Estonia at the forefront of remote work and the new normal

E-Residency Director Lauri Haav interviews migration expert Ave Lauren about global talent mobility, new ways to work, Estonia’s competitive advantage, and the new normal.

Photo: Annika Haas

For quite some time now, large numbers of people have ceased to associate work with a specific physical location or time zone. All around the world, the share of remote work is on the rise, with the COVID-19 pandemic only accelerating the trend.

Lauri Haav, the Managing Director of the Estonian e-Residency Programme met with Ave Lauren, an Estonian migration expert who holds a PhD in Economic Geography from the University of Cambridge, to discuss talent mobility, the proliferation of diverse forms of work, the emergence of innovation centres, Estonia’s competitive advantage, and other compelling issues related to the new normal.

Ave, throughout history, people have been moving around and relocating to places that offer better conditions for survival. Estonia is no stranger to such migratory waves – three of those waves have been outward-bound, not to mention modern cross-border commuting, especially between Estonia and Finland. Now, the COVID-19 pandemic has given an unprecedented boost to working remotely. What do you think, are we all now suddenly induced into considering relocation or changing jobs?

Indeed, the COVID-19 pandemic has transformed the labour and migration landscape into something much more diverse than it used to be. The experience of remote work, which became unavoidable for most people during the pandemic, has given us an opportunity to gain invaluable insights and truly reflect on what arrangement would suit us best. For example, some people have realised that they actually enjoy remote work much more than the alternative and they want to continue with this new arrangement. On the other hand, I have heard that there are also people who do not like it at all, because they feel isolated and there are no opportunities for in-person exchanges with colleagues.

However, if we take a closer look at the interplay between remote work and migration mobility, an interesting trend emerges – on the one hand, the importance of location is decreasing, while on the other hand, it seems to become more important. Thus, we are witnessing two opposing trends. It makes sense that talents would want to work together because in-person interactions create synergies, cluster dynamics and facilitate a productive exchange of ideas. This gives rise to an intriguing question – can we maintain the same dynamics while keeping our distance?

As an example, for quite some time now, many Singaporean companies have operated with a configuration that has only one person present at the office, with the rest of the team operating remotely, from Thailand or Bali, for example. Once every few months, the whole team gets together in Singapore for a week of intensive collaborative work. This arrangement is just one example of the emerging diverse forms of work. The initial transition and subsequent adjustment to such hybrid arrangements may prove quite difficult for some businesses because suddenly they are expected to offer both, i.e., a stable office environment together with the option to work remotely. It is clear that people’s preferences, expectations and working habits are becoming more and more diverse.

At the same time, I don’t think that when the virus subsides, we will all return happily to the office, or that labour mobility would require permanent physical presence abroad. However, I am convinced that we will see an increase in the number of international teams. Today, companies are free to hire talent from around the world and they are able to successfully onboard new recruits also remotely.

The Estonian e-Residency team is increasingly moving towards remote and asynchronous work. One of our colleagues currently resides in Australia, another one is moving to Germany, and we are also recruiting new people from all over the world. We do not expect them to relocate to Tallinn for work and we are happy to offer living and working arrangements in line with their personal preferences. How about you, what do your employers think about remote work?

In the university setting, remote work has actually been very common for quite some time now, especially when we talk about research activities. In that sense, remote work has always been an integral part of academia. However, in terms of study programmes, the transition from in-person classes to distance teaching wascertainly very challenging for all educational institutions all over the world. The most urgent question that needed addressing was how to engage students effectively in these new circumstances. In Estonia, we managed to switch to online platforms relatively quickly because we had already developed almost everything one would need to set up distance learning. The fact that universities had fostered remote work for a long time turned out to be a critical advantage. As a result, any hindrances related to distance learning were overcome relatively quickly.

In addition to teaching, I also work for the European Migration Network (EMN), an expert network of the European Commission. In fact, for EMN experts, remote work has been the modus operandi from the very beginning. The network is comprised of national contact points in all EU Member States, and the experts meet regularly in Brussels for discussions.

I’m lucky to have a long-term experience with daily remote work, and therefore, for me, the transition was relatively painless. However, I have realised that physical contact must also be maintained, in one way or another, because it fosters mutual trust between colleagues. Additionally, certain things seem to progress much faster in face-to-face settings – in-person interaction just seems to facilitate better understanding, not to mention the effect of non-verbal communication, such as body language. I believe that we will be seeing more and more that teams get together intermittently in order to, for example, engage in joint brainstorming. What is more, the functions of the office are also bound to undergo significant changes. People won’t be going to the office every day to sit at the table, instead they will come in only for fulfilling certain functions.

