1 Introduction

The COVID-19 pandemic accelerated Estonian remote work practices and changed the workways of many employees. The capital, Tallinn, is known to be “one of the world’s best places for working remotely” [3], more than 2700 e-services are currently at the customers’ disposal [1]. A high degree of digitalization in everyday life and extensive Internet coverage created favourable preconditions for smooth transmission from offices to online and remote work [10]. The draft of the Estonian welfare development plan 2023–2030 also states that the flexibility of working time and workplace increases. Due to the rise in digital opportunities and the spread of COVID-19, more and more work is being done outside the usual place of work and working with flexible working hours.

The case of Estonia, a small country with a high level of digitalization, provides additional information on the development of new ways of working pushed by the turbulence (e.g., COVID-19) in the labour market. Estonia has a high share of people living and working in metropolitan areas Harju (46% of the population) and Tartu county (12%). According to the Estonian population and housing census, 41.2% of the working-age population have higher education, and a fifth of 25–64-year-olds have a master’s degree. Such preconditions create a suitable ground for the development of remote work.

The information and data about coworking spaces in Estonia are from Micek et al. [5] and Sinitsyna et al. [10], data collection and interviews and web pages of coworking providers. Data on remote work is extracted from Statistics Estonia and Salary Information Agency.

This chapter offers an overview of the development of remote work during the recent decade, emphasizing remote work practices and coworking in the development of remote work in Estonia during COVID-19.

2 Developments in Remote Work Practices and Coworking Spaces in Estonia

The pre-pandemic share of enterprises practising remote work was high and relatively stable over time. It was approximately 20% in 2009 and 18% in 2015 (Statistics Estonia). However, by 2021, the number of enterprises with remote workers doubled relative to 2009. Every second out of 5 enterprises practice the remote mode by the beginning of the COVID-19 pandemic. However, there were considerable size differences in remote work practices across enterprises of different sizes.

Figure 1 shows how the share of enterprises with remote workers changes by the size of the company. The most considerable increase in remote work practices can be seen in Estonia’s largest companies, which were already implementing remote work practices in 2015. The share of remote workers was highest in the fields of information and communication (78.3%), financial and insurance activities (76.4%), and professional, scientific and technical activities (58.8%). However, the smallest is in the areas of accommodation and catering (7.1%), health and social welfare (8.8%), and the processing industry (14.4%) [13].

Fig. 1
A bar graph of share enterprises. The highest data mark with 250 and more employees and the lowest data mark in 2009 with 10 to 49 employees.

Source Statistics Estonia

Share of enterprises with remote workers by the size of the company.

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There are also differences in areas of Estonia. The share of employed people working remotely was the highest in two main metropolitan areas—Harju County (35%) and a third of employed persons living in Tartu County also worked remotely. Teleworking was the least common among people also from other parts of Estonia, e.g., in Nord-East (Ida-Viru) and South-East Estonia (Võru) counties, where only 11–13% of employed people used this option [13]. However, Fig. 2 shows how the geographical heterogeneity of remote work in Estonia has reduced at the beginning of the pandemic. This could trigger a more uniform distribution of remote work in the long run if this temporary growth in the peripheral areas becomes permanent.

Fig. 2
A grouped bar graph of the share of employed people. Harju has the highest percentage in 2020 and Ida-Viru has the lowest. Harju has the highest percentage in 2019 and Ida-Viru has the lowest.

Source Statistics Estonia

Share of employed people aged 17–74 working remotely in the Estonian counties, 2019–2020.

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According to the information provided by the Salary Information Agency of Estonia, in autumn 2019, only 6% of employees reflected that they worked from home (see Fig. 3). However, the first wave of the pandemic pushed 41% of employees to work from home. In spring 2022, when society became more used to living with the disease and there were no restrictions, the share of people working from home dropped to 23%. Additionally, the same study indicates that half of the knowledge workers prefer to work in a hybrid form, and less than a third prefer the office as the primary work location. This implies that the current level of employees working at home and their individual preferences have stabilized at a higher level compared to the pre-pandemic period.

Fig. 3
A grouped bar graph. The office has the highest data in 2019, 2021 and 2022. In-home has the highest data in 2020 and in-public spaces had the lowest in all the year.

Source Salary Information Agency, 2022

Location of work among employees.

