Which Countries Were (And Weren’t) Ready for Remote Work?

30 / 04 / 2020

By Harvard Business Review - -

As the world races to contain the spread of Covid-19, socially distant modes of working have become the norm. What that looks like, however, varies wildly. Countries have taken vastly different measures to stop the spread of the virus. Some, such as India, mandated complete lockdowns. Others, such as Singapore, have been more measured in turning off face-to-face working and only declared a lockdown recently. And some, such as Brazil, have even dismissed the need to do so. Many countries, such as Germany, Denmark, New Zealand, among others, are planning a cautious re-opening and in the United States, President Trump has given each state the license to set its own easing calendar.

As such, the world effectively has launched a sweeping series of experiments, testing not only how to flatten the curve of the pandemic’s spread, but also how possible it is for their economies to survive when they move whatever is possible online. In other words, we are living through the purest test imaginable of the internet — and are quickly discovering how able it is to recreate a facsimile of the economy-as-usual. This dependence on the online facsimile will be the state of affairs for a significant period even as countries gently lift their lockdowns in phases.

While only part of any economy’s work can be done remotely, the success of moving large swaths of work into “socially distant mode” depends on multiple digital services: telecommunications platforms and apps, such as Zoom and Skype, to keep workers connected; e-commerce to get provisions to remote workers as retail establishments are shuttered or curtailed; and digital media — especially those that can withstand a drop in advertising revenues — to keep people informed and make good business decisions. On top of that, countries need digital payment options capable of handling the surges in transactions.

All of these, in turn, are dependent on internet infrastructure and how able it is to keep up with the spikes in digital traffic, especially with the simultaneous use of high-bandwidth applications. To reduce the costs a country must incur by putting the face-to-face economy on pause, policymakers and technology companies must understand where services are falling short and best practices and benchmarks to make near-term improvements and plan investments for the longer-term, beyond the immediate crisis.

At Tufts University’s Fletcher School, in a research project funded by the Mastercard Impact Fund and administered by the Mastercard Center for Inclusive Growth, we examined this question by evaluating 42 countries that are significant in the global economy and have enacted social distancing measures. Some countries that were missing key data were not included. We scored the “social distance readiness” of their economies using three indices developed with our team, which included researchers, Griffin Brewer and Christina Filipovic:

Robustness of key platforms — technology-mediated remote work, e-commerce, digital media and the country’s digital foundations — key to business continuity
Proliferation and resilience of digital payments options to facilitate transactions
Resilience of the internet infrastructure to traffic surges

Using data to create an apples-to-apples comparison across countries like this creates a simplified picture, but one that we think is useful. The results (higher scores represent better performance along each index) are graphed below.

Scanning the map reveals several patterns and corresponding implications.

There is a divide between rich and poor, but also between the resilient and the fragile: Advanced economies, at the top of the graph have more robust digital platforms, making them better prepared for the pivot to online work than developing economies in the bottom. They also have stronger digital payments infrastructure. However, there are wide variations in internet resilience, meaning the infrastructure may struggle to support the increased demand. Countries on the left of the graph will experience jittery connections and slowdowns relative to “normal” performance, which could hurt productivity.

Readiness is not matched by social distancing mandates, and vice versa: Despite being the best prepared, Singapore and the Netherlands have pursued more measured paths to social distancing. At the time of writing, the Netherlands government advises: “Stay at home as much as possible. Work from home if possible. Go outside only when you need to.” It is experimenting with a less aggressive approach to social distancing relative to its European neighbors. In Singapore, which delayed imposing a lockdown, only 40% of workers in the central business district worked from home at the end of March.

At the other end of the spectrum, India implemented a complete lockdown early — covering 1.3 billion people — despite being among the least prepared across all three indices of the 42 countries studied. While the hardest hit are India’s migrant workers who have no ability to be employed remotely, the lack of preparedness is particularly apparent in the dilemma of the country’s information industry. As of the second week of April, a third of its IT workers were still going into work as they manage essential functions for companies worldwide, such as accounting, payments, billing, human resources, and payroll, as part of India’s giant business process outsourcing operations. For India, this state of affairs points to the need for long-term investments in a social safety net and infrastructure.

The United States is ready, but not ready enough: Despite some concerns, the United States is well poised for business continuity, with robust digital platforms and digital payment infrastructure. But with businesses asking employees to work from home, surges in digital traffic have stressed the internet infrastructure. Internet traffic was up 18% on March 22 since the beginning of the year. In San Francisco, it was even higher: up 48.5% at the end of March since the beginning of the year. At the time of writing, across the U.S. download speeds have held up well, but the experience has varied — 88 out of the top 200 most populous cities experienced some form of network degradation in end-March. In New York, the drop was 24%, while, 3 cities experienced drops of over 40%.

