While countries with larger shares of their populations able to work remotely have generally fared better economically throughout the pandemic, there are clear outliers.
The big picture: A smooth transition to telecommuting is just one part of pandemic-era economic health. Factors like infection rates and lockdown measures have had massive impacts as well.
Consider the U.K., where 59% of the workforce can work from home but quarterly GDP growth dropped nearly 22% between Q2 2019 and Q2 2020.
- "The U.K.'s unfortunate economic state matches the deadly impact of the virus," says Bhaskar Chakravorti, who is dean of global business at Tufts University and has been studying countries' economic resilience. "More people died in the U.K. than anywhere else in Europe."
- On top of that, the U.K. is disproportionately reliant on the services sector, which has been walloped by the pandemic. More than 10% of its GDP counts on travel and tourism, and the services sector as a whole makes up around three-quarters of the U.K. economy, Chakravorti notes.
What plagued the U.K.'s economy was reflected across Europe, with France and Spain suffering big losses despite having large shares of workers able to telecommute.
The U.S. has fared relatively well — and better than peer nations like the U.K., Canada or Japan — because of its diversified and digitally enabled economy, says Chakravorti. "Even though the U.S. did miserably in terms of COVID management, the economic impact is cushioned by other factors."
The other side: Some of the countries on the lower end of remote work capability, like Indonesia and Turkey, had a tough 2019 to begin with, so their contraction in 2020 looked relatively better.