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The share of people who work mainly in public spaces like cafes and coworking spaces is small—only 2%, but relatively stable (see Fig. 3). This is interesting because the COVID-19 pandemic accelerated the growth of organizations and companies that offer remote working opportunities. Unfortunately, there are no client statistics for coworking spaces available. Still, the qualitative study carried out in the spring of 2020 among locally-owned coworking spaces in Estonia specialized in tech companies showed that managers of coworking spaces saw their future optimistically and even planned to put additional emphasis on marketing to raise awareness of coworking [10]. Coworking spaces may offer more flexibility in rental contracts and cost savings and could be a good choice during uncertainty for many companies.

During the pandemic, coworking spaces in Estonia were less affected in their operations due to the fewer restrictions that Estonia experienced compared to other European countries [5]. However, given the investments in ICT technologies in Estonia before the pandemic, coworking spaces in Tallinn experienced the most significant increase in the share of virtual events over the total number of events during the COVID-19 pandemic compared to other critical European cities (Ibid).

Flexible forms of work encourage the participation of different social groups in the labour market. However, working time and workplace flexibility are often accompanied by an increase in workload, blurring of the boundaries of work and personal time, problems with the working environment, social isolation, increasing inequality and difficulty in controlling working conditions, which in turn have an impact on the employee’s mental and physical health. Low wages may also accompany new forms of work (Ministry of Social Affairs).

The Parliament of Estonia is currently processing the amending of the Act on Occupational Health and Safety, which also includes changes related to remote work. The draft stipulates the obligations of the employer and the employee to ensure a safe working environment in remote work.

3 Widespread Remote Work and Geographical Heterogeneity

The increase in remote work practices due to the COVID-19 pandemic accelerated several already underway activities and offered new possibilities for different service providers. In addition to companies providing coworking spaces for freelancers and employees, public and private organizations have focused more and more on remote work possibilities.

3.1 Remote Workstations for Employees of the Public Sector

In Estonia, the real estate development and management company Riigi Kinnisvara AS is established for the efficient management of state real estate. The company is 100% owned by the Republic of Estonia, and its shares are controlled by the Ministry of Finance. Before the pandemic, in 2018, the government initiated the pilot project to create state office buildings, including remote workplace environments for public sector employees in counties, to improve the availability of state services and save on real estate costs (Riigi Kinnisvara).

As Riigi Kinnisvara AS states, the COVID-19 crisis highlighted that work environments must be created as flexible as possible and easily adaptable to changes. This means that a public sector employee, whose job allows them to choose between the office and remote work and that across Estonia, has good opportunities for this. Today’s real estate decisions must also ensure a high-quality working environment 10 and 20 years from now. The flexible work environment also supports the national recruitment policy, i.e., the recruitment of a specialist is possible based on their preferred location. From Riigi Kinnisvara’s point of view, this means in-depth knowledge of the client’s work process and the resulting high quality of the initial project task, based on which designers can create well-thought-out architectural solutions.

The state’s administrative policy program is to keep the share of central government employees in the capital city Tallinn below 44.7% [2]. This is because there would also be motivated employees with the necessary qualifications in rural areas. They started hiring new people from where they currently lived. On the one hand, it was a regional political step, but on the other hand, it was an opportunity to hire good people who did not want to come to live in Tallinn.

With remote workplaces, employees of state institutions are offered the opportunity to comfortably work temporarily in another location and assess the suitability of the location and premises of remote workplaces, ease of use and what additional opportunities remote workplaces could offer in the future. Currently, remote workstations are located in seven Estonian cities. This is a pilot project, and if the use of workplaces is widespread, locations and workplaces will be added to the existing remote workplaces across Estonia, including in future government buildings. All remote workstations have an additional monitor, keyboard and high-speed Internet connection. The use of remote workplaces is free for public sector employees.

3.2 Development of Remote Work Tourism in Estonia

The region of Southeast Estonia consists of three counties: Võrumaa, Põlvamaa and Valgamaa. Southeast Estonia, next to Ida-Virumaa, has been one of the regions that lost its inhabitants the fastest. Although the downward trend has been somewhat slower in recent years compared to Statistics Estonia’s forecast, the decline will continue in the foreseeable future, meaning an increase in the share of older adults due to longer life expectancy and emigration of younger residents, and the decrease of both the number and share of working-age people.

Thanks to its good reputation as a pleasant living environment, Southeast Estonia has the potential to benefit from the increasingly widespread trend of remote working. All three counties have joined their forces to promote Southeast Estonia as an attractive destination for remote work tourism. In July 2020, the brand of remote work destination Kupland was launched. Kupland brings providers of remote working services in South-Eastern Estonia (Võru, Põlva and Valga Counties) together under a single umbrella brand. In the Kupland network, one can find visitor centres, hotels, tourist farms, creative houses, and innovation centres. Visitors of Kuplands’ website can choose whether they would like to come to work remotely alone, with the family or with the team. They can also select the necessary amenities.

