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eWork in Europe
Results from the EMERGENCE 18-Country Employer Survey

Huws U, O’Regan S
Report 380, Institute for Employment Studies, July 2001

a report from the EMERGENCE project

Information and Communications technologies have made it possible for a range of activities involving the processing of information and their transmission by means of telecommunications to be located anywhere in the world where the appropriate infrastructure exists and workers are to be found with the right skills, in a phenomenon which has come to be described as eWork.

But to what extent are organisations actually making use of this potential to relocate work? Which remote sites are being selected? And what are the criteria used for selecting them?

The EMERGENCE project was set up with funding from the European Commission’s Information Society Technologies (IST) programme to map and measure eWork. This report presents the results of a survey of 7,268 employers in 18 European countries: the 15 EU member states plus Hungary, Poland and the Czech Republic.

Computer-aided telephone interviews were carried out by mother-tongue interviewers in fifteen languages from NOP’s international call centre in London. Establishments with a minimum of fifty employees were selected, with the sample stratified by sector, by size and by country.

Demand for eWork in Europe

The broadest definition of eWork encompasses any work which is carried out away from an establishment and managed from that establishment using information technology and a telecommunications link for receipt or delivery of the work.

According to this definition, nearly half of all establishments in Europe (49 per cent) are already practising some form of eWork, as can be seen from Table 1. The largest proportion of this eWork involves outsourcing, although nearly 12 per cent of all establishments use forms of eWorking involving direct employees.

Table 1: Proportion of establishments in Europe, using eWork, by type of eWork

Source: EMERGENCE European Employer Survey, 2000 (IES/NOP) Weighted figures; % of establishments with >50 employees in EU (15) plus Hungary, Poland and Czech Republic. Weighted base: 7,305 cases

Here, it is interesting to note that the stereotypical employee teleworker based solely at home is in fact one of the least popular forms of eWork. Only one and a half per cent of establishments in Europe employ people to work exclusively from home in this way. It is much more common to use the new technologies to support multi-locational teleworking by employees, which is practised by approximately one European employer in ten.

One European employer in fourteen (6.8 per cent) has a back office in another region in which its own employees are based. However, less than one per cent of establishments make use of telecottages, telecentres or other remote office premises owned by third parties as workplaces for their remote employees.

These forms of in-house teleworking are heavily outweighed by the use of eOutsourcing as a mechanism for carrying work out remotely. Over half of all establishments (56 per cent) outsource at least one business service. Restricting our definition only to those that use electronic means of delivery (‘eOutsourcers’) we find 43 per cent of employers making use of this practice.

Much of this eOutsourcing is carried out within the region where the employer is based (34.5 per cent) but substantial numbers (18.3 per cent) outsource to other regions within the same country, whilst 5.3 per cent outsource outside their national borders.

Outsourced forms of eWorking may involve contracts with individual freelancers or with companies.

Nearly one employer in six (17.3 per cent) uses freelancers to deliver some form of information service. When the definition is tightened to include only telemediated freelance work (ie work involving delivery over a telecommunications link), we still find that 11.4 per cent of European employers are using ‘eLancers’.

Call centres make up a significant proportion of eWork. Whilst only 1.4 per cent of respondents have an in-house remote call centre (outside their own region with a direct telecommunications link) no fewer than 15 per cent use an outsourced call centre. For 11.1 per cent of establishments, this involves a direct telecommunica-tions link to the main office.

Functions involved in eWork

Six out of ten of the establishments using eWork use it for software development and support, which is the function most likely to be carried out remotely using a telecommunications link, as can be seen from Figure 1.

Figure 1: eWork by function

Source: EMERGENCE European Employer Survey, 2000 (IES/NOP) Weighted figures; % of establishments with >50 employees using any form of eWork in EU (15) plus Hungary, Poland and Czech Republic. Weighted base 4,657.

The second most common telemediated function, at 38 per cent, is ‘creative work’, a category which includes design, editorial work, multimedia content generation and other creative activities. It also includes research and development.

This is followed by management, training and human resource management (HR) functions, at 19 per cent and customer services at 18 per cent.

Location and choice

A study of the most important destinations for eWork suggests a clustering effect whereby regions build a critical mass on their past reputation for excellence in a given field by attracting more talent and investment in the field, which in turn feeds a continuing cycle of growth. It is striking that, despite the publicity given to the practice of relocating or outsourcing eWork to non-European destinations such as India or the Caribbean, this is strongly outweighed, numerically speaking, by cases where work is relocated with Europe.

An examination of the reasons for choice of a remote back office location or an outsourced supplier of eServices also overturns some popular stereotyped views. Several factors were notable by their absence, including: the availability of government grants or other state incentives to choose a location; a deregulated labour market; the time zone in which the region is located; and low staff turnover.

In general, by far the most important selling point of any region is the availability of technical expertise. This is followed by low cost, which is followed by a good reputation and then by reliability or high quality.

Conclusions

The results of the survey confirm that eWork is indeed taking place on a significant scale in Europe, a scale of sufficient importance to have a direct impact on employment practices and to affect indirectly the levels of employment in a number of regions.

There is a thriving European market for eServices, involving a significant amount of cross-border electronic traffic. This market is not self-contained. It includes substantial inputs from and outputs to the rest of the world. However, trade in services within Europe still outweighs trade with the rest of the world, suggesting a considerable degree of internal cohesion.

The information economy cannot be regarded as autonomous, however. Not only do many eService activities take place within organisations which are classified in other sectors, information processing sectors also both make inputs to and receive outputs from virtually all other sectors of the economy. The health of the information economy sector thus appears crucially dependent on other sectors and it seems unlikely that it can thrive in their absence. Conversely, these other sectors are unlikely to prosper without inputs from the information economy which makes a vital contribution not only to the innovation process within them, but also to a range of other (increasingly generic) business functions.

Further information

eWork in Europe complements the first EMERGENCE report, on the available global statistics on eWork: Where the Butterfly Alights: the global location of eWork, also published by IES. Details on these and all the other outputs from the EMERGENCE project, are available from the Institute for Employment Studies, or from this website and www.emergence.nu
 

A project funded under the Information Society Technologies Programme of the European Commission

eWork in Europe: Results from the EMERGENCE 18-Country Employer Survey, Huws U, O’Regan S. Report 380, Institute for Employment Studies, 2001.
ISBN: 978-1-85184-309-1. £35.00. [PDF price: £free]

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