This spring I listened to Tim Ferriss’s podcast with Balaji Srinivasan. Their discussion focused on remote work, and the main takeaway was that the COVID-19 pandemic and remote work seem to be having the same effect on the competition between countries and cities as Google News and the Internet had on newspapers at the turn of the century. By levelling the playing field, all publications were, suddenly and quite unexpectedly, in direct competition with each other, and in less than a decade, the media business underwent a dramatic transformation. At present, remote work is similarly generating unprecedented competition on a global scale, where San Francisco is competing with Miami, Tallinn, Tbilisi and so on. As a result, competition is bound to become extremely intense because talented people are now free to choose to work wherever and whenever they want. Do you agree that remote work will spur competition between localities?

Indeed, all the necessary conditions are in place. For the past ten years, most developed countries have been thinking about how to increase their attractiveness in the eyes of talent. The infrastructure for marketing countries or entire regions is already up and running. Take for example the cities in the central region of the U.S. It was previously thought that talents preferred to flock to large coastal centres, whereas nowadays, even cities like Tulsa in Oklahoma have launched active campaigns for the purposes of attracting talents. Interestingly, many campaigns even offer monetary incentives to lure prospective new residents – provided that they stay put and work there for at least one year. Ultimately, these measures are seen to be benefitting these cities to a much larger extent than the amount spent on attracting new talent. Such campaigns are already ongoing in many places, and I believe they are only going to intensify even further.

However, it’s not always just about the money, rather it’s about creating the right conditions. It is clear that people are looking for alternatives, and this trend is also apparent in the labour market. People are realising that the old system is not working anymore and they want to try something new. Now is an excellent opportunity for cities and regions to make the most of these developments. In that regard, Estonia is also well-positioned for success in this area.

What if cities like Tulsa succeed in attracting talent, what will become of the currently popular centres of innovation? I recently interviewed someone who is interested in joining the Estonian e-Residency team after having built a successful career in London over the past 12 years; however, now they are seriously considering leaving that behind for a significantly lower-income job in order to realign their focus. They are sincerely compelled by the thought of living in Latvia, making regular trips to Tallinn, as well as visiting e-Residency target markets. Do you think that the drawing power of talent centres might flip around and start, so to speak, operating backwards?

I believe that some kind of calibration is certain to take place, especially considering that the cost of living in the most popular talent centres remains quite high, whereas the living conditions are usually rather poor. I recently discussed this with a colleague, noting that in New York and London rents have fallen significantly as a result of people leaving. Previously, people had been willing to live in closet-sized dwellings, whereas now people are opting to settle somewhere else, provided that they are able to maintain a connection with the city.

Nevertheless, the pull of talent centres remains extremely high and the rate of urbanisation shows no signs of slowing down. The economic potential of mega-cities remains tremendous. Take, for example, a city like Lagos in Nigeria that attracts foreign investors with its huge labour market and consumer base.

At the same time, lifestyle must be factored into the equation when looking at talent and top professionals. In that respect, countries and cities that offer a better work-life balance have a clear advantage. Additionally, the natural environment is also a very important factor. If we look at Estonia from an outsider’s perspective, its strongest features are unspoiled nature and the environment. Those are wonderful selling points on the international arena, but we must admit that those elements are not always as highly regarded by the locals. In Estonia, we take for granted the opportunity go on bog hikes any time we please. 

In the case of migration, the traditional model sees people moving from point A to point B and settling there. In reality, such scenarios became obsolete already several decades ago, especially if we talk about top-tier specialists and highly educated migrants. Instead, modern mobility looks something like moving from point A to point B, from there to point C, and then returning to point A. Overall, mobility is nowadays much higher. People take advantage of different opportunities regardless of whether it means moving around domestically or relocating abroad. Actually, there’s not much difference whether one works in Hiiumaa or in Bali.

You mentioned that Estonia’s natural environment is one of its main lifestyle factors. What would you recommend to Tallinn or Tartu if they seek to become magnets for world-class talent and innovation?