The aggregate measures, however, hide extreme unevenness across the country. Poorer and rural areas are more vulnerable because they have weaker infrastructure. Broadband access is among the most expensive anywhere in the world, due to insufficient competition. Only 19% of rural Americans have an alternative to their current broadband provider and competition in broadband at faster speeds is virtually non-existent. In addition to getting the providers to pledge to keep Americans connected, we suggest that regulators and policymakers take actions following on FCC Commissioner Jessica Rosenworcel’s recommendations: using the FCC’s universal service powers to provide hot spots for students and hospitals, and ease data caps and overage fees. Over the longer term, the U.S. internet infrastructure needs to be upgraded to increase speeds overall and ensure uniform and more affordable access.

The E.U. is not ready: Much of Europe, with some exceptions, suffers from middling robustness of the platforms and vulnerable internet infrastructure. Speeds in much of Europe are much lower than in the U.S. overall, and the infrastructure is older. This means that high-bandwidth-using services that are less critical to economic productivity have to act urgently to reduce their traffic. Netflix and YouTube already have committed to do so.

This urgency is even greater in the southern E.U. nations, particularly Italy. As the graph shows, it is both less resilient and its platforms aren’t sufficiently robust, performing among the poorest of the European nations we studied. Alarmingly, Italy is also one of the countries hardest hit by Covid-19, and is just exploring how to end its extended lockdown.

Among the northern EU nations, Sweden, has been the best positioned to do socially distant work in terms of robustness of the key digital platforms and use of digital money. The Achilles heel of Sweden’s internet infrastructure, however, is a much lower capacity to handle surges relative to, say, its neighbor Norway. On the other hand, Sweden has taken a less aggressive approach to social distancing, so it may not have run into any constraints as yet.

Some Asian countries have proven to be innovative — and forced reconsideration of long-held assumptions: Being proximate to the origins of the outbreak, some have taken a markedly different approach to using digital technology. South Korea presents an interesting benchmark. Its internet resilience is among the best in the world, as is its use of digital payments, and its platforms are robust, even it doesn’t rank among the very highest. However, it has pioneered a location-tracking app to gauge social distancing compliance and keeping people away from infected areas. Singapore, too, has deployed similar risk-level determination and contact tracing technologies. While these approaches can raise concerns about privacy and surveillance, they have proven to be effective. Now Apple and Google have adapted these innovations to privacy-respecting adaptations of the Asian approaches to Western contexts, thereby overturning initial resistance to using digital technologies for such purposes.

The extreme case is that of China, the starting point of the outbreak, where readiness for socially distant work is much better than in most developing countries, but it is not as robust or resilient as those at the top of the graph. However, once it started aggressively locking down key affected regions, China became a hotspot for the use of a cluster of digital technologies, including AI, location tracking, facial recognition, drones, etc. to contain the spread of the outbreak and enforce social distance compliance. Health code apps are used to issue Chinese citizens color-coded QR codes that indicate risk level and dictate who must be isolated. Depending on how difficult other measures prove to be, we should not be surprised if the far more intrusive Chinese innovations are adapted elsewhere as well.

The developing world is ill-prepared: Unsurprisingly, emerging market countries are the most vulnerable, but many have taken positions at odds with their internet resilience. Mexico and Brazil are more internet resilient than Indonesia or India. Ironically, Mexico and Brazil have brushed aside the need for aggressive social distancing, while India is under lockdown and Indonesia has recently declared one of its own.

For many countries, this crisis casts a spotlight on the gaps overall and unevenness of digital access. (As Warren Buffett has said so aptly, “you only find out who is swimming naked when the tide goes out.”) But, recognizing these shortcomings should help dictate how they choose to develop their next generation of infrastructure. When Napoleon III rebuilt Paris in the 19th century in the aftermath of the cholera epidemic, the epidemic itself was critical in re-imagining the new city. Paris’ wide, open boulevards, which were designed to let in sunlight as a disinfectant, inspire us to this day. It is time we started thinking about the Parisian boulevards we must build beyond this pandemic. An essential part of that should involve the digital systems — the platforms, the digital payments, and the internet infrastructure — the lifelines during the period of socially distant work. And as the pandemic has underscored how interconnected the world has become, it should also underscore that we should try to learn from each other as we rebuild in its aftermath.