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1、 Digital Nomads How many,why,and does it matter?Ben Savours 1 CONTENTS 3 Executive Summary 6 Introduction:Emigration,Remote Working and Digital Nomadism 9 Chapter One:Scale and Drivers of Digital Nomadism 12 Chapter Two:Working as a Digital Nomad 18 Chapter Three:The Future of Digital Nomadism 21 Co

2、nclusion and Further Research 22 Appendix 2 EXECUTIVE SUMMARY “Im living like a king and can save a good amount a month.The countries where the cost of living is lower are starting to pop up.In London no one is happy and in Europe its really hard to sustain a life.”-Male,25,Germany,startup founder-o

3、nline training “Bali is a great place to be if you want to be surrounded by a lot of digital nomads who are very ambitious.I like working in a co-working hostel;everyone is working on their own thing,doing it remotely.Its very,very inspiring,and motivating.”-Male,20s,Germany,freelancer-digital servi

4、ces“One of the massive appeals of Bali is the safety and family values.I want to bring up a family in a place like this,where its safe.A place where we can be part of the community.The US is not like that.”-Male,30s,USA,business owner-property and cyber security Is the digital nomad phenomenal real?

5、If so,how many Brits are living and working abroad in this way,what are their lives like,and does any of this truly matter?Digital nomadism is a distinct form of emigration where workers are not reliant on the economy of their host country for employment.Instead,they remain economically connected to

6、 their home country,using digital technology to work remotely while living abroad.To research the digital nomad trend Public First combined polling,modelling,and a new approach to opinion research-immersive research.This involved sending researchers to Bali to meet and interview digital nomads in th

7、eir natural environment.After all-how else could we find out what they think?Some key findings of this report are:We estimate that 165,000 British citizens live and work abroad as digital nomads,spend an average of seven months a year overseas,and collectively earn 5.2 billion whilst away.This means

8、 the economy loses 3.1 billion in consumer spending along with 320 million in lost VAT revenue.These digital nomads contributed 1.6 billion in income tax and national insurance last year-revenue that could be at risk if they choose to relocate permanently.3 There are approximately 85,000 employed an

9、d 80,000 self-employed digital nomads living and working abroad.Many digital nomads leave the UK due to the high cost of living and expensive rents,and the higher standard of living they can afford in places like Bali.Financial advantage is a key reason why many choose to work abroad,and why many wi

10、ll decide to stay.The digital nomads we spoke to were often very critical of their home countries,comparing the negative culture and high levels of crime unfavourably to the safety and strong sense of community they experienced in Bali.Self-employed digital nomads described Bali as an ideal place to

11、 build a business.The low cost of living allows them to experiment,while the convenient living and working conditions enable them to focus fully on their enterprises.The opportunity to network with likeminded and ambitious individuals was also seen as a real plus.The experience of employed digital n

12、omads was more mixed.Many reported feeling isolated from their colleagues and struggled to stay motivated while working full-time in this environment.Businesses are increasingly offering employees the opportunity to work temporarily abroad,with longer stays limited by legal restrictions and administ

13、rative complexities.But if digital nomadism isnt compatible with employed work,this could hinder take-up.Our polling suggests that as much as 7%of the adult population consider themselves very likely to work as a digital nomad over the next three years.Were 50%of them to follow through on this plan

14、this would mean 1.4 million digital nomads and a loss of 26 billion in consumer spending and 2.7 billion in VAT whilst they are away.5 billion of additional tax would also be put at risk were self-employed digital nomads to change their tax residency status or incorporate a business abroad.The rapid

15、 improvement in healthcare,schooling and infrastructure,combined with lower taxation,mean older digital nomads could settle down permanently.4 5 INTRODUCTION:EMIGRATION,REMOTE WORKING AND DIGITAL NOMADISM Digital technology is increasingly enabling people to live and work wherever they choose.Report

16、s suggest this is fueling a surge in the digital nomad phenomenon-an ever-growing group of workers opting to live abroad,far from their colleagues,offices,and customers1.Many of these digital nomads,we are told,enjoy warmer climates,idyllic ocean views,or vibrant cityscapes while continuing their us

17、ual jobs and earning the same as they would at home.But traditional expats have been relocating in large numbers for decades,so is this really any different?And what evidence is there that UK employees can-or even want-to embrace this lifestyle?Traditional emigration is a popular British tradition B

18、ritish citizens have been emigrating in large numbers since the early noughties.Throughout the 2010s,approximately 150,000 British nationals emigrated each year,though this number has dropped to 100,000 since COVID-19 and the end of the EU transition period2.In 2017,the European Union estimated that

19、 just under 900,000 British citizens were living in the EU3.More broadly,the total number of British-born people living abroad was estimated at around 5 million by the IPPR in 20064.These figures suggest that British citizens not only have the propensity to emigrate but also the opportunity to build