Estonia’s situation is unique because most of the easier things have already been done, but the remaining barriers are much more difficult to tackle, because they are of fundamental nature. If we look at the Global Talent Competitiveness Index, Estonia has always been very successful. However, there are still issues that remain unresolved. For example, in terms of tolerance, Estonia is ranked among the lowest in the world. Fortunately, it seems that the ice has started to move at the social level and people are becoming more open. They are starting to realise that teams can be multilingual and include people from different cultural backgrounds. However, Estonia still has a long way to go in terms of tolerance and openness.

The second aspect is related to unequal regional economic development. The lack of international flight connections is another serious hindrance. Even if we facilitate remote working in Estonia, people would still need to fly abroad, which may prove difficult. Currently, there are no good solutions on the table.

All things considered, Estonia has done an excellent job in delivering simple solutions to complex problems. Now we need political will and public support to tackle the remaining challenges. How to foster a more open society? How to establish better connections with the rest of the world? Those are some of our main weaknesses and things will not change until we address them head on.

Let’s move on from cities to bigger chunks of land. You’ve said in an earlier interview that Europe as a whole is not doing too well in the global hunt for talent. Do you still think that way?

Europe seems to be plagued by systemic challenges. For example, when international talents go to North America, they encounter a huge market, a large number of employers, and their good mastery of the English language will open all doors for them, whereas in Europe, there are many different languages. Consequently, it is much easier for English-speaking countries of North America and Oceania to scoop up all the talent. In order to change that, the European Commission is now working on creating a talent pool for the purposes of finding innovative solutions to make it easier for talent to come to Europe. However, we cannot really speak of a common talent landscape in the European context, because each Member State has its own reputation and priorities, and in the talent policy context it quite easy to distinguish between the stronger and the weaker ones.

So how is talent-hungry Estonia doing in this respect? Estimates indicate that in the next ten years our startup scene alone is expected to employ around 50,000 specialists. You mentioned fundamental underlying problems such as intolerance and regional inequality, which can only be overcome with political will, public support and targeted measures. Have you noticed any positive developments in that regard?

There have indeed been noticeable improvements in terms of attracting talent. For example, the Estonian Police and Border Guard Board has on staff special migration advisers to deal with incoming talent. In addition, foreign nationals are welcomed to Estonia with a special orientation programme to help them settle in. Overall, our mobility services have become quite progressive and Estonia already serves as an inspiring example to other countries. For instance, Estonia was one of the first to start issuing special startup visas for entrepreneurs and startup employees. That was an innovative solution that was quickly adopted by Finland, for example. In addition, Estonia was also among the first to offer a special visa for digital nomads, not to mention the e-Residency programme, which has also been copied by several other countries. Overall, it seems that the rest of Europe keeps a close eye on Estonia’s initiatives in this area.

According to Ave Lauren, Estonia has made considerable strides in terms of attracting talent. Photo: Annika Haas

The Estonian digital nomad visa has already been copied by numerous countries around the world. It seems that no country can afford to ignore those things any longer?

Yes, Croatia, Malta and Georgia are now also offering special visas for digital nomads. Major countries such as Spain and Germany also enabling digital nomadism, and a number of other states are also working on their own schemes – Latvia, for example. It’s beyond doubt – digital nomadism, in conjunction with the proliferation of various modes of remote work, has become the new normal. The time is ripe for national regulation of such arrangements, although we must also remember that these things take time.

Ukraine and Portugal are reportedly also working hard on developing their own national e-residency programmes, and Lithuania announced that it plans to launch its scheme in June. What is your main takeaway regarding these developments?

I believe that having the right attitude is key. Let’s take the example of startups. Before returning to Estonia, I was based in Silicon Valley and felt a significant difference. For instance, Estonians are not particularly keen to share their ideas, whereas the Silicon Valley approach is diametrically different – people are unafraid to share their ideas because it is seen as a potential gateway to future collaboration that might, in turn, generate increased momentum. For example, the city of Berlin was very interested in attracting startups, and they engaged very actively with different cities to create a support network for startups. The focus was on empowering each other, because it’s much easier to do things together.

There is strong demand for changes in how we work and it has become one of the major challenges for modern societies, because the enabling infrastructure is just not there yet. If we look at the Nordic region, a good example is the gradual merging of the Swedish city of Malmö and the Danish capital Copenhagen, facing each other across the Øresund strait and connected by a bridge that was inaugurated in 2000. Both countries have relatively high levels of regulation, which has made it extremely difficult to cooperate in certain areas. Although the overarching Scandinavian partnership facilitates certain things, as soon as third-country nationals come into play, cooperation becomes very difficult. In this case, the lived reality has changed dramatically, but the regulations have yet to catch up.

