rethink sustainability
When working from home becomes the new normal
As workers start to drift back to their offices, often in staggered numbers, there is little belief that the working world will go back to the way it was before, at the beginning of 2020. Netflix chairman, Reed Hastings, said that he expects workers to return to the office four days a week and work from home one day per week.
While working life may not change as drastically as some suggested, it certainly illustrates how workers will need to adapt to home working for a significant part of their future. And it is not just workers - university students have not returned to their desks, but to their laptops as semesters start around the world. And for some, the change has led to them upping sticks and moving away to embrace remote working.
As the world of work changes, we look at companies that are taking innovative steps to ease the transition to working remotely and we explore how that will benefit investors.
Learning from home
As students begin their new terms at home, educational technology companies have prospered. The number of new users in the Bangalore-based educational technology company BYJU’S increased by 200% in mid-May after its content was made available for free during lockdown. Earlier this month it was announced that the company has been valued at $10.8bn after a new financing round. It comes at the same time as the Indian start-up Unacademy raised $150m brining its valuation to $1.45bn. The rise in digital learning in India has come after authorities shut down the schools, in the aftermath of the pandemic, and parents turned to online educational resources for their children.
Although there was huge growth in the online sector beforehand, investors will now be looking to see how online learning will continue after schools go back. The pandemic accelerated services such as Alibaba's DingTalk which took on 100,000 new cloud servers in just two hours in order to cope with demand. The rise in online learning prior to the pandemic is also apparent in post-graduate study. For example, the number of applications for classroom-based MBA courses dropped over the last two years but online demand increased.
The shift online is hoped by some to educate swathes of people in courses they would otherwise not have access to. It also opens up opportunities to make education a more personalised experience. Students can get different, tailored made experiences which brings them added value. In the UK, the move online is just the first step in a journey to shifting the country towards a high-skill economy.
However, the sector has not been without teething problems when taking on larger audiences. This happened in the US as millions of schoolchildren returned to their desks with their laptops and were hit with a series of technical glitches.
Zooming up profits
In the early days of lockdown, the novelty of talking to each other via laptop was still fresh. Conference calls, check-ins, casual drinks and even dates were taking place on a small number of services. And the companies offering these online services quickly saw the effect on their balance sheets.
Zoom saw the use of its software jump 30-fold in April alone as people were forced indoors. At one peak stage, there were more than 300 million participants in meetings every day. Earlier this month, the financial results of the boost were clear when the company reported that in the last three months, the company had reported revenues higher than for the entirety of 2019.
Zoom is of course not the only one that we have turned to. Amongst others, Houseparty became the chat app used for hangouts with friends. As a result, it ranked as the number one app in 17 countries at one stage.
What investors will now be looking for is whether these companies will be able to maintain their momentum when the pandemic eventually ends and life returns to a, albeit changed, new normal.
Setting sail for sandy shores
While the forecast that people will work from home one day a week may be seen as a conservative idea, others are taking the side effects of the pandemic to another extreme. How? By moving country, and often more than once. Recently, we have seen a rise in the number of people who have become Digital Nomads. These are workers who can set up and do their job anywhere they can connect to the internet. They can be seen in coffee shops and temporary workspaces around the world and a significant industry has built up around advising and providing services for those who work in abroad.
National governments have attempted to profit as a result of the growth of digital nomads, hoping that their economies will benefit from the money these nomads will spend on accommodation and everyday life. In Barbados, where the country's tourist industry has been heavily impacted by the pandemic, a 'Welcome Stamp' has been launched. The special visa allows workers who earn $50,000 or more a year to live there for 12 months and be exempt from the local income tax. In Estonia, a digital nomad visa has been set up for people who work for a non-Estonian company and earn just over €3,500 a month.
A changing workspace
For many, the pandemic has accelerate expected events with an increase in remote working being one of the them. Whether that happens in the moderate way or not, it will still have ripple effects across affected industries such as those involved in e-learning and video-conferencing. The idea of opening your laptop on a foreign beach has already been growing in recent years and we can only expect the pandemic to hasten this trend.
Emissions may have slowed during lockdown but are now heading back in the direction of pre-pandemic levels. And concentrations of greenhouse gases in the atmosphere hit a record high this year and are continuing to increase, according to the UN. The idea that people will no longer be travelling to work on one day may seem welcome news for those concerned about the catastrophic effects of climate change, but it is only a drop in the ocean compared with the dramatic reduction in emissions required to meet the goals of the Paris Agreement.
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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