The pandemic has been pushing businesses and other entities to expand online work beyond national boundaries so that they can keep operating even if workers can’t cross borders or must return home.
As international economist Mr Richard Baldwin’s prediction that an age would come when remote work would be mainstreamed steadily becomes a reality, emerging countries such as India, Pakistan, and Bangladesh reinforce their presence in the growing trend.
In 2020, employees in emerging countries accounted for 82 per cent of remote work and increased share, the University of Oxford stated. Their median hourly pay is ten dollars, compared to $33 in the States.
The International Labor Organization states that many jobs can be performed online, estimating that roughly one-sixth of employees, including IT engineers and financial professionals, can work remotely. This means the global workforce has around 600 million potential remote employees.
Some developed nations, such as Japan, are left behind in this trend and may see their international competitiveness weaken further unless they quickly nurture their human resources skilled in digital technology.
The number of people worldwide who were registered with Freelancer, an Australian site connecting those who offer and seek jobs online, stood at 50.8 million at the end of the last year, increasing 8.9 million from 2019. By June, the number had spiked to 53.1 million, up nearly 30 per cent from the pre-COVID era.
Jobs offered through English-based online work brokers had similarly increased 30 per cent as of July from 2018, according to a survey by the University of Oxford and a few other universities.
Border restrictions because of the pandemic lie behind this worldwide development.
The issue of visas by the U.S. is reducing sharply. In the fiscal 2020, through September 2020, 124,983 permits were issued in the H-1B category, allowing employers to hire foreign workers in digital technology and other professional occupations, down 30 per cent from the previous year. This number is decreasing rapidly by 50 per cent this fiscal year.
“America First” policies instituted by the former POTUS Donald Trump have made it even more difficult for foreigners to obtain visas, and the restrictions imposed on international travel have added on to the difficulty.
Major tech firms that have dispatched many engineers to North America, such as India’s Infosys and TCS, have seen their visas getting restricted. Yet their income in North America has not reduced. For example, Infosys logged $8.3 billion in the business year that ended in March, up about ten per cent from the last year.
IT companies have overcome the crisis by increasing local employees and by engineers who have worked remotely since returning to their home nation.
Remote work enables the allocation of employees regardless of location and visas and reduces risks in providing services, said Mr Venkataraman Ramakrishnan, the former chief financial officer of Tata Consultancy Services(TCS).
The U.S. debated regulations on offshoring, the relocation of work from one country to another in 2000 when the use of tech gathered steam, after the relocation of software development and others to low-cost countries accelerated, offshoring became a focal issue during the 2004 U.S. presidential election. Critics blamed it for the loss of American jobs.
This pandemic may add fuel to the U.S. protectionist moves aiming to restrict work relocation to other nations. But the demand for remote work, which lets job offers to be placed and accepted regardless of borders, is unstoppable.
One worker at a website building firm in India keeps getting more orders via Freelancer from the States investment banks, Australian media and other firms, most of which are located outside the country. Client service can be performed without tangled visa procedures, eliminating the need for a marketing team, he stated.
One of the sluggards in this global trend is Japan.
According to Oxford and other sources, Japan accounts for a meagre 0.1 per cent of the work orders won through job brokers globally. Without establishing a system for using online workers, like those increasing overseas, and speeding up the cultivation of people with the required digital skills, Japan may fall into a subordinate position in the worldwide competition for digital transformation.