Evaluation of the long-term impact of remote work on productivity and preparation of proposals for increasing productivity in remote work conditions

The purpose of this study was to evaluate productivity-enhancing and limiting factors in remote work conditions and the impact of remote work on Latvia's productivity in the long term, as well as to develop proposals for increasing productivity in remote work conditions.

The study was prepared by the Scientific Institute of Productivity of the University of Latvia think tank “LV PEAK" in cooperation with the European Policy Research Institute of the Latvian Academy of Sciences.

The study consists of four parts. The first part describes the nature of remote work. The second part analyses the development trends of remote work in the world and in Latvia, including the potential of remote work - how extensive and in which industries/professions there are opportunities to work remotely. The evaluation is based on the available statistical information and survey results. The third part of the study is devoted to the impact of remote work on productivity. The fourth part of the study describes in more detail the challenges of remote work and policy directions for improving the situation. At the end of the study, the main conclusions and proposals for increasing the productivity of remote work are given.

In accordance with the task of the Ministry of Economics, the development of this study was financed from the project of the State Research Program "Economic, political, and legal framework for preserving the potential of the Latvian economy and promoting the growth of competitiveness after the crisis caused by the pandemic (reCOVery-LV).

Productivity report of Latvia 2022

The Productivity Report of Latvia 2022 (LPR-2022) was prepared by the Scientific Institute of Productivity of the University of Latvia think tank  “LV PEAK”, which, in accordance with the decision of the Cabinet of Ministers of the Republic of Latvia of October 29, 2019, represents the Republic of Latvia in the network of productivity councils of the European Union (EU) Member States.

Latvia's competitiveness in the world

The Global Competitiveness Index (GCI) ranking published annually by the World Economic Forum (WEF) is a globally recognized tool for assessing a country's competitiveness. Despite various methodological shortcomings, the GCI rating provides valuable information for policy makers and allows to determine the areas in which Latvia is significantly behind other countries. On the other hand, Latvia's position in GCI and other international rankings is one of the factors that can influence the decisions of potential investors regarding investments in the Latvian economy. Therefore, the improvement of Latvia's position in international rankings increases confidence in Latvia's economy on a global scale and promotes its attractiveness for attracting international resources.

In the Global Competitiveness Ranking published by the World Economic Forum (WEF) in 2018, Latvia ranked 42nd among 140 countries of the world. Analysing Latvia's progress in competitiveness according to the assessment, it should be concluded that, compared to 2017, Latvia's performance has improved or remained unchanged in 11 pillars out of all 12 pillars and has slightly deteriorated in only one (financial system).

Challenges of Latvia's competitiveness

Competitiveness is the ability to create and increase the wealth of the country and the well-being of the population.

Competitiveness is the ability of entrepreneurs to mobilize and effectively use the productive resources needed to successfully offer their goods and services in the global economic environment; create valuable jobs; manage and adapt to change based on innovation.

Competitiveness is not absolute - it is and will always be relative, i.e. depends not only on whether we have implemented structural reforms to improve various areas, but also on whether we have done it stronger than others. Therefore, it is useful to use the results of international rankings to assess competitiveness.