Virtual work as an emerging export opportunity

It is time to put our COVID-strengthened digital muscles to work to improve today’s industries and create new ones for tomorrow. Through the last decade, companies such as Expert360, 10EQS, Upwork, Whitmart.com and Freelancer have enabled independent professionals to connect virtually with work the world over. While the platforms have had significant success, trading in professional hours has been a niche activity rather than a strategically important export opportunity.

The geographic and business emphasis may differ between the platforms, but the basic principle of connecting people to work is the same. They are different to the recruitment sites such as Indeed and Seek in that the professionals remain independent contractors working on individual assignments. To a greater or lesser extent, these virtual connectors have tried to become something akin to an “Uber” for professional effort without really achieving the breakthrough of that iconic service.

Of course, India and, to a lesser extent, countries such as the Philippines, have become famous for exporting virtual labour through business process outsourcing, development and call centres. Companies operating in these industries have had success emphasising a combination of quality, reliability and salary arbitrage but are not attempting the type of embedded virtual capability which is now possible as a result of the radical shift in the way we all work.

Perhaps the closest analogy is international education. Education is a premium product that universities around the world are now marketing through a mixture of onsite and remote learning. For example, education has grown to be Australia’s most important service industry export and third largest export overall. This only became possible as global barriers came down and education evolved to be increasingly borderless and digitally enabled.

Just as international education was enabled by the reduction in barriers of globalisation, COVID-19 has reduced the digital barriers enabling the same sort of growth in the export of professional skills through virtual work. As a result of the pandemic, location doesn’t matter as it once did (see The pandemic-driven busines shifts). People are now more willing to engage in virtual work in a way that was culturally and technically difficult before.

In the same way as education has had to adjust to a more diverse student body to make international education a success, so the new world of work needs to adjust to a broad, diverse and distributed workforce if it is to leverage the best people regardless of location. There is no doubt that this will include a mixture of individuals offering their services directly and companies aggregating the supply of virtual labour.

Early adopters of this approach to exporting work across borders have been the professional services firms (such as the one I work for). I’ve argued before that great consulting (whether done in person or remotely across borders) needs to be trusted, transformative and transferable. Trusted: consulting only works if there is a close relationship with the client. Transformative: consulting needs to change something about an organisation. Transferable: consulting should leave capability behind. Through the crisis, consultants have learned to achieve all three of these “t”s virtually and clients are more open than ever to working this way.

As this trend continues post-COVID, there will be a deliberate strategy by some countries to enable their workforce to export their effort, virtually, taking on a wider range of activities beyond traditional professional services. The winners in the race for these new export opportunities will be the most innovative companies based in countries that put in place a mixture of supportive policies and digital infrastructure to make this happen.

As the leaders in exporting virtual work to-date have shown, the right policies, enabling digital infrastructure, training and culture around exporting virtual work matters. From tax and education through to digital reporting and ubiquitous connectivity, governments can help take much of the friction out of the virtual deployment of people across borders to undertake productive work.

Over centuries, technology has not only been a force for progress but also economically productive change. The most recent wave of digital technology has struggled to provide the same level of dramatic uplift (see Where is the digital-fuelled growth?) but the effect of the pandemic means that we are finally seeing dividends that go beyond consumer experience and optionality.

While the global economy has been significant shaken by COVID, the impact has been much less than initially expected. For that, we can thank the digital revolution which has allowed work to continue while keeping a significant number of people socially distanced to reduce the spread of the virus. We shouldn’t be surprised, “telework”, as virtual work was originally known, has long been a priority for many governments as they looked for opportunities to reduce the load on our cities. It took 2020 to create the impetus to realise the opportunity.

The apparent overnight success of virtual work has been decades in the making. Let’s hope we don’t fritter away these hard-won digital achievements and miss out on opportunities further afield.