilities and limitations of modern information technologies, including the network information and communication community, which unites, in one way or another, almost all people (Arruda, 2017). The possibility of constant movement and irregular working hours stimulates the mobility of the ‘tumbleweed,’ and the “connection” to the global information and communication network indicates that the identity of the modern nomad is also formed on the basis of the ideology and values of this network.

Accordingly, permanent mobility and “connectedness” to the Web are the basic characteristics of the identity of digital nomads, thanks to which their culture also becomes super-mobile. As a result, the global society is witnessing the ‘revenge’ of the nomadic lifestyle over the principle of territoriality and settledness (Müller, 2016). However, despite the rapid spread of this new sociocultural practice, it is relatively rarely the subject of serious research and scientific debate. One of the reasons for this is the absence of a meta-language for describing digital nomadism as a sociocultural phenomenon and an object of transdisciplinary study (D’Andrea, 2016). Meanwhile, digital nomadism is a factor of serious changes, manifested not only in the social sphere and spiritual culture, but also in labor market trends, the development of various sectors of the economy, and market segments. Digital nomads make up a very large group, even on a global scale, with specific behavior and consumption patterns that affect socio-economic processes.

Literature Review

Experts state the change in the structure of society following the development of remote network communications. The physical space between two remote points ceases to be an obstacle to communication and business interaction. As a result, the organization of society, to a certain extent, loses hierarchy, dependence on place and acquires the features of a network (rhizome) with many connections between objects (Hannonen, 2020). The information space has penetrated deeply into everyday life, transformed and accelerated the processes of interaction, influenced the formation of conditions for human socialization. The virtual environment today concentrates business, educational, entertainment information, electronic newspapers and magazines, databases on almost all areas of society, e-mail, access to various information resources of libraries, public and private institutions and companies. The activities of the media are being transformed, and a unified environment for the dissemination of mass information – multimedia – is being created. Fields of virtual presence and interaction of different functional directions appear (Bissell, 2018). The term “field of presence” was introduced by Mitchell and means the ability to carry out activities (participation in the production process) at a distance, as a result of which the traditional attachment of a person to a specific place loses its meaning (Kannisto, 2014). Remote communications generate “digital nomads” who function outside the given conditions and use the space situationally (Bissell, 2018). These processes may not require the personal presence. The expression “digital nomad” has appeared relatively recently; this is the name given to professionals or entrepreneurs of a certain field who are not tied in their work to a specific place. They work via the Internet and, being completely not tied to their business to any particular place on Earth, they live wherever they want. The “digital nomad” projects the phenomenon of nomadism in the sense of a modern metaphor as freedom without limitations; it is a modern ‘brand,’ a conceptual innovation that symbolizes a certain existential freedom.

Given the growing mobility and digitalization, the number of adherents of digital nomadism will grow all over the world. The growth of well-being and the quality of life, the spread of post-materialistic values, as well as the rapid development of digital technologies lead to the fact that gradually citizens of developed and partly developing countries stop treating work as an end in itself, increasingly more often perceiving it as a means of achieving goals (Cohen et al., 2015). In this regard, work and career among modern youth fade into the background, while freedom in time and space becomes a priority, which makes it possible to realize their creative potential and follow their hobbies. The ability to combine work with travel, the interest in which is steadily increasing with the growth of mobility, and withdrawal from routine – all this makes digital nomadism attractive especially for young people, whose main values are freedom, autonomy, mobility, and balance between work and leisure.

Most of the research on the phenomenon of digital nomadism is in the field of its philosophical, psychological, and social aspects – in particular, the problems of changing identity are being investigated. However, the consequences of this phenomenon for the national and global economy are no less interesting and dramatic (Bojanova, 2014). Digital nomads are reshaping employment patterns and the landscape of the labor market, as well as having a significant impact on consumption practices and the development of the sharing economy.

The lifestyle of digital nomads assumes that they build and develop their careers on their own, taking all the risks of precarious employment, financial instability, finding new employers, and so on. This often leads to the fact that a career is not limited to one profession, one type of work, one employer, one customer. In building their careers, digital nomads themselves must invest in the development of individual resources, while the traditional importance of formal education loses its meaning (Gandini, 2016a). In addition to professional skills, such skills as the ability to functionally organize personal time, control income, and take into account the need for professional development come to the fore. Namely this category of specialists is most committed to life-long learning practices and the acquisition of universal competencies and skills.