20、 new lives in other countries.Traditionally,expats would leave their jobs in the UK to seek new work in their destination country,either integrating into the local economy or leveraging trade opportunities between the two nations.In contrast,digital nomads have no need for a commercial link to their

21、 host countrys economy,often continuing to operate within their home countrys economy as if they had never left.This applies both to employees,for whom working abroad may be no different from remote work at home,and to the self-employed,whose clients may be unaware of their new location.Digital noma

22、dism offers a hassle-free way of doing what many Brits have done for decades,with the added advantage of minimal disruption to careers or income.4 Nearly 1 in 10 Britons live abroad|Reuters 3 What information is there on British migrants living in Europe?-Office for National Statistics 2 Long-term i

23、nternational migration,provisional-Office for National Statistics 1 https:/ 6 Remote working plays an increasingly important role in the British economy The rise of digital nomadism is part of a broader shift toward remote work,a trend that was rapidly accelerated by the COVID-19 lockdowns.At its pe

24、ak,38%of workers were exclusively working from home5.Currently,business surveys estimate that 30%of the workforce are hybrid workers,while 8%work entirely remotely6.This equates to nearly 3 million Brits working exclusively away from the office-a figure likely to grow as younger companies,whose empl

25、oyees are more inclined toward remote work,grow into the major businesses of the future.Remote work is disproportionately common in highly productive and fast-growing sectors.Nearly half of all work in the Information and Communication sector-which includes developers,IT consultants,data analysts,e-

26、commerce professionals,and digital media specialists-are performed remotely.These roles are particularly well-suited to remote work,offer higher-than-average salaries and likely to expand in number.Unsurprisingly,these industries also face intense competition for skilled workers.The need to attract

27、and retain top talent is a key reason why over 70%of companies worldwide now offer their employees options to work remotely7.As a result,highly skilled and productive employees are increasingly leveraging their bargaining power to secure the flexibility to work abroad,whether for extended periods or

28、 on a permanent basis.Sectors compatible with remote work also play a crucial role in the startup economy,generating a disproportionate share of new businesses that drive future economic growth-a topic explored further in Chapter Two.As the digital nomad trend continues to expand,it is likely that h

29、ighly productive,skilled employees and startup founders will be among those choosing to move abroad.If these individuals decide to settle permanently overseas,it could have long-term implications for the growth and competitiveness of the British economy.Digital nomads remain working within the Briti

30、sh economy A digital nomad uses digital technology to work remotely from abroad whilst maintaining a career hooked into the economy of their home country.This distinguishes them from traditional expats,whose work is typically tied to the economy of their destination country.This connection also allo

31、ws digital nomads to maintain salaries comparable to what they would earn at home.Digital nomads may be employed,working with colleagues based in their home country,or self-employed,serving clients from their country of origin.With the freedom to live anywhere,many digital nomads choose destinations

32、 with a lower cost of living,enabling them to enjoy a 7 Current trends in remote working 6 Managers say working from home is here to stay|CEPR 5 The impact of remote and hybrid working on workers and organisations-POST 7 higher standard of living than would otherwise be possible whilst they save and

33、 invest for the future.The appeal of working abroad has led many businesses to offer digital nomad options to employees,particularly in industries with strong competition for talent.By the end of 2023,business surveys showed that just over 50%of firms had implemented or were considering policies all

34、owing employees to work remotely from a foreign country for up to 90 days8.This helps companies attract and retain top talent while avoiding the compliance risks and administrative complexities of long-term international remote work.Only 10%of firms offered employees the option to work abroad for lo

35、nger,with 80%citing tax and legal compliance as the biggest challenge.The legal and regulatory barriers to digital nomadism present an opportunity for countries looking to attract skilled workers.Many have already taken action,with 58 countries offering digital nomad visas by May 2024.Their motivati

36、on is partly immediate economic stimulation-digital nomads contribute to local economies through sustained spending patterns that surpass those of short-term tourists.However,there is also a longer-term incentive;the potential for highly skilled workers to integrate into the local economy.They may d

37、o this by filling in-demand labour market gaps,or starting businesses that create jobs,attract investment,and rely on local supply chains.There are potentially negative implications for the British economy In the short term,digital nomad migration brings both economic benefits and costs to the UK.In

38、itially,digital nomads may retain their UK tax residency,continuing to contribute to the economy and pay taxes as usual while placing less strain on infrastructure and public services.However,a key drawback is the loss of consumer spending within the UK,which affects retailers and reduces VAT revenu

39、e for the government.In the longer term,the impact is more uncertain and potentially concerning.Entrepreneurs who might have started and grown their businesses in the UK could instead do so abroad.As their businesses expand,they may hire local employees,integrate with local supply chains,and,if the