Speaking of changing realities and concepts, I’ve been thinking about the relationship between the concept of diaspora and the current trends in labour mobility? Are those things changing as well?

In my opinion, similarly to labour mobility, the diaspora landscape is also undergoing significant and rapid changes. In fact, we have reached the point where we need to expand both of those concepts. When talking about the concept of diaspora in its traditional meaning, the distinguishing feature is that the people maintain a connection with their homeland. But what do we even mean by homeland? Is it nationality or an ethnic group, some kind of geographical location, or is it culture? The concept of homeland is extremely ambiguous, and each country defines it a little differently.

For Estonians, there are many different reasons for relocating abroad. Most people simply want to explore the world, but of course, many people do it because of work. As a country, Estonia actually keeps in touch with those people through its e-governance ecosystem. In this regard, i-voting is an excellent example, enabling Estonians all over the world to cast their votes in elections using their digital ID card. Thus, for Estonia, e-governance is a critical instrument for maintaining our diaspora.

Today, Estonia has over 84,000 e-residents who hail from more than 170 countries from around the world. To date, those people have established around 18,000 companies. Do you think that Estonia should approach its
e-residents as a kind of digital diaspora or e-diaspora?

You are absolutely right,e-residents are people who operate within the Estonian information space, thereby bearing close resemblance to diasporas. We should think of e-residents as a community whose members are able to and often sincerely want to contribute to Estonia. The existence of such a community work wonders for a small country such as Estonia.

In this regard, perhaps Ireland is the best example of having numerous diasporas around the world. Ireland’s own population is around 6.6 million, whereas their diaspora amounts to approximately 75 million. This number comprises people from all over the world who have a special connection to Ireland and who want to contribute to its success. Its advantage lies in the realisation that, on its own, Ireland could never be as big in physical terms as taken together with its diaspora. Ireland’s global position and their strong voice stems from the millions of people around the world who care very much about its development. Estonia could follow the same pattern, especially through the e-Residency programme.

Ireland’s figures are very intriguing – 6.6 million versus 75 million. If Estonian e-residents were to form their own city, it would be the third largest city in Estonia. Truth be told, they are already well on their way to surpass Estonia’s second largest city, Tartu. What is more, from the perspective of population growth, increasing the number of Estonian e-residents is much easier than increasing the number of natural persons. It is quite possible that in the future Estonia will have more e-residents than actual people. What do you recommend to Estonia for cultivating the development of a loyal diaspora?

In this context, I would draw parallels with the Basque Country. They have set up a virtual talent network, basically a regional LinkedIn, where people can sign up and local companies use it for recruitment. That’s one practical solution that Estonia might consider adopting. We are currently experiencing labour shortages and I believe that many e-residents could also contribute to the local labour market.

Currently, Estonian e-residents tend to be seen primarily as startup entrepreneurs whose companies peruse local services and pay taxes. However, I agree that they carry much more potential, for example, as highly qualified professionals in the local labour market. Should we work harder to demonstrate more effectively to current and prospective e-residents what Estonia has to offer as a country?

Speaking of national initiatives, it is of paramount importance to communicate positive messages to talent – people must feel that they are important. It’s a really simple idea, but often it’s just not followed through. In terms of
e-residents, we could focus on better ways to engage them. Estonia needs talented and business-minded people. To that end, we must utilise available resources as effectively as possible. The programme launched in the Basque Country is called Bizkaia Talent, allowing people to indicate their interest to contribute locally and find professional contacts. People are actively looking for networking opportunities, and countries that are seeking to attract talent need to support those opportunities.

The option to work remotely is a privilege that is not available to everyone across the board, says A. Lauren. Photo: Annika Haas

In April alone, a record of four million Americans handed in their resignations, indicating that large numbers of people are seriously rethinking their careers. This phenomenon referred to as the Great Resignation demonstrates clearly that things are finally shifting. What would you like employers, as well as employees, to bear in mind in this unprecedented situation?

Actually, these trends have been ongoing for some time now. The younger generation prioritises different values, such as work-life balance, corporate mission and social responsibility. As a result, regions and cities are beginning to understand that talent holds the bargaining power, and I believe that the Great Resignation falls under that category as well. There is now a considerable number of people who can afford to pick and choose as they see fit and that’s exactly what they are going to do.

