Remote work shakes up geopolitics

The global adoption of remote work may leave the rising powers in the East behind.

The big picture: Despite India's and China's economic might, these countries have far fewer remote jobs than the U.S. or Europe. That's affecting the emerging economies' resilience amid the pandemic.

Driving the news: 16% of jobs in China and 12% of jobs in India can be done remotely, per a new McKinsey Global Institute analysis of 800 jobs across several nations. Compare that with the 33%, 30% and 29% of jobs that be done from home in the U.K., Germany and the U.S., respectively.

• That's because a huge share of jobs in India and China are in in-person sectors, like manufacturing, agriculture and retail, Susan Lund, one of the report's authors, tells me.
• And even though the majority of jobs in the U.S. and Europe are also in-person jobs, these countries are much likelier to pursue a remote-heavy future of work than their Eastern counterparts.

What's happening:

• "India has definitely taken a big, big hit because most people simply can’t work from home," says Bhaskar Chakravorti, dean of global business at Tuft's Fletcher School of Business. The country's GDP growth rate fell more than 23% between Q2 2019 and Q2 2020.
• China's economic recovery has been quite successful. But its low share of remote-capable jobs could hurt its future capacity to compete on the global stage, especially if teleworking proves to boost worker productivity as early studies have indicated.
• "In the end, the geopolitical contest between China and the world is going to be a contest for productivity and GDP growth," says Jonathan Ward, founder of the Atlas Organization, a consultancy focused on Chinese and Indian national strategy. "The ability to make productivity gains with remote work could potentially put the West at an advantage."

Worth noting: Even when jobs can theoretically be done from home in India or China, it often doesn't work that way in practice, Chakravorti says.

• In the big cities in those countries, people may be living in close quarters or without reliable broadband access — factors which require professionals to go into their offices to be productive.

The bottom line: Says Chakravorti, "This is going to be quite a turning point in terms of these countries' ability to bounce back."