40、tax incentives are strong enough,eventually register their companies overseas.This means businesses that would have contributed to the British economy instead become foreign companies selling into it.Given that these businesses are likely to employ highly skilled digital workers with above-average s

41、alaries,this shift could have a negative impact on UK productivity.8 Current trends in remote working 8 CHAPTER ONE:SCALE AND DRIVERS OF DIGITAL NOMADISM We estimate that 165,000 British citizens are working abroad as digital nomads,the same as the working-age population of Newcastle.On average they

42、 work abroad for 7.5 months a year and earn a combined income of over 5.2 billion during this time.Public First modelling suggests the digital Nomad trend last year cost the UK economy 3.1 billion in consumer spending and the exchequer 320 million in lost VAT.The most common reason digital nomads in

43、 Bali gave for moving away was the high cost of living and expensive rents in their home countries.This was reflected in polling;of respondents who thought it very likely they would become a digital nomad in the next three years,64%thought issues relating to personal finances were a major benefit.Ma

44、ny also wanted to get away from the negative culture in their home countries in search of adventure and fun.How many digital nomads are there and what is driving the trend?The pull factors are perhaps obvious-warmer weather,exploring cultures,and a chance for adventure-but what is pushing people awa

45、y from the UK?This section first estimates the number of British citizens living and working abroad in this way using polling and some nifty modelling techniques.We then draw on the Bali interviews to explore the motivations behind this phenomenon.The scale of digital nomadism is enough to have noti

46、ceable economic effects We estimate there are nearly 165,000 British digital nomads currently living and working abroad.This is roughly equivalent to the working-age population of Newcastle and the same as the total number of British citizens who have permanently emigrated over the past two years.Th

47、ese numbers are enough to have a small but noticeable impact on the British economy.The decision of a large number of workers to live abroad has direct economic and fiscal consequences,particularly through lost consumer spending in the retail and hospitality sectors.On average,digital nomads spend 7

48、.5 months of the year abroad,collectively earning an estimated 5.2 billion during this time.If they were living in the UK,we 9 estimate the economy would benefit from an additional 3.1 billion in consumer spending.This also impacts public finances,with an estimated 320 million in lost VAT revenue.Th

49、e British public is becoming increasingly aware of the digital nomad trend,often through personal connections.Ten percent of British adults say they know someone currently working as a digital nomad,rising to 23%among those aged 18 to 34.This suggests that digital nomadism is particularly popular am

50、ong younger generations and is likely to continue growing.The digital nomad trend is driven by frustration at home and the attraction of moving abroad To understand the driving forces behind the digital nomad trend,we drew on findings from our immersive research study in Bali.These interviews were c

51、onducted primarily with individuals from Western countries,many of which face similar economic challenges to the UK.The cost of living is driving people away from their home countries.The most common reason cited for becoming a digital nomad was financial.Many have left due to high rents,rising livi

52、ng costs,and heavy taxation in their home country.In Bali,they report living in larger,higher-quality homes for a fraction of the cost,can afford to eat out regularly,and still have money left over to save and invest.For many it is an absolute no-brainer.This was corroborated by the results of our p

53、olling-Of respondents who thought it very likely they would become a digital nomad in the next three years,64%thought issues relating to personal finances were a major benefit.“Im living like a king and can save a good amount a month.The countries where the cost of living is lower are starting to po

54、p up.In London no one is happy and in Europe its really hard to sustain a life.”-Male,25,Germany,startup founder-online training “So you massively reduced your costs 100%.I just came back from London a month ago where I spent so much for the apartment.I could have rented here for five years with the

55、 rental for six months in London.”-Female,30s,Spain,self-employed-online retail and fashion 10 The opportunity to travel while working is a major draw.For many,it offers a way to experience the gap year experience while still advancing their careers and earning an income.These nomads are truly mobil

56、e,moving every week or at least every month,seeking cultural experiences,meeting like-minded individuals,and embracing adventure.Some explained that taking a traditional gap year felt like a luxury,both financially and in terms of career progression.In this context,combining work with travel becomes

57、 practical and appealing.“My main motivation is to discover myself more.With my first travel experience I realized this world can be so different,and coming back home to Austria I realised there is so much more.Like,why should I stay here?Why shouldnt I explore everything,my perspectives,how I want

58、to truly live my own life?”-Male,20s,Austria,freelancer/small business owner-AI integration“People tend to be a little bit depressed in Germany during winter.I could make money from anywhere,and if I could be anywhere,would you be in Cologne right now?”-Male,20s,Germany,entrepreneur-runs online cour

59、ses business targeting the German-speaking market Finding a more positive culture is both a push and pull factor.Many digital nomads move abroad in search of a stronger sense of community while also wanting to escape negativity,social tensions,or crime in their home countries.For some-particularly t

60、hose from cities like Paris or London-the relative safety of Bali is an important reason for relocating.Others highlighted Balis positive cultural atmosphere,appreciating its traditional family and community values.“In Bali,you can just leave your computer there and go to the toilet,to the restroom.