In general, employers must take into account that people have more demands, particularly when it comes to issues affecting the quality of their lives. If people prefer to work remotely for a couple of days a week, then employers must find ways to accommodate those wishes. Overall, the whole labour market is undergoing major changes and working arrangements going to change accordingly.

At the same time, there are large numbers of people who can’t pick and choose as they please. We must bear in mind that the option to work remotely is still a privilege that is not available to everyone across the board. Owing to that, we are witnessing an extremely complex and polarising divide – some people are able to pick and choose based on their personal preference, and there are also those who do not enjoy such privileges.

Finally, we both have very positive experiences with remote work and we know a lot of those privileged people who can pick and choose where and how they would prefer to work. For instance, the majority of Estonian
e-residents no longer associate their daily work with a specific geographic location, instead they keep moving around the world to find the best opportunities, or vice versa, they stay at home and work for companies located in other countries. Over the years, the Estonian e-Residency team has amassed a lot of insights about those kinds of people, but what about academia, are they also paying attention to them? Can we expect a surge in research papers analysing these trends?

All things considered, this is still a relatively new field of research. In the past, people sought work abroad mainly to improve their economic situation and opportunities. It is only in the last 15 years that countries, companies and cities have started to engage more proactively in order to attract and recruit foreign nationals. Naturally, these trends have piqued the interest of researchers who are curious to know what affects labour mobility, especially for people who don’t actually have to relocate. How to make sense of people who have decided to relocate as a lifestyle choice or for other reasons? Changes in the global labour market are so swift that that research outcomes are needed at a much faster pace than the research process allows.

In Estonia, there are not too many researchers engaged in this area, but we are very good at practical implementation and have introduced several innovative solutions relatively quickly. I believe that the current situation where the researchers are still playing catch-up will continue for the next 5 to 6 years. Good luck!

Ave Lauren is a holds a PhD in Economic Geography from the University of Cambridge where she focused, among other things, on the migration to Silicon Valley. As part of her research, Lauren has collaborated with technology companies such as Intel, Apple, Google, Huawei and Tencent. Currently, she serves as a senior lecturer at the Estonian Business School (EBS) and a migration expert at the European Migration Network (EMN).

Lauri Haav has been the CEO of the Estonian e-Residency Programme since January 2021. Prior to that, he was among the co-founders of and held management positions in Estonian IT and fintech companies such as Pro Expert, Monese and Helmes.

Two digital nomads share their experiences with the Estonian e-Residency Programme.

Lavinia Iosub

Estonian e-resident from Romania and managing partner in a company facilitating co-working

“I have been working remotely, in one way or another, for more than 10 years and I am excited to see how these novel ways of working and living are gradually gaining ground around the world. The global COVID-19 pandemic has provided people with an invaluable opportunity to reflect on how they want to work, while also ensuring a better balance between family and work life. There’s no doubt that remote work is here to stay. I believe that this newly discovered flexibility and the freedom of choice will foster more productive teams.

As an Estonian e-resident, I am grateful that this country has given me the opportunity to partake of one of the world’s most advanced digital societies. Thanks to the convenient and secure digital services offered to all e-residents regardless of their physical location, I can focus on developing my business, instead of being mired in bureaucracy. I am looking forward to my very first visit to Estonia and I have a feeling that I will fall in love with this country even more.”

Mattia Montanari

Estonian e-resident from Italy and co-founder of a branding agency

“Three years ago I decided to become a digital nomad. Together with my partner, we left behind our fancy offices in New York and Milan, to explore this novel and exciting lifestyle. As a digital nomad, I can live my life according to my own rules, which I consider invaluable. This applies not only to work, but extends to all areas of life. Remote work provides an excellent opportunity to design a uniquely personal career path, while also maintaining the balance between family and work life.

As an entrepreneur, I feel that we live in a world where we must constantly adapt to changing circumstances. The possibility to work remotely and use Estonian digital services provides me the necessary flexibility. The Estonian e-Residency Programme empowers entrepreneurs who want to run their business regardless of location. In this respect, Estonia is a visionary pioneer and I believe that countries around the world will sooner or later follow its example because the future of work knows no borders.”

Originally published in Estonian in Edasi / Photos: Annika Haas:

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