The professor believes that Latvia’s growth rates depend on productivity, which lags far behind the European Union (EU) average.
At the same time, he emphasized that the challenge for Latvia’s future is to find the optimal proportion between remote and “traditional” work. According to him, in order to make effective use of the opportunities offered by telework to increase productivity and employee satisfaction after the end of the Covid-19 crisis, policy-makers need to improve the legal framework and social dialogue, as well as encourage investment in appropriate infrastructure and staff training.
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The data of the report “Latvian Productivity Report 2021” of the LU BVEF Productivity Research Institute “LU think tank LV PEAK” show that during the Covid-19 pandemic, in 2020 the share of teleworkers was 20.6%, which, compared to 2019, is the EU average increased 1.4 times. Malta, Romania, Bulgaria, Hungary, Italy and Greece saw the fastest and more than two-fold increase in teleworking during the Covid-19 pandemic.
In Latvia, on the other hand, in 2020, only 6% of the total number of employees worked remotely. Compared to 2019, the share of teleworkers in the total number of employees increased by 25%, but compared to 2010 – by more than 50%. Among the Baltic States, the largest share of teleworkers in 2020 was in Estonia, reaching 23.8%, which is four times more than in Latvia.
Evija Ansonska, Head of the Communication Center of the University of Latvia BVEF, noted that the application of the remote work regime in Estonia has increased rapidly in recent years, while in Latvia and Lithuania from 2010 to 2019 the changes in this indicator were quite moderate.
Inna Šteinbuka, director of the LU BVEF Productivity Research Institute “LU domnīca LV PEAK”, pointed out that the least remote work is in public administration and education. The results of researchers’ calculations show that approximately 38% of employees in the Latvian economy can potentially work remotely.
The application of teleworking is influenced by different sectoral structures, business management and work organization models, legislation, habits and culture, household living conditions and other factors. The size of companies, the share of the self-employed and the digital skills of employees also contribute to working remotely. For example, countries with a larger knowledge-intensive services sector and a larger share of IT industries have the greatest potential to work remotely, Ansonska explained.
At the same time, she pointed out that the impact of teleworking on the economy as a whole was currently under-researched, which prevented a full identification of benefits and risks and the development of theoretically sound proposals for policy-makers. On the other hand, a short-term assessment of the impact of the introduction and expansion of telework at the level of workers and companies cannot be a sufficient basis for predicting its impact on the economy as a whole. Ansonska believes that a lack of understanding of the long-term effects of teleworking may lead to an incomplete picture of how the economy will transform and what the consequences of the transformation will be for overall productivity.
“Latvian Productivity Report 2021” is the second report prepared by researchers. The first Latvian productivity report was developed in 2020. It has been developed in accordance with the instructions of the European Commission, and it analyzes the long-term scenarios of Latvia’s economic development and examines the impact of telework on productivity in depth.
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