Will nomad hubs become the next startup cities?

Join Lauren Razavi onstage at TNW 2021 as she moderates a panel on ‘Hustle Culture and the Burnout Generation.’

Silicon Valley has been the startup capital of the world for a generation – but that doesn’t guarantee it will retain that title in future. As the Silicon Valley playbook is uploaded to the cloud, other startup cities are taking advantage, but we have the opportunity to update our thinking as well. When we talk about “the next Silicon Valley”, what we really want to know is:

• Where will the next set of game-changing ideas come from?
• Where are the most talented and ambitious people flocking to?
• Where can I go to meet the folks who are building the future?

The answer to these questions is no longer a single place. It’s a constantly evolving collection of places, supported by the global layer of an internet country.

If our goal is to have a more diverse, more aware, more empathetic, more radical community of builders, our future startup culture needs to move beyond the norms of the last few decades. Digital nomads may be the group best-placed to lead the charge, given they’ve already spent years laying the groundwork.

Wherever nomads go, they bring their new, borderless values with them. Those values will be the foundation for new opportunities, strategies, practices, networks, policies, and everything else in the years ahead.

Nomad Hubs as Startup Cities

In the 2010s, early adopters of remote work began to experiment with borderless living. They built their careers and businesses as they traveled from place to place, creating a fringe movement that became known as digital nomadism.

As nomads moved between locations, a network of startup cities rose to meet their needs. These nomad hubs were often smaller and lesser-known destinations, but they had intimate business ecosystems, higher living standards, and affordability compared to major global cities. I’m one of these digital nomads, and I’ve spent time in more than 40 countries over the past decade.

If this concept is new to you, the best way to understand it at a glance is to visit Nomad List. The website ranks the world’s towns and cities according to their suitability for remote workers, pulling in public data from a wide variety of sources and making them easy to navigate. It was one of the first digital interfaces to represent nomads’ thinking about the world.

At any given moment, Nomad List offers an answer to the question, “Where is the best place in the world for remote workers to be right now?” The answer changes according to factors like the weather, air quality, and cost of short-term rentals at different times of the year.

While the site isn’t always 100% accurate, it gives an impression of the criteria people consider when deciding where to locate and how long to stay. The rise of remote work means more people have a choice about how they live: as a settler or a nomad. The human relationship with place has shifted.

Building Remote Work Ecosystems

Since the turn of the 21st century, Singapore, Dubai and the entire country of Estonia have become brand-name startup cities. Although there’s crossover, nomad hubs are different.

Brand-name startup cities tend to follow a tried-and-tested strategy to attract talent and win foreign investment: They prioritize big business on the expectation the rest will follow. Nomad hubs, though, see individuals as an equally appealing route to success. These are not just startup cities, but remote startup cities – their ecosystems are intentionally designed for the global remote economy.

In the mid-2010s, the Indonesian island of Bali became the de facto nomad capital of the world. Everybody experimenting with the lifestyle found themselves on the island sooner or later. If nomads are a reverse diaspora – “a subculture that starts internationally distributed, finds each other online, and ends up physically concentrated” – then Bali was their first offline gathering place.

Bali’s unique mix of features makes it an ideal destination for borderless, remote work: a tropical climate, high-speed internet, coworking spaces, international food options, affordability, English language competency, and years of experience with Australian tourists. Leveraging its value proposition to attract digital nomads put Bali on the 21st-century map.

Unsurprisingly, Bali often occupies the top spot on Nomad List. Its first lines of code were written there too.

The Portuguese capital of Lisbon has emerged as a nomad hub in recent years as well, often topping Nomad List during European summers. The Malaysian cities of Kuala Lumpur and George Town also offer a winning combination of superfast internet, high living standards, and strong local cultures.

In Barbados, policymakers, businesses, and residents have united around a forward vision of the island as a paradise destination for remote work and entrepreneurship. The Barbados Welcome Stamp – a visa program for remote workers – has attracted thousands of new residents so far. The weather, timezone, and affordability have recently convinced New Yorkers and San Franciscans to make the move.

As the global innovation landscape becomes more distributed, these nomad hubs will be an increasingly powerful force. There’ll be new winners and losers in the work-from-anywhere era.

Nomad Visitors and Host Communities

Nomads value the same features that help connect cities and their populations to global business: WiFi speed, workspace, meetups, and other startup and maker infrastructure. They also look at lifestyle and experience metrics. What does it look and feel like to be part of this community?

From there, the calculation is simple: If you earn a New York or London salary, your money goes much further in an emerging economy. With many young professionals priced out of property ownership in major cities, remote work creates the incentives for a very different sort of life. Timezone proximity is more important than geographic proximity, i.e. as long as you show up for Zoom meetings, it doesn’t matter where you’re located.

For the host communities, nomads’ presence brings risks and rewards. Nomad hubs benefit from local spending, connections to the global economy, and a stronger, more diverse startup culture with the potential to produce jobs and companies, both local and global.

But communities can become overly dependent on travelers, as the coronavirus crisis made clear. Tourism is responsible for an estimated 1 in 10 jobs worldwide. When borders closed and travel came to a standstill, businesses serving tourists were devastated. In countries with a weak social safety net, workers were left vulnerable and with few options.

There are questions, too, about how we guard against exploitation and power imbalances between local and nomad populations. As ever, people are moving faster than border policy. While a person’s rights are still determined by their birthplace, the old systems of wealth, power, and inequality will persist in the world, and we risk perpetuating the colonialism of past generations.

Why Startup Cities Should Specialize

As global travel rebounds, industry players are anticipating radical changes: People will move more and at a slower pace, and they’ll also visit new places. As Airbnb CEO Brian Chesky put it in a March 2021 interview with Monocle Radio:

“Before the pandemic, people disproportionately traveled to the same iconic tourist destinations: