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Digital Nomads’ Effects on Host Cities

 Digital Nomads’ Effects
When COVID-19 hit, remote work skyrocketed allowing many professionals to work wherever they wanted to, leading to a new type of traveler: the digital nomad, “people who embrace a location-independent, technology-enabled lifestyle.” The main demographic of digital nomads are self-employed, well-educated young men working in the fields of technology, education and training, sales, market and public relations, consulting and creative services.

Digital nomads’ effects on host cities are both positive and negative as it creates economic opportunity, but also contribute to unwanted side effects for the locals. Two informative examples of digital nomads’ effects on host cities are Chiang Mai, Thailand and Mexico City, Mexico.

The Original Digital Nomad Magnet City: Chiang Mai

Chiang Mai, Thailand is known as one of the largest hubs for digital nomads in the world and the cultural center of Northern Thailand. The main attractions of Chiang Mai for digital nomads are their convenient working spaces, various choices for accommodations, low cost of living and friendly locals. Chiang Mai is one of the best and oldest examples of digital nomads’ effects on host cities as it hosted these travelers long before the pandemic.

The effects of digital nomadism on Chiang Mai range from economic and socio-cultural to digital/built-environmental impacts. In regards to the economy, these affluent visitors help the local economy by purchasing local products and services like accommodations and co-working spaces. Thailand also collects visa fees from digital nomads although they are low. Although not a direct economic benefit, locals and interviewees for the research on digital nomads’ effects on host cities noted that another benefit is skill-sharing as digital nomads inspire locals into entrepreneurship. The negative economic impact is the price increase and gentrification in areas where digital nomads live, which has driven out locals who work for a normal wage.

Socio-Cultural Impact

The socio-cultural impact on Chiang Mai includes a positive relationship built between locals and digital nomads as these visitors consistently made an effort to respect local culture and customs, although many digital nomads do not learn Thai. Locals often prefer this type of foreign visitor to normal tourists, according to the research. Exposure to digital nomads has also increased the locals’ interest in digital work. The negative impact of digital nomads is their privilege, noted especially when the pandemic hit and Thai people were out of jobs, while the digital nomad community did not face such an impact.

Digital nomads also impacted the digital and business presence of Chiang Mai as they created coworking and coliving spaces in Chai Mai and brought in businesses that cater to American and European visitors like Amazon drop shipping storefronts, according to the same research. The presence of social media in distributing information about the lifestyle of digital nomads has boosted Chiang Mai’s already great popularity, according to the research. Overall, digital nomadism in Chiang Mai has grown and benefited the local community but has also contributed to unwanted impacts like pushing locals out of previously affordable neighborhoods.

The New Hub: Mexico City

For digital nomads, the economic benefit of living in a low-cost-of-living city like Mexico City yet still earning European or American salaries is huge. Their “purchasing power” is above the national average with the average salary of Mexican workers coming in at 4,300 pesos compared to the average Mexico City inhabitant’s average salary of 6,000 to 10,000 pesos. This leaves many locals unable to pay rent in previously affordable, popular neighborhoods like Hipódromo Condesa whose rent has risen from an average of 18,000 pesos per month to 60,000 pesos per month. Many Mexican workers have to move outside the city, which adds to their commute and leaves them in neighborhoods with few services and more pollution.

Although digital nomads’ effects on host cities bring economic benefits, according to Airbnb, the restaurants, transportation and tourism services in Mexico City brought in about 9.3 billion pesos, Mexican workers do not always see this money, El Pais reports. Many digital nomads from Europe and America do not tip appropriately due to different views on tipping, leaving Mexican waiters unable to keep up with already high inflation. Although the long-term benefits of digital nomads’ effects on host cities like Mexico City are still to be determined, it is important to note the new stresses and new realities local Mexicans must face as Mexico City becomes a popular digital nomad location.

The Future of Digital Nomads

A research study MBO Partners’ 2022 State of Independence conducted concluded that 16.9 million American workers describe themselves as digital nomads. This is a 9% increase from 2021 and a 131% increase from pre-pandemic 2019. As of 2022, 69% of digital nomads reported that they plan to continue as digital nomads for the next two to three years.

As digital nomads continue to increase in number, many countries implement special visas or programs to promote longer-term stays. The Remotely From Georgia program requires digital nomads to stay for one year while proving they have the financial ability to pay taxes and accommodations. Thailand offers digital nomads 10-year visas and low tax rates.

Moving forward, many hubs for digital nomads will likely adopt more measures like the one that Héctor Magaña, economist and professor at the Mexico City Business School, Monterrey Tech, recommended for Mexico City. He recommends Mexico regulate rent in accordance with the salaries of the inhabitants of the city in order to balance the inequity, El Pais reports. If states do not limit the influx of digital nomads, housing costs could continue to rise. Overall, the takeaway of digital nomads’ effects on host cities is that while certain cities become magnets for digital nomads, the city must create clear rules to protect their locals.

– Arden Schraff
Photo: Flickr

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Visa’s Investment in Africa’s Digital Economy

Africa's Digital Economy
As the world’s digital economy expands at an exponential rate, it continues to be a vital component in raising the world’s impoverished nations and people out of poverty. By the end of the decade, 70% of new value in the global economy will transpire from digitally-enabled businesses. There is a great opportunity for impoverished and developing countries to boost their own economies and raise their people out of poverty by having access to these emergent digital markets.

However, Africa has been lagging behind in its digital economic growth. That is why Visa, a large multinational financial services corporation based in the United States, has pledged to invest $1 billion in Africa’s digital economy by 2027, helping create opportunities for more Africans to engage in the digital market, as well as have access to safe, reliable financial services and technologies. 

Identifying the Problem

The growth of Africa’s digital economy has been stunted and uneven. As of 2015, almost 500 million adults in Africa or nearly 40% of Africa’s total population lack access to formal financial services including banking services and access to digital purchase platforms. Compounding this issue is the fact that things like digital payment methods are not readily available. More than 40 million merchants (i.e, stores, vendors, etc.) in Africa do not accept digital payments and less than 50% of the entire adult population have made or received digital payments of any sort as of December 2022. 

Digital economic inequality is not only present when comparing Africa to developed nations, but also within its own borders as well. For example, in Central Africa, only 11% of adults have a bank account, compared to 51% in the far more developed region of South Africa. This stark divide is especially present in access to financial technologies. For example, while there are 50 ATMs per 100,000 individuals in South Africa, there are only 11 per 100,000 individuals in North Africa and less than five per 100,000 individuals in all other African sub-regions.

Visa’s Pledge

This lack of access to financial resources and technologies, especially in the global digital market, is a large issue facing the impoverished populations of Africa. It is not insurmountable, however. Visa believes that Africa can overcome its issues, which is why the company has pledged to invest $1 billion in Africa by 2027 to accelerate the growth of the continent’s digital economy. Visa, one of the largest financial companies in the world, has established a plan to upscale the company’s African operations on all fronts, including the deployment of new technologies and providing opportunities to educate locals in digital economics.

Over the next five years, Visa will establish local operations for the first time in several impoverished African countries, including the Democratic Republic of Congo (DRC), Ethiopia and Sudan. Part of this growth involves the implementation of new technologies that make it easier for both consumers and merchants to make digital payments, like Tap to Phone, a technology that allows people to make purchases with a simple tap on one’s smartphone. Such innovative solutions will not only encourage more consumers and vendors to make digital payments but will also make it easier and safer for them to do so.

Visa has also pledged to invest in education and empowerment for those especially struggling to enter the digital economy. For example, the company has teamed up with She’s Next, a global advocacy program for women-owned small businesses, which brings funding, mentoring and networking opportunities to female entrepreneurs across sub-Saharan Africa. Visa’s plan to increase financial literacy also focuses on crossing language barriers; for example, it is working on the first-ever Arabic version of its financial education program, Practical Money Skills.

Visa’s Pledge to Develop Africa’s Digital Economy

There is still a long way to go to connect Africa’s impoverished people with the world’s digital economy. However, thanks to the work of Visa and other organizations, and to increasing awareness of their need, there will be great progress in accelerating Africa’s entrance into the global digital economy.

– Elijah Beglyakov
Photo: Flickr

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Libya’s Digital Strategy

Libya’s Digital Strategy
Libya is a country in North Africa. One of the largest countries in Africa, Libya has many deserts and is rich in culture and natural resources. There is a greater requirement for a digital lifestyle in today’s culture. The expanding digitalization in Libya is now undergoing exploitation effectively for the country’s benefit. Beginning on February 15, 2022, in New York, the United Nations Development Program (UNDP) in Libya will concentrate on a new digital strategy to help communities and countries use digital technology as a tool to help combat and expand economic opportunity, promote diversity and reduce inequality. UNDP intends to keep up with the constantly evolving digital landscape and advance the Sustainable Development Goals (SDGs) with its daring new Digital Strategy 2022–2025.

Implementation

According to UNDP Libya, the strategy provides a three-pronged strategy for how UNDP would help countries profit from digital technology. First, UNDP will integrate digital into its work, experiment with new methods and technologies, scale up effective solutions and use foresight to comprehend potential futures in order to amplify development outcomes. Second, it will ensure that everyone is included in digital technology by making building more “inclusive digital ecosystems.” Third, UNDP will keep evolving and setting the bar high in order to satisfy present and foreseeable technical needs. To promote cooperation around the ethical and sustainable use of technology, UNDP will also interact with business entrepreneurs, academics, researchers, students and policymakers.

The Reason the Digital Strategy is Necessary

Libya has grappled with the problem of conflict since April 2019. Unfortunately, this has negatively affected Libya’s services such as electricity. According to a Human Rights Watch article, “The United Nations-recognized and Tripoli-based Government of National Accord (GNA) has been embroiled in an armed conflict with the rival Interim Government based in eastern Libya.” As a result, violence impeded the delivery of essential services, including power and health care. Armed groups on all sides persisted in carrying out illegal killings and indiscriminate shelling that killed civilians and destroyed crucial infrastructure.

In addition, when Libya’s provisional unity government formed in March 2021, internet freedom declined significantly. The population became less able to have access to the internet. The population grew adamant about better living conditions and less corruption in 2020 and as a result, local authorities throttled cell service. Libya has endured technological issues and the plan will guide UNDP’s efforts to address the new issues that the new digital environment brought on. There is also a large digital gap that UNDP is trying to diminish. There is a digital gap of about 2.9 billion people in developing countries and this consists mainly of women and children. Digital technology has the potential to amplify biases and further inequities if it is not used responsibly.

A Promising Future

Libya’s digital strategy has a strong potential for success. It will help Libya to benefit from a more digitized economy. According to UNDP Libya, “the strategy complements the U.N.’s global efforts to expand access to affordable broadband and enhance the digital capacity of key groups including women and people with disabilities – ultimately creating new opportunities like jobs while boosting human development.” Libya’s Digital Strategy is helping lessen the burden on the less fortunate by ensuring that everyone has access to digital futures, which can improve job opportunities and education.

– Frema Mensah
Photo: Flickr

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A Digital Economy for Mongolia

Digital Economy in Mongolia
Mongolia is a country in East Asia that borders China and Russia. As the country continues to progress, the public has an increased desire for information and communication technologies that must be met. Known as the world’s most heavily populated country, technologies are needed, especially in Mongolian rural areas, in order to improve education. Fortunately, on June 6, 2022, Mongolia made a significant effort to address its technological challenges by accepting International Development Association (IDA) credit with the intention of creating a more digital economy for Mongolia.

The Implementation

The World Bank Board of Executive Directors approved a $40.7 million International Development Association (IDA) credit in order to help Mongolia increase digital skills and training as well as improve online public services. This will help make technology more common in Mongolia. According to Andrei Mikhnev, World Bank Country Manager for Mongolia, the Mongolian youth will develop more skills this way and become more familiar with the technology. It will improve their knowledge and help them become eligible for a wider range of jobs. In addition to this, women, people with disabilities and people living in rural areas will be able to access basic digital services, explained Mikhnev.

Mongolia is preparing to build a strong digital economy. This includes more Mongolians having better access to the internet. According to World Bank, as of 2020, 63% of Mongolians use the internet.

A more digital economy ties into a better economy, with access to internet services, faster productivity for businesses and the opportunity for online education. This project aims to assist in the development of a more digital economy for Mongolia as well as to provide new opportunities for Mongolia’s development.

According to the World Bank, the project will help 13,000 civilians improve their digital skills. In addition to this, it will “create 3,000 new digital jobs for youth and women and help digitalize 2,000 small and medium-sized enterprises (SMEs) to improve their competitiveness and resilience in the global economy.”

More Digital Economy for Mongolia

A more digital economy for Mongolia means a better way of life. A better digital economy could bring more online educational opportunities. It is essential that homes have electricity and internet in order for Mongolians to proceed with education at home. However, as of 2020, 18.4% of Mongolian homes had limited access to energy.

Having a broader range of educational opportunities could help create more jobs and increase the possibility of income. In addition, according to World Bank, this “will assist the government in adopting an integrated, whole-of-government approach for its online public services and digital investments.”

The effect that the Mongolian economy has on Mongolians has led to protests, with the youth arguing that parliament does not do its job in ensuring that the economy is suitable for a comfortable life. According to Jacobin, “Mongolians’ anger at the state stems from an overwhelming sense that politicians live in their own bubbles, isolated from the lives of ordinary people.”

Mongolia’s plan stands as an indicator of the progression of a digital-savvy economy. According to the Mongolia Sustainable Development Vision 2030, Mongolia’s goal is to provide internet coverage to 70% of the population by 2020, 90% of the population by 2025 and 95% of the population by 2030. Mongolia’s progress could help create a more digital economy, helping its inhabitants live an easier lifestyle.

 – Frema Mensah
Photo: Flickr