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Teleworking and Globalisation

Huws U, Jagger N, O’Regan S
Report 358, Institute for Employment Studies, July 1999

Cheap telecommunications, the spread of computing, and globalisation are creating major change in the location of work, within and between countries. No tools have yet been developed to investigate the new spatial employment patterns. This pioneering study is the first to bring a systematic comparative approach to measuring and mapping this emerging global division of labour in telemediated work, explaining national differences in the uptake of teleworking and developing a methodology for identifying the world’s most favoured sites for particular activities.

Globalisation

There is a growing recognition that the globalisation process plays an increasingly important role in shaping work patterns. However, most literature on the subject is highly anecdotal, based on a few well-publicised examples. This study introduces a note of realism into the hype. Although in theory (when it comes to work involving the processing of information which can be delivered down a telephone line) it is possible for anything to be done by anyone anywhere, in practice choices are constrained by factors which vary according to the specific activity involved.

Using an innovative analysis of over 50 variables for 206 countries, this study uses cluster analysis techniques to group countries and identify their position in the emerging global division of labour in information-processing work. An exploratory study, it offers a conceptual framework for more detailed research in the future, and points to the indicators which might enable such an analysis to be carried out in a manner which is both systematic and rigorous and takes account of the qualitative, as well as quantitative changes taking place in the organisation and distribution of work.

Call centres

One of the most rapidly developing forms of delocalisation is the call centre. Concentrating a group of functionally specialised workers on a remote location with a telecommunications link to customers does not just bring about a relocation of employment within countries but also between them, with international call centres constituting a growing proportion of the total. The growth in outsourcing and virtual call centres further complicates the geographical picture.

The large-scale relocation of telemediated work within countries, in order to serve the domestic market, mainly occurs in the developed world, but is expanding dramatically into a global phenomenon. The study concludes that its development in any given country is likely to run in parallel with general economic development, corresponding closely with the growth of domestic consumer markets and financial services, and also with the development of its telecommunications infrastructure.

Competition to attract international call centres (serving a customer base beyond national boundaries) is fierce. In addition to such factors as telecommunications infrastructure and labour costs, time zone and the language skills of the workforce play an important role. The report includes tables listing countries according to these factors.

Off-shore data processing

Companies based in developing countries have been outsourcing routine back-office work, such as data entry, to lower-waged countries since the late 1970s. However, this follows a different geographical distribution from call centre work, with language and communication skills playing a much smaller part, whilst other factors (such as low wage costs) become more critical. The study summarises the literature and examines the indicators most likely to be associated with this type of employment.

Software development

The rise of the export software industry in such countries as India, the Philippines, Russia and Bulgaria has drawn attention to the delocalisation of more highly-skilled information processing work. The new global distribution of work in this sector follows yet another pattern. Here, a good supply of highly skilled work, especially computer scientists, constitutes an important attraction, but by no means the only one.

The study includes a discussion of the complex difficulties of measuring trade in information products like software which may be delivered over the internet and are therefore not registered in the statistics in the same way as commodities which are physically transported across national frontiers.

National differences

This study isolates the factors associated with high and low rates of teleworking. Differences in national take-up rates of home-based and mobile teleworking cannot be explained simply in terms of variations in the cost and availability of information and telecommunications technology; nor can differing sectoral and occupational structures provide a complete explanation, although this too may play some part. The study explores other variables including urbanisation, household size and structure, the national regulatory context and type of welfare regime and organisational culture, and assesses their impacts on the development of teleworking and the specific forms that this might take in any given national context. In combination, these factors appear to offer a convincing explanation of why, for instance, despite similar levels of economic development, home-based teleworking is more prevalent in Anglo-Saxon countries (eg Australia, Canada, the USA and the UK and in Scandinavia) than in other EU countries.

It also points towards indicators which will enable the growth of teleworking to be tracked in developing countries where it is beginning to appear, without yetreaching critical mass.

The teleworking workforce

The report includes an analysis of the results of the UK Labour Force Survey, currently the only such survey to include questions that keep accurate track of the numbers of home-based teleworkers and their characteristics at a national level. For the purpose of this analysis, teleworkers are defined as people who work at home or use their home as a base at least one day a week using both a telephone and computer.

• 5% of the British workforce can be defined as teleworkers.

• Of these, 68% are male and 32% female. Men make up only 56% of the total UK workforce, so men are over-represented in the teleworking workforce.

• There are major gender differences in the place of work (ie between those who work at home and those who use their homes as a base). 41% of female teleworkers work at home, compared with only 15% of men, whilst over 59% of male teleworkers (compared with only 33% of women) use their homes as a base but work in a variety of locations.

• Teleworking is most likely in mid-career. Only 2% of teleworkers are in the 16-24 age bracket (compared with 14% in the whole workforce), and only 12% aged 55-64 (with a further 3% aged 65 or over). 32% are aged 35-44 (compared with 25% of all workers) and a further 29% aged 45-54 (compared with 22% of the total workforce). 22% of teleworkers and 26% of all workers are aged 25-34.

• Nearly three-quarters of teleworkers (73%) are married or living with a partner, compared with only 58% in the workforce at large.

• 77% of teleworkers work full time. As expected, female teleworkers are more likely to work part time than men (47%, compared with 12% of men).

• 52% of all teleworkers are employees, with 47% classified as self-employed and the remaining 1% as paid family workers.

• 9% of teleworkers have disabilities, roughly the same proportion as in the workforce as a whole, with no significant differences relating to type of disability.

• The banking, finance, insurance and business services sector accounts for 34% of teleworkers, compared with only 15% of the total workforce.

• Teleworkers are more than twice as likely as other workers (23% compared with 10%) to be in professional occupations, and considerably more likely (26% compared with 16%) to be managers, or associate professional or technical staff (18% compared with 10%).

Economic development

In assessing whether economic development has occurred, it is necessary to consider qualitative indicators as well as quantitative ones. Even if large numbers of jobs are created, the value they add to the local economy will be limited if, for instance, they are very low paid, are temporary in nature, if they create health hazards, or if they bring no new skills or knowledge to the local community capable of being transferred to locally-owned enterprises.

Technologies enabling the new international division of labour bring an unprecedented ‘shrinking’ of distance in terms of immediacy of communication. This often produces a situation where workers may be in closer and more frequent ‘virtual’ contact with customers, managers, subordinates and co-workers located on other continents, than they are with their immediate neighbours in ‘real’ space, but with whom they have no telematic links.

A side-effect of this new situation is an unprecedented convergence in labour processes and working conditions between workers in different countries. If they work for the same transnational corporations, they may also find that these near-standardised working practices are also embedded in corporate cultures which are increasingly applied universally, no matter where they are based geographically.

Whether this represents an improvement or a deterioration in working conditions for the workers concerned will depend on what it has replaced, and what the available alternatives may be. The challenge to policy-makers is to identify the new opportunities opened up in any given national or regional context by these developments.

Teleworking and Globalisation, Huws U, Jagger N, O’Regan S. Report 358, Institute for Employment Studies, 1999.
ISBN: 978-1-85184-287-2. £30.00. [PDF price: £10.00]

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