Torben Dall Schmidt (p), Wenzel Matiaske, Martina Maas, Christoph Halbmeier

Rolf Sternberg

The emergence of the COVID-19 pandemic and global spread of SARS-CoV-2 challenged firms. Some challenges arrived from lockdown policies making possibilities of home office work eminent. First partial lockdowns in Germany occurred as of March 22 2020 and was ended on May 4 2020, but the second wave of infections brought some curfew measures and another lockdown (light) on November 2 2020. More lockdowns were seen in later waves. The use of home office became relevant for some jobs/businesses and depending on firm expectations (e.g., Bartik, et al, 2020; Buchheim et al., 2020; Kelly, 2020; Zhang et al., 2021). COVID-19 is furthermore seen as a disruption factor in terms of propelling digitalization and potentials for home office in firms (e.g., Nagel, 2020; Amankwah-Amoah et al., 2021).

A sudden change to remote work or hybrid remote work following COVID-19 may change the spatial equilibrium. Delventhal et al. (2021) points to a change in cities, as jobs move to the core of cities, residents to the periphery, travel times drop and real estate prices fall in the core. And importantly, remote workers see large welfare gains. Even so, evidence from Brynjolfsson et al. (2020) suggest that switching to remote work is highly related to COVID-19 incidence rates, which questions the permanency of remote work as incidence rates fall or lockdowns are lifted. They also point to a higher prevalence of switching among information workers, which points to possible urban versus non-urban differences.

We provide evidence on three issues related to this literature. Firstly, we ask if there is an urban deficit in the use of home office (remote work) based on survey data among German firms from the new SOEP-LEE2 data. Secondly, we ask to which extent the use of home office is anchored in regulations and agreements in firms and whether the prevalence of such regulations/agreements differs between urban and non-urban areas. A higher prevalence may be interpreted as reflecting a more permanent change to home office in the organization of work by firms. Finally, we also attempt to provide some insights into the extent that the use of home office have different wage effects between urban and non-urban, with the caveat of observing short run wage rigidity differently across geographies. We use new SOEP-LEE2 data linking the SOEP-Core data to firms. We categorize locations of employers into urban and non-urban areas to analyse possible urban home office deficit.

Wojciech Dyba (p)

Torben Dall Schmidt

The Covid-19 created a sudden and unexpected chance for the faster digitalisation of companies in Europe. Our research aims at answering the following questions: (1) Which aspects of digitalisation in European companies accelerated during the COVID-19 pandemic?, (2) What role in digitalisation of companies in Europe during the Covid-19 played entrepreneurship of managers, national policies, activities of Digital Innovation Hubs?, (3) Which solutions utilising digital technologies introduced in the European companies to cope with the COVID-19 situation will still be used after the end of the pandemic?

The study is based on the online survey conducted between October and December of 2021 among 124 experts in digitalisation from 22 European countries, representing Digital Innovation Hubs and administration offices. The results obtained allow to draw the following conclusions: (1) The Covid-19 pandemic (the sudden absence of workers, restrictions concerning functioning of companies) led to the acceleration of the digitalisation of companies in Europe. In companies rendering services and larger in terms of size the process is perceived to be faster than in manufacturing and smaller firms. The process is especially evident for newest software technologies allowing online meetings, remote work and e-commerce. (2) Online meetings and reduction in business travel are believed to become a universal in Europe, long-lasting effects of digitalisation in companies in times of the COVID-19 pandemic. In countries characterised by high innovativeness and high value of the Digital Economy and Society Index (DESI) additional long-lasting effects will probably include popularisation of remote working (at least on some working days) and flexible workspaces – both of which may lead to the reductions in overall office space used. (3) There are differences in barriers and actions considered as most effectively supporting digitalisation in groups of European countries, especially between old-EU countries (EU-15) and new-EU countries with EU candidates.

The research is one of the first attempts to evaluate digitalisation paths in European companies in times of the COVID-19 pandemic and one of the first survey among a panel of experts assessing possible long-lasting effects of the pandemic on the digitalisation of companies.

Louis Knüpling, Rolf Sternberg (p)

Wojciech Dyba

The COVID-19 pandemic has substantially increased working from home in several sectors. Already existing potential for remote work has been used by many for the first time. An important precondition for successful work from home, however, is a sufficiently fast internet connection and certain hard- and software skills. Both, the infrastructure (first-level divide) and the skills (second-level divide) are unevenly distributed across space. In Germany and Norway, for example, which are the study regions in this presentation, there is (among other spatial disparities) a substantial urban-rural digital divide on both levels. At the same time, housing costs increase sharply in large urban areas and increase the pressure to move into suburbs or rural areas in commuting distance to the urban center. During the course of the pandemic news media has regularly shown anecdotal evidence of relocation decisions of highly-skilled (especially families with children) out of the urban centers. This highly topical issue clearly deserves scientific attention, which is why in this presentation we theoretically discuss the spatial implications of the interplay of the following trends:
1. Increasing potential to work from home in many occupations (particularly for the highly-skilled)
2. Rising housing costs (and other negative externalities of large cities) in the urban centers, and (to a lesser degree) in suburbs and areas in short commuting distance
3. Increasing digitalization of rural areas with, nevertheless, disparities between different rural regions in digital infrastructure and digital skills
4. Increasing potential for digital entrepreneurship outside the densely populated urban centers
Thereby, we will contrast the opposing arguments of the ‘death of distance’ proponents on the one side, and the proponents of the importance of face-to-face interaction in spatial proximity on the other side.
We will support our argumentation in favor of diminishing spatial disparities between urban and rural areas with exploratory empirical evidence using data on working from home potential, digital infrastructure, digital skills, and mobility patterns for regions in Germany and Norway.