Due to the COVID-19 pandemic, the first target audience was domestic tourists, but in the future, Kupland plans to broaden the focus to neighbouring countries. In addition to Estonian, they already have their website in English, Latvian, Finnish, Russian, and German language. Cooperation projects have started with some regions in Germany and Poland. When it began, Kupland had 16 private and public organizations across Estonia that hosted remote workers. By the end of 2020, the number of hosts was 21, and by the end of 2021, 28 [4]. The network statistics show that the increase in visitor numbers in 2021 compared to 2020 was 140%. Most visitors stayed for one day, and 25% of visitors stayed for two days. Most visitors are knowledge workers who work using ICT, but also creative workers who need privacy and inspiration. An increase is also in the short-time rental of the room for online client meetings or consultations.

Following Kupland’s example, a network covering regional, remote workplaces on the islands of Saare county (Saaremaa, Muhu, Abruka, Ruhnu, Vormsi, Vilsandi) is currently under development. Saare county is among the last regions in Estonia regarding the share of people working remotely. The working group has mapped the service’s potential user, their needs, and how they could reach this service. They are also developing an umbrella brand for organizations and companies offering remote work opportunities.

3.3 The Emergence of New Types of Coworking Spaces

Libraries. Libraries as places for remote work have gained popularity. Newer libraries have special rooms or individual boxes for working. 2022 was the year of libraries in Estonia. Related to that event, the map of libraries offering remote work opportunities was launched [7]. It confirms how relevant the topic of remote work has become in recent years. According to the map, 170 libraries offer remote work possibilities for free. However, many of them still do not have private rooms for teleworking, but working is possible in reading rooms.

Community centres. In the last decade, the activity of local communities has picked up. Municipalities have supported the creation of community centres. These centres are often established in buildings with a significant history for local communities—in old village schools or centres, post offices, etc. The community centres usually include a bigger hall for events, seminars and cinema, small rooms for joint activities like knitting, book club, etc., and a communal kitchen and workspaces for remote work. Community centres are for local residents and usually do not advertise their workstations outside the municipality.

Unique places for remote work. Offering opportunities for remote work is recently seen as a possibility for diversifying the initial service. Coworking spaces have always thrived on offering their clients a vibrant and trendy ambience. Due to the COVID-19 pandemic, other companies and organizations have become interested in remote workers’ market niches. For example, renting an igloo office, a workstation in the art gallery or radio station, or the riverboat is possible. The common feature is that the main activity field is complemented with additional services, and remote working offers an opportunity for that.

Promotion of remote work. In 2016 the Estonian Smartwork Association (NGO) started an initiative of the Remote Working Badge. The badge aims to recognize organizations already using remote working practices and encourage other Estonian organizations to apply flexible working practices in their everyday work arrangements. Also, since 2018 organizations can nominate leaders for the title “Best remote leader” [11]. Applying for the badge has become increasingly popular as employers perceive it as an additional benefit for recruiting the best talents. In total, 195 companies have received the Remote Working Badge as recognition for their remote work practices.

4 Conclusion

Across all EU countries, the COVID-19 pandemic drastically changed how people work. Employers had to adjust to the new working environment and introduce new ways and practices of working. The findings of our study provide an overview of the significant trends in remote work and coworking practices in Estonia—a country with a small economy and with a high level of digitalization. We seek to investigate what extended the COVID-19 pandemic and accelerated the pre-pandemic trends. Based on Statistics Estonia, we evidence the growing demand for flexible and safe working conditions. During the pandemic period, 41% of employees had to work from home. When the restrictions were relaxed, employees, especially in high-skilled occupations, remained in a hybrid work format. We assume that preference towards hybridity of work will be further supported by employers and adopted as the new daily base routine.

Another trend we observe is an increasing number of private and public companies that provide remote work. Even before the pandemic, companies in the ICT sector, banking and finance industries were familiar with the remote work practice. Thanks to the high level of digitalization and implementation of IT technologies and solutions in the pre-pandemic period, many companies had a smooth transfer into a safe mode of remote working. Public companies (for example, real estate company Riigi Kinnisvara AS) offered equipped workstations across non-metropolitan locations on a temporal or permanent basis and introduced new hiring practices recruiting employees across all regions of Estonia despite their place of residence. Employees’ preferences towards hybridity and remote practices and the readiness of employers to meet them, supported by the high pre-pandemic level of digitalization and developed ICT sector, push the revitalization of rural and deprived regions and reduce the socioeconomic disparities across Estonia.