61、Can you do that in London?Never,you take it with you to go to the toilet.”-Female,20s,France,employed-administrative assistant“The pros are just the environment,the atmosphere,the standard of living is a lot higher,the quality of life is a lot greater.Mentality of just the local people,spirituality

62、of just the community here.The Balinese and Indonesian people I absolutely adore and love.And theres a really great connection and community here that drives that sense of home.”-Female,30s,Canada,self-employed-teaches online and homeschools locally “We dont feel safe going back to the US.Drugs and

63、mental health are a real danger over there and as mental health declines it falls out onto the street.Here the family culture is strong and drugs are illegal.-Male,30s,USA,business owner-property and cyber security 11 CHAPTER TWO:WORKING AS A DIGITAL NOMAD We estimate that of the 165,000 digital nom

64、ads 85,000 are employed and 80,000 are self-employed.Self-employed digital nomads described Bali as the ideal place to build a business,with low costs enabling them to experiment and the convenient living and working conditions ideal for focussing.We estimate that self-employed digital nomads paid 5

65、90 million in taxes to the British Government last year,income that could be at risk should they change their tax-residency status or choose to register their business abroad.Employed digital nomads found the experience of being away from their team more difficult,with the less structured environmen

66、t a hindrance to work .The push and pull factors driving people to move abroad will partly determine the scale of the digital nomad trend,as explored in the previous chapter.But the long-term impact also depends on the stickability of digital nomadism-how many will choose to stay?This will ultimatel

67、y be shaped by the lived experiences of digital nomads working abroad.To explore this further,we draw on insights from our interviews.The experience of digital nomads is overwhelmingly positive Most of the digital nomads we spoke to in Bali were extremely positive about their experience working abro

68、ad.They praised the fantastic co-working spaces,the convenience of daily life,and the vibrant social scene available when they finished work.However,some also mentioned drawbacks,such as feelings of isolation,managing significant time differences with colleagues or clients back home,and struggling t

69、o stay motivated in such a different environment.One interesting finding was in the different experiences of employed and self-employed workers.Of the 165,000 digital nomads,we estimate that approximately 85,000 are employed and 80,000 are self-employed.Our interviews in Bali revealed a distinction

70、between the experiences of these two groups with the self-employed overwhelmingly positive.For those who were employed,however,the experience was more mixed.Some struggled with the pressures of corporate life,finding it incompatible with Balis more relaxed and free-spirited atmosphere.12 Is digital

71、nomadism a risk to British small business?One of the key themes from our research was the strong compatibility between digital nomadism and starting or growing a business-something we explore in more detail below.This trend should be a concern for Western economies like the UK.Todays small startups

72、are the big businesses of the future,driving economic growth,wealth,and prosperity.We estimate that over 20%of new business formations in the UK are in sectors well-suited to remote working and as such susceptible to the growing digital nomad trend9.More concerningly,these sectors are highly product

73、ive,with average wages of 50,000 compared to 37,000 across all industries10.If these businesses choose to grow elsewhere,the UK risks losing high-paying jobs and valuable tax revenue that would otherwise support the domestic economy.There are many positives and some negatives to working this way Dig

74、ital nomads in Bali were generally very positive about their experience and keen to highlight the benefits of working this way.While some drawbacks were mentioned,they were primarily reported by employed workers rather than the self-employed.Digital nomadism is an ideal environment for starting a bu

75、siness.One of the standout findings of our research was the significant benefits it offers to young entrepreneurs.Those looking to start their own business or work freelance described Bali as a fantastic place to launch their ventures.The most commonly cited advantage was the low cost of living and

76、reduced overheads.This financial flexibility allows entrepreneurs to take risks,knowing that a few slow months wont leave them struggling to pay rent.It also provides the freedom to experiment and invest in new ideas.Beyond cost savings,the strong entrepreneurial culture and vibrant network of like-

77、minded individuals both provides both inspiration and opportunity for collaboration and growth.“Bali is a great place to be if you want to be surrounded by a lot of digital nomads who are very ambitious.I like working in a co-working hostel;everyone is working on their own thing,doing it remotely.It

78、s very,very inspiring,and motivating.”-Male,20s,Germany,freelancer-digital services“I think its a good place to network.I actually met my co-founder in this place.If you want to network,you can sit on these two tables here,and you would meet like,five people in the span of two hours.”-Male,20s,Pakis

79、tan,startup founder with business registered in US-mental health platform 10 Public First analysis using the Annual Survey of Hours and Earnings and Business Register and Employment Survey providing gross annual pay for full time employees 9 Public First analysis on data from the Business Register a