Business has already come to rely on the potential of these people and turn it into organizational profit. For example, global companies such as PriceWaterhouseCoopers and similar professional consulting and auditing companies have developed an entire system of collaboration with talented but restless youth (O’Brien, 2019). Employees of this company work freely; they can take a vacation at any time convenient for them to leave for several months and work somewhere on the shore of the bay. They can change not only places of residence, but also types of activities. At first glance, this is somewhat contrary to the market ideology. In fact, the business structure gains the opportunity to hire the best specialists regardless of their location and not lose them if their life circumstances change (Gandini, 2016b). Moreover, working in different parts of the world, these specialists become international “ambassadors” of the company, contributing to the growth of its foreign target audiences. This is seen as evidence of the transformation of this phenomenon from some kind of phenomenological conjecture into a real engine of the economy (Elgan, 2017).

The so-called knowledge nomads are of particular interest. An analysis of this phenomenon is given in a collective monograph Knowmad Society (2013), edited by John Moravec, professor of the University of Minnesota (USA). The concept of knowledge nomads is genetically related to the concepts of knowledge society, knowledge workers by Drucker. A knowledge society, according to Drucker, is a mobile, borderless society in which knowledge is the dominant type of capital for both individuals and the economy as a whole (Drucker as cited in Kong et al., 2019). Knowledge workers are people who not only assimilate and apply ready-made knowledge, but are also capable of generating new unique knowledge.

As for the knowledge nomads, they represent the next stage in the evolution of knowledge workers. Moravec defines the knowledge nomad as “an innovative type of nomadic knowledge worker, that is, a creative and innovative person who can work with anyone, anytime, anywhere” (Moravec, 2013, p. 41). He notes that knowledge work has become much less specific in terms of professional tasks and the geographic location of its performers. Moreover, modern technologies allow these “workers of the new paradigm” to carry out their activities in different spaces: real, virtual, or hybrid. Knowledge nomads can instantly reconfigure and re-convert their work environments, and high mobility creates new opportunities for them (Moravec, 2013). The use of modern digital communication technologies allows knowledge nomads to transcend national states, corporate identity or any community. Nomads of this type are distinguished by a conscious and constant desire to acquire new knowledge and competencies, for which they are most valued and which gives them an unconditional competitive advantage.

Experts believe that by 2025, 45% of the labor force in the West will be represented by knowledge nomads, and in the future their number will only grow (De Vaujany & Aroles, 2018). Namely these nomads, as people capable of generating innovations and new values with the help of their knowledge, will be at the head of the processes associated with increasing employment. Those who do not have the necessary knowledge will be replaced by computers, outsourced employees and competitors with the necessary knowledge (Hermann & Paris, 2020). The rise of the digital nomad movement has inspired young people to travel as much as possible and share their experiences with others on social media. Living abroad has become a status symbol for millennials who value experience and freedom more than material values. They have a voice, message and communication channels to express their outlook on life. Already today, millions of young people are studying and training abroad, starting their careers outside their countries. This is happening all over the world – some countries, for example Finland, have already begun to move towards the so-called geek-economy (sharing economy, or new economy of freedom), based on the transition from permanent employment with one employer to freelancing – remote online work in a free format (Krotoski, 2019). For this, special e-residency programs are being developed and implemented. Through such programs, foreign digital nomads and nomadic students can become entrepreneurs and run their businesses without ever having to meet with customers, suppliers, employees, bankers, or government officials face-to-face.

Case Study

Digital Nomads: From Niche to Normal

Numerous cases and analytics presented in business publications and reports of consulting companies, as well as noted in blogs, indicate that digital nomadism has already turned from a new unique phenomenon into quite common practices, but not yet fully understood both in business and in public administration. Dients and Rosenbaum (2020), considering a case of a typical digital nomad, claim that digital nomadism transformed from niche phenomenon to global trend, influencing business environment and some socio-political aspects. The phenomenon affects the very principle of immigration and obtaining visas, travel accommodation, etc. Sharing economy acquires huge opportunities to growth, to a significant extent, due to the development of digital nomadism.

This issue is discussed in a number of recent publications. For example, Estonia introduced the e-Residency program in 2014. It allows foreigners to register and conduct business on a par with Estonians, but completely online. That is, the digital “Self” is always in Estonia and makes it easy to interact with European customers, while the physical “Self” lives on the Indian Ocean coast. Such a program has already attracted more than 68,000 digital enthusiasts of freedom and entrepreneurship around the world (Allianz Care, 2020). In addition, the Estonian government announced the introduction of special visas for digital nomads “Digital Nomad Visa.” It will allow cooperating with Estonian partners and customers and live in the country during the implementation of joint projects. ID-card as an identity card is valid in most countries of the world from Kyrgyzstan to Malaysia. In some countries, it is only an identity card, in others it gives access to banking, doing business under a simplified taxation system and using all government services.

