Digital nomads: The new elite with no fixed abode

By Jonty Bloom
Business correspondent, BBC News

  • Published
Jemma at work
Image caption,
Jemma Porter is part of the digital nomad movement

Why work in an office when you can sit by the beach? Armed with a laptop and an internet connection, a new generation of 'digital nomads' is taking their work on their travels around the world. But they are not always welcome.

Jemma Porter and her boyfriend James Cave's journey began like many others when they became disillusioned with their desk-bound jobs.

"I really didn't like my job," Jemma told me.

"I used to work in online marketing in an office in Edinburgh and then I started doing some freelance copywriting on the side just to make a bit of extra money."

A second development - the discovery of house sitting - spurred a new lifestyle.

After a dodgy start in a French gite with terrible wi-fi connections, Jemma and James haven't looked back.

"We have lived in Germany, France, Spain, Portugal and South Africa - when I say 'lived', I'm talking say more than two or three months," James said.

"We've also travelled around South East Asia and other parts of Europe as digital nomads."

They regularly move between flats in different areas of the city, sometimes working at home and sometimes in bars and cafes. James prefers to work at home, Jemma in cafes or in rented office space - frankly anywhere with cheap coffee.

After five years on the move they are veterans and for now Lisbon is their home.

James's main income comes from the growing industry of search engine optimization.

"Basically, companies pay because they want to rank higher on Google for a certain search term and they'll have key words that are important for their business, maybe, car hire in Madeira, and they'll want to appear number one for that, so I'll work with them to see how - how that's possible."

Image source, James Cave
Image caption,
James Cave's internet-based work lends itself to travel

Jemma and James are paid well, earning about £40,000 a year each and are living a city with one of the lowest costs of living in Europe.

It's easy to see why they chose to become digital nomads, but it is not one long holiday.

They have found themselves working nine-to-five most of the time to fit in with their clients and sometimes they realise they have been working so hard they haven't left the flat in days.

They also feel guilty about the effect they and thousands of other digital nomads are having on the local economy.

Agustin Cocola-Gant from the University of Lisbon has been studying the changes among the local Portuguese population of having thousands of digital nomads turning up on their doorsteps.

"They see people coming from the north of Europe, that don't speak Portuguese, who are taking their places. The shops, the stores are changing, they're losing the places where they meet with their friends and neighbours."

Image source, Getty Images
Image caption,
Portugal's weather and good value attracts workers from northern Europe

All of a sudden trendy coffee shops are replacing local family run cafes. As Mr Cocola-Gant points out, all those people like Jemma and James are earning far more than the locals.

"People in the north of Europe earn quite a lot of money, and obviously it's more convenient for them to live here, because it is much cheaper. And also they can have a better quality of life because of the weather, the beach, etc," he says.

He argues that the digital nomads, earning North European wages and living in the cheap south, is forcing up house prices, turning family homes into holiday lets and driving out the locals who can no longer afford to live in the centre of Lisbon.

And their kind of lifestyle raises a different, but related challenge. How do you tax people if you don't know where they are, or what they are doing?

A digital nomad might be working from Bali on a tourist visa, creating a website for an American company, to be used in France, but based on a server in Switzerland.

Image source, Getty Images
Image caption,
It's not just the weather that makes Lisbon an attractive destination

Just how do you tax such people and where should they pay it?

"I honestly don't know the answer to that question," said Anne-Marie Malley of consultants Deloitte.

"It's one that we asked, and I have no idea. We asked the tax experts and basically what they said is that it's very much on an individual basis. If and when this grows, then that becomes much more of a challenge for pretty much every country," she said.

By their very nature, it is impossible to know how many digital nomads there are. They move too quickly to count, but there are certainly hundreds of thousands of them, and as more work becomes possible to do online, the number can only grow.

For the countries they travel to, they bring not just money but problems. They can easily outspend the locals and can distort the local economy.

But the bigger issue affects us all. For thousands of years, ever since the rise of agriculture and urban living, the nomad lifestyle has been in decline. As a result governments have become very used to registering and taxing people who live and work in one place for long periods of time.

All that is changing, and governments will have to learn to adapt to the new age of the digital nomads.

For more on this story, you can listen to Radio 4's In Business programme, broadcast on Thursday 3 May at 20:30 BST.