80、nd Employment Survey and Business Demography data from the ONS 13 “Being an entrepreneur abroad reduces costs massively.That gives you breathing room.”-Male,30s,USA,business owner-property and cyber security “So with living here and having a lower cost of living,but also still being able to have cli

81、ents that are paying more of Western prices.That allows me to increase savings and increase my investment back into my business.”-Female,30s,Canada,self-employed-teaches online and homeschools locally For many,the setup and working environment is ideal for productive working.The advantages go beyond

82、 financial savings and networking-many find the practicalities of co-working in Bali ideal for focussing fully on a new venture.Co-working spaces are often better equipped and more comfortable than those in cities like London,and the lifestyle is highly convenient.Homes are just minutes from work,an

83、d theres little need to worry about cooking,grocery shopping,or even doing laundry.This creates an environment where entrepreneurs can dedicate themselves entirely to their projects.Beyond this,Bali offers a strong support network of young entrepreneurs and remote workers,fostering an exciting and c

84、omradely atmosphere.And when the workday is over,there are plenty of opportunities for socializing and having fun.“Its just like life is quite easy here,with respect to less distraction.I would wake up,I would come here,have a coffee,work until the end of the day,and I would go have dinner somewhere

85、.Im a very work oriented person and its really good for helping you to focus on work,because theres no distraction and everythings kind of on your doorstep.”-Male,20s,Pakistan,startup founder with business registered in US-mental health platform“I live a one minute walk away from here,so I just walk

86、 to this place in the morning and then I can just work for as long as I want.Its really,really easy.”-Female,20s,Denmark,freelancer-software and data migration “A lot of things are very easy,right?So here I can just eat three times a day in a restaurant,I dont have to cook,I dont have to do grocerie

87、s,I dont have to do laundry.A lot of those basic tasks or commuting,they dont take up any more time.So all of that free time just gives you more time.”-Male,20s,Germany,freelancer-digital training“Despite having a working day where I work like 10 hours,12 hours,or just five hours,I always have the f

88、eeling of,wow,after my work stops,I want to discover everything.I want to go to events,meet new people and stuff.But honestly,I work less hours.You can have the same productivity,but work fewer hours.”-Male,20s,Austria,freelancer/small business owner-AI integration Some digital nomads struggle with

89、motivation and feel disconnected from their work.Loneliness,isolation from colleagues,and the lack of a structured routine or 14 close support network made work more challenging for some.This was primarily an issue for employees rather than the self-employed,with some finding that the pressures of d

90、ay-to-day work clashed with their idyllic surroundings and desire to relax and enjoy their new lifestyle.“So most of the people initially struggle with productivity,depression and lack of grounding.They have to live out of their backpack.”-Female,30s,Russia,freelance-marketing business consultant 15

91、 Employees find it harder than the self-employed.Those working remotely while their colleagues remain in a different country-often in a vastly different time zone-struggle the most.Many digital nomads have been granted temporary permission to work abroad,but without direct access to their bosses and

92、 wider teams,their experience is often more difficult.This group generally found the transition tougher,with many feeling that the rigidity of work deadlines clashed with Balis more unstructured lifestyle.As a result,some reported feeling stressed,lonely,and even regretting their decision.Unlike sel

93、f-employed nomads,they found fewer benefits in flexible working arrangements or networking opportunities.However,for those who would be working remotely in their home country regardless,Bali still offered a preferable alternative-providing a more enjoyable environment than being confined to a small

94、apartment back home.“This business is a startup,so there are a lot of things that have not been put in place yet,and all sorts of situations come up.There are all sorts of meetings that arent scheduled that need to happen right away.Not being there in person is hard.”-Male,30s,Romania,employed-runs

95、a mental help digital hotline business Despite many digital nomads feeling more productive and motivated,most acknowledged that they likely worked fewer hours than they would at home.Without the pressure of high rent and living costs,there was less incentive to work long hours.Some freelancers repor

96、ted working just three or four days a week instead of a full schedule,as they simply didnt need to earn as much.For others,the reduced workload was less about financial necessity and more about making the most of their surroundings.With exciting activities on their doorstep,many prioritized enjoying

97、 their travel experience alongside work.“I work harder in Germany because of the weather outside.You dont have so much cool stuff to do outside.Here you can go to a restaurant,you can go to a bar,you can meet people,you can go to the beach.So you work less hard.”-Female,20s,Brazilian but resides in

98、Germany,freelancer-coder “You cannot compare productivity working remotely to in an office together.You can say whatever you want about remote working.Its super beneficial and cost efficient,for sure,for the business,but its not the same as when youre sitting around a table with people and what you

99、get done in one hour.”-Female,30s,Spain,self-employed-online retail and fashion“That type of grind that you find in London,in big cities,you cannot find it here.You tend to get very comfortable with the lifestyle here,and since its very affordable and 16 easygoing,you dont get stimulated in terms of