The thirst for travel inspires digital nomads for an unusual way of life. One might think that they represent a new generation of tourists, but they are not. The main difference between digital nomads and tourists is the propensity of the former to slowly change countries (Lewis, 2020). On the one hand, digital nomads work according to a schedule, on the other hand, they are not limited in their acquaintance with the area. Therefore, they do not need to ‘gallop’ through the most outstanding places of a new city or country to view them. Digital nomads can afford thoughtful tourism and gradual immersion in a new culture. While tourists simply travel to beautiful places for deferred funds, nomads financially support their lifestyle on the road. Digital nomads work while traveling, which allows incomes to immediately offset expenses.

They do not depend on geolocation: it does not matter whether they are busy developing a global corporation or inventing a new application for reading the emotions of a chat partner. All they need to work is access to the global network. Addiction to technology unites all digital nomads on Earth. They can work whenever they want thanks to the internet and the proliferation of cloud-based tools. This includes online chat and video chat services, content creation tools, cloud storage, and online services like Airbnb or Google’s ITA Matrix flight finder (Orel, 2020). Constant travel influences the way of life of new nomads. They rarely stay in hotels or hostels, but immediately try to rent comfortable and fully equipped accommodation for a long time, as it is cheaper, more comfortable and more practical. As such, they provide the impetus to rapidly improve the competitive position of Airbnb and similar services in the hospitality industry, while creating additional challenges for the traditional hotel business. As a rule, digital nomads live among the locals in order to better understand the life and culture of this country. Accordingly, they are looking for accommodation on Airbnb, through acquaintances and reviews of other nomads. They are not interested in the latest innovations offered by traditional hotels in attempt to attract millennials – high-tech hotels, new lobbies with interactive devices, electronic concierge, robots at the reception, and the like. Of course, millennials are characterized by a strong commitment to new technologies, but this generation, which forms the “backbone” of digital nomadism, is very practical and do not seek to use technology as a fetish – for them, it is just a means of creating comfort, saving, etc.

The global economy under the influence of information technology continues its rapid transformation, creating new segments within itself and changing the established ideas about the production process, the structure of work teams, and the relationship between employer and employee. One such newly emerging but booming segment is the gig economy, which can be translated as the “piece-rate economy” (De Stefano, 2016). The piece economy contains a number of dimensions, but the common platform for all of them is the principle of short-term hiring to fulfill specific one-time orders. At the same time, the work is remote, thanks to the use of the Internet and various applications.

Gig Economy, New Workforce and Change in Factors of Production

The workforce in the piece-work economy is made up of “independent” gig-workers (freelancers) who work in a “self-boss” model and contingent workers who work for a specific company, but who are not subject to benefits and social protection as full-fledged employees. Also, the participants in the gig economy include people who have a permanent job, but from time to time have additional earnings within the piece-work economy. Within the workforce of the piece-work economy, one can note the emerging strata, the top of which is made up of highly qualified specialists, especially among freelancers (Nash et al., 2018). For employers, this model allows saving significant resources on renting office space, training staff, hiring expensive specialists on an ongoing basis. The introduction of the gig economy means effectively breaking the traditional link between work / work process and fixed place of work (Sutherland-Miller, n.d). Thus, the world workforce becomes much more mobile than ever.

Research results show that the Millennial generation is proactive about finding work in the gig economy, as it meets their long-term aspirations in terms of employment flexibility and freedom (Fox, 2020). In turn, the Generation X and Baby Boomers came to this market for reasons beyond their control. The greatest dissatisfaction is characteristic for Generation X, who would likely prefer to return to traditional full-time work. Their main problem is that the unstable nature of earnings in the gig economy makes it difficult for them to form a budget (Cohen et al., 2015). Unlike Generation X, Millennials are most positive about relationships in the new market segment, as they have multiple sources of income, operate on a wider range of gig platforms, while practicing digital nomadism. According to experts, blockchain technologies will play an increasingly important role for pieceworkers in the coming years (Thompson, 2018). This is due to the fact that the blockchain system is a decentralized technology for supporting bitcoin and other cryptocurrencies, which provides a secure peer-to-peer transfer of value, enables everybody to become free agents. Also, blockchain allows all parties involved – the gig worker and the client – to see what work was done and by whom. Thus, for example, a specific contribution of a freelancer to a project for a client will be recorded on the blockchain, which will not only help independent workers test the skills and talents they are promoting, but also give companies an easier way to assemble the best teams of free contractors. The blockchain will also eliminate the risk of a freelancer not receiving or belatedly receiving payments for the work performed, which is very important for digital nomads who are absolutely not legally protected in their relationships with employers, due to different country jurisdictions.

The next trend is the further growth of the number of fully remote companies. American experts cite data from FlexJobs, an online platform specializing in remote and flexible employment, according to which about 170 virtual companies operate in the United States today, up from 26 in 2014 (Spiers, 2020). Among the largest, there are Automattic, AnswerConnect, InVision and Toptal; the nature of the work of such companies allows attracting talent from anywhere in the world. For example, since its launch in 2010, Toptal has been able to locate over 400 core employees from 60 countries. Fully telecommuting companies usually do not have a central office, and most of their employees work from home, a shared office space, or a local coffee shop. Leveraging tools such as Slack, Zoom, Dropbox and Quip, document sharing and editing platforms, can keep more people connected and track their workflow more accurately.

The phenomenon of digital nomadism is also being studied by marketers, as new nomads represent a huge segment and special target audience. In marketing terminology, most of them belong to the group of “early adopters” (D’Andrea, 2016). According to research by the Boston Consulting Group, digital nomads are looking for comfort and convenience, need technology and gadgets that allow them to travel, be mobile, actively use new media for work, information, entertainment, while they tend to be frugal (Makimoto, 2013). Stories told in the first person (storytelling) play an increasingly important role in promoting goods and services, as well as politicians and parties: they can be found in various forms of marketing communications, including advertising. Viruses are very popular among active and mobile audiences; viral stories used to promote goods and services can take many forms – videos, photos, flash games, or a WOW-call (Mom, 2018). Using different technologies, text, audio, photo and video stories are created that are designed for mobile people connected to the Internet and united by a common experience and language, similar values and problems, heroes and antiheroes. The consumption of digital nomads is global, and many years of efforts by companies to find the right ‘algorithms’ for bringing their products to foreign markets taking into account cross-cultural differences will no longer bring the expected results.

It should be noted that in the near future, trends in the freelance market will increasingly be determined by representatives of the new generation Generation Z (born after 1995), which will potentially strengthen the positions of the gig economy. Experts point out that this is the first generation born in the era of the Internet and postmodernity (“digital people”) and on which the development of the era of Industry 4.0 will lie (Geobey, 2018). In fact, Generation Z will shape a new digital environment, the parameters and influence of which on all aspects of human life, from psychology to politics, are already becoming objects of close study.

In particular, speaking about macroeconomic trends, it should be noted the further transformation of the system of factors of production in the post-industrial society. In this situation, information and innovations objectively become necessary conditions for production, that is, production resources. One can say that at the present stage of civilizational development, the possibilities of the formal logic of the theory of factors of production which equates a person as a producer with natural and material resources, and as a consumer – with a reflex bearer of demand for goods and services available on the market, have become obsolete (Haskel & Westlake, 2017). This approach to the system of factors of production does not allow studying the qualitative dynamics of modern social reproduction, which determines the basis of its development and is directly related to the advancement of human and innovations to the center of the modern transformation of reproduction. In the post-industrial economy, there is a change in the internal structure of the basic factors of production, which, in turn, qualitatively changes the system of factors itself, the specificity of which lies in the general innovative characteristics of each of its elements.

Conclusion and Directions for Further Research

It is obvious that the phenomenon of digital nomadism is changing the overall global landscape quite significantly and is a subject for fundamental research in political economy. The COVID-19 pandemic further exacerbated and complicated the trends noted above, increased the ‘army’ of remote workers and became a potential driver for the growth of digital nomads groups, who appreciated the benefits of such lifestyles and the reduced risks compared to the traditional workforce affected by the crisis. However, at the same time, in the course of the expansion of digital nomadism, a number of important unresolved issues arise – in particular, in the field of taxation and currency control, protection of intellectual property rights, immigration legislation, etc., which necessitates large-scale empirical research, study of individual cases, their categorization and analysis, in order to formulate conclusions for scientific and practical application.

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