100、 business.You dont get inspired as much.Thats my perspective.Im just not as hungry as I was in London.”-Female,30s,Spain,self-employed-online retail and fashion For business owners and freelancers,being away from clients and potential customers was seen as a potential problem,especially for those lo

101、oking to grow their ventures.Many acknowledged that prolonged physical distance could limit their long-term success.Some saw returning home for a few months each year as a way to mitigate this issue,but last-minute requests for in-person meetings remained a barrier they couldnt easily overcome.Howev

102、er,this very much depended on the nature of the business.Broadly speaking,businesses with a strong digital focus where the expectation is on digital communication were considered less affected by geographical distance.“Working here has helped me to be more productive,but I lose some client contact,y

103、ou know what I mean?So I think moving here has helped develop the business but to build more relationships with our clients is more difficult because the distance between France and Bali is huge.”-Male,20s,France,self-employed-finance,sports coaching and data“The problem here is sometimes clients wa

104、nt to schedule a meeting in a cafe or whatever,and Im like,yes,but Im not there.I try to not say that Im in Bali because Im still afraid that this might impact my credibility.”-Male,20s,Austria,freelancer/small business owner-AI integration 17 CHAPTER THREE:THE FUTURE OF DIGITAL NOMADISM Our polling

105、 suggests that 7%of adults consider themselves very likely to work as a digital nomad over the next three years.Were just 50%of these people act on this intention and work as a digital nomad for at least 7 months,this would mean 1.4 million additional British digital nomads with combined earnings of

106、 44 billion whilst working from abroad.Were 2.1 million Brits to move abroad and work as digital nomads the British economy would lose out on approximately 26 billion of spending(1.9%of GDP)and 2.7 billion of VAT.We estimate that 1 million of these digital nomads would be self-employed and would pay

107、 5 billion in work related taxes.This income for the Treasury could be at risk in the long run should they change their tax residency status or register their business abroad.Digital nomads in Bali consider paying less tax an appealing reason to make working abroad a more permanent arrangement.The r

108、apid improvement in healthcare,schooling and infrastructure is leading digital nomads to consider staying for the longer term and to bring up a families abroad.The number of digital nomads currently living abroad is relatively small and unlikely to be keeping Treasury officials or Bank of England ec

109、onomists awake at night.But could this change?Digital nomadism has only recently entered the public consciousness,and as awareness grows,more people may begin to see it as a viable option.This chapter explores the potential growth of the digital nomad trend,drawing on polling data and insights from

110、our immersive research.The scale of digital nomadism is likely to expand significantly Seven percent of British adults say they are very likely or certain to work abroad as a digital nomad for an extended period within the next three years.Among those aged 18 to 34,this figure rises to 18%,with men

111、showing slightly more interest than women.Were 50%of those who express this intention follow through,an astonishing 1.6 million British citizens could move abroad to work for an extended period over the next three years.Such a shift would have significant implications for the UK economy.18 Were 1.6

112、million digital nomads to live and work abroad for seven months each,we estimate they would generate 44 billion in income during that time.This would result in a loss of approximately 26 billion in consumer spending for the UK economy and 2.7 billion in VAT revenue for the Treasury.Additionally,if s

113、elf-employed digital nomads changed their tax residency status or incorporated their business abroad,it could put 5 billion in tax contributions at risk.These are figures the Treasury would certainly notice.These calculations are based on responses from a single poll and should be interpreted with c

114、aution.Many respondents may have given aspirational answers rather than a realistic assessment of what is truly feasible for them.After all,we are all prone to making optimistic plans that dont always materialize.Further still,it presupposes that there is demand for 1.4 million jobs that digital nom

115、ads can carry out.Nevertheless,we believe the digital nomad trend is set to grow-and grow significantly.But does the UK risk losing digital nomads permanently?The rest of this chapter explores this question.With healthcare,education and infrastructure improving,digital nomads may be in it for the lo

116、ng run Once abroad,many digital nomads-particularly the self-employed-find the positive working environment a strong reason to stay,at least for a while.But what about the long term?Could digital nomads begin to settle down and even start families while maintaining this lifestyle?To explore this,we

117、once again draw on insights from our immersive research and interviews with digital nomads in Bali.The rapid improvement of healthcare,schools,and infrastructure is making Bali an increasingly viable long-term option for older digital nomads.For some,the dream is to establish a successful business w

118、hilst in Bali,settle down,and raise a family there.The main drivers behind this shift are an enhanced standard of living and a more traditional,community-focused culture-values they wish to bring their children up within.As the first generation of digital nomads ages,more are choosing to put down ro

119、ots,making this a growing trend.“I have seen a huge shift in families as well as solo entrepreneurs that have decided to set up and then start building a business.It is shifting that way,because so many people are searching for either remote work or theyre looking for something thats going to create

120、 a better,cheaper living environment for them,so that they can actually feel that they are successful monetarily.”-Female,30s,Canada,self-employed-teaches online and homeschools locally“One of the massive appeals of Bali is the safety and family values.I want to bring up a family in a place like thi

121、s,where its safe.A place where we can be part of the community.The US is not like that.”-Male,30s,USA,business owner-property and cyber security 19 “I mean definitely,I want to stay for a long time.The health care situation is getting better.In Bali there will be western people going there to retire

122、 so they are improving it.They are investing because there is money there to be made.”-Male,30s,Italian,small business owner-digital marketing agency“I dont think that my company in the future will be something physical,it will be fully remote.I guess you can employ people from all over the world an

123、d be anywhere.”-Male,20s,Brazilian but resides in Germany,freelancer-coder“Starting a business is easier because there are a lot less restrictions here,especially on the digital nomad side,but also on the business side.With everything,theres so much flexibility.Sure,theres so many different hoops th

124、at you technically can jump through once you find them,but you dont really need to.”-Female,30s,Canada,self-employed-teaches online and homeschools locally Tax and paying less of it is a long term consideration for some.Many people are angry at the high taxes theyre expected to pay in their home cou

125、ntries and have no problem searching for ways to pay less.There is a sense they are paying high taxes for services that other people enjoy.“I mean,I think its definitely a part of it.I met a guy from the Netherlands who was like,its 45%to my country,but now its 0%because you can spend one week in Du

126、bai per year and then get tax residency in Dubai and then dont pay tax.So,some people do that.I dont really care.I just want it to look correct on paper,it should just be the right thing.”-Female,20s,Denmark,freelancer-software and data migration “We are the world champions of taxes in France.So if

127、you want us to move back reduce taxes for the business owner.”-Male,20s,France,self-employed-finance,sports coaching and data For many,family,friends,and the desire for a settled community will ultimately lead them back home.While digital nomadism offers the chance to travel,work,and enjoy new exper

128、iences,many see it as a temporary chapter rather than a permanent lifestyle.In the long run,the pull of family and friends back home will be the deciding factors that bring them back.“So my friends and family are so close to me that this is an adventure.Its not a long term thing for me,its more expl

129、oring the world.”-Female,30s,Germany,self-employed-software developer 20 Chapter 5 Conclusion and Further Research The digital nomad trend is no longer a niche phenomenon but a growing movement with a measurable impact on the British economy.Our research estimates that nearly 200,000 British citizen

130、s are currently working abroad as digital nomads,collectively earning 6.2 billion while overseas.Although they remain economically connected to the UK-continuing to pay taxes and working with home-country clients or suppliers-their absence leads to a loss in consumer spending and VAT revenue.If the

131、trend accelerates,as our research suggests it might,and more digital nomads gradually detach from the UK economy,the long-term economic implications could be far more significant.The motivations behind this shift are clear.Many digital nomads point to high living costs and expensive rents in their h

132、ome countries as key push factors,while the higher quality of life,entrepreneurial opportunities,and strong sense of community in destinations like Bali act as powerful incentives.Our immersive research reveals a notable divide between the experiences of self-employed and employed digital nomads-wit

133、h the former generally thriving in these flexible environments,while the latter often face challenges related to isolation and a lack of structured support.We believe the findings of this study represent just the tip of the iceberg in understanding a trend that is still in its early stages.As digita

134、l nomadism continues to grow and evolve,there is significant potential for further research to explore its broader implications on individuals,businesses,and economies.21 Appendix A METHODOLOGY A1.Immersive research at Public First At Public First,we are increasingly turning to immersive research as

135、 a key approach for qualitative studies.Unlike traditional focus groups,which typically last an evening,immersive research involves sending researchers into specific locations for extended periods-often several days-to gain deeper,more authentic insights.They also allow us to access people that woul

136、d otherwise be very difficult to reach.For this study,Public First conducted nearly 40 in-depth interviews with digital nomads living in Bali.Over two days,we spoke with individuals in Canggu-widely considered the digital nomad capital of the world-and Ubud,a smaller but thriving nomad hub in the he

137、art of the island.Our goal was to gain first-hand insight into their motivations,attitudes,and experiences.Interviewees ranged in age from 23 to 40,and each was screened at the start of the conversation to ensure they met our definition of a digital nomad.If they did not,their responses were not inc

138、luded in our research.None of the conversations were pre-arranged,as we find that engaging with people in their natural environments leads to more authentic discussions and allows us to reach individuals who might never participate in focus groups or online surveys.To maintain consistency and compar

139、ability,all interviews followed a shared discussion guide.However,the open and informal nature of these conversations provided deeper,more spontaneous insights than structured research methods typically allow.A2.Polling We conducted a nationally representative poll of 2,000 adults living in Britain

140、to gain a deeper understanding of public awareness,attitudes,and intentions regarding digital nomadism.Our survey explored familiarity with the concept,including how well people understood digital nomadism and whether they personally knew anyone living that lifestyle.We also examined how many respon

141、dents were considering or actively planning to become digital nomads in the near future,as well as broader perceptions of the trend,including its potential benefits and challenges for individuals,businesses,and society.Beyond gathering direct responses,we used the polling results to develop data-dri

142、ven estimates on the number of British digital nomads.The methodology behind this modeling is explained in detail below.22 A3.Modelling the number of digital nomads now and in the future Estimating the number of digital nomads presents significant challenges due to the lack of official data.To addre

143、ss this,we developed a multi-step approach combining polling questions with statistical modeling to generate a reliable estimate.First,we asked respondents to report the total number of British people in their extended family before specifying how many of them were currently working abroad as digita

144、l nomads.To ensure clarity and consistency,we provided a clear definition of a digital nomad and instructed respondents to only include individuals who had been abroad for at least two months while continuing to work remotely.This allowed us to calculate the average proportion of digital nomads with

145、in respondents extended families.By assuming this proportion was representative of the wider UK population,we used it to generate an initial estimate of the total number of British digital nomads.To validate and refine this estimate,we repeated the process using close friends instead of extended fam

146、ily.By averaging the two results,we obtained a more robust measure.However,recognizing that polling-based estimates can be prone to overestimation,we applied an adjustment factor using a control group.We repeated the analysis,this time asking respondents how many of their close friends and extended

147、family members were teachers rather than digital nomads.We then compared our polling-based estimate of the number of teachers to official government statistics on the UK teaching workforce.Since our methodology overestimated the actual number of teachers,we calculated the scale factor between the tw

148、o figures and applied this correction to our digital nomad estimate.By adjusting for the overestimation inherent in self-reported polling data,we arrived at a more accurate and reliable estimate of the number of British digital nomads currently living and working abroad.A.4 Economic Modelling Gross

149、wages earned by digital nomads whilst abroad To estimate the average gross annual earnings of digital nomads,we used data from the Annual Survey of Hours and Earnings(ASHE).We identified occupations that are compatible with remote work and digital nomadism based on the Standard Occupational Classifi

150、cation(SOC)at the Minor Group(three-digit code)level.Using employment figures for each profession,we calculated a weighted average salary,ensuring that our estimate reflected the actual distribution of workers across relevant occupations.Next,we applied this average earnings figure to our estimated

151、number of digital 23 nomads,producing an estimate of the total gross annual income generated by British digital nomads.For simplicity,we assumed that self-employed digital nomads earn the same as employed digital nomads,acknowledging that earnings may vary but lacking sufficient data to model this d

152、ifference accurately.Finally,using polling data,we incorporated estimates of the average number of months per year that digital nomads spend abroad.By applying this proportion to the total gross annual income,we calculated the total earnings generated by digital nomads while living outside the UK.Co

153、nsumer spending lost to the British economy We first calculate income tax and National Insurance contributions(NICs)that would typically be paid by employed and self-employed digital nomads,based on their average gross annual earnings.For the self-employed,we assumed that most were sole traders,a fi

154、nding supported by our polling data,who would be subject to income tax and national insurance.To take a conservative approach,we included only income tax contributions given national insurance is often paid at lower rates for free lancers.From this,we estimate the disposable income earned by digital

155、 nomads while they were abroad.We next adjust for savings and housing costs.Based on recent UK savings patterns,we applied a savings rate of 10.5%to reflect the portion of earnings not spent11.Additionally,we deducted 17%for housing,fuel,and power costs using ONS estimates12.The remaining amount pro

156、vides an estimate of the average annual consumption spending of a digital nomad.Finally,we applied our polling-based estimate of the average number of months per year that digital nomads spend abroad allowing us to quantify the total consumer spending lost to the UK economy,VAT lost to the Exchequer

157、 We calculate the percentage of consumption spending that is paid in VAT using total VAT receipts for 2023/2024 and household Final Consumption data13,14.This is multiplied by total consumption spending lost to the UK economy to estimate the total VAT lost.Self-employed taxes at risk We take our est

158、imate of the total income tax paid by the self-employed(method described in consumer spending lost to the British economy above).This is a conservative estimate for the tax at risk as we ignore national insurance due to the challenge of calculating this with limited data.14 Household final consumption expenditure:National concept CVM SA-m-Office for National Statistics 13 Annual UK VAT statistics 2023 to 2024 commentary-GOV.UK 12 Family spending in the UK-Office for National Statistics 11 United Kingdom Household Saving Ratio 24 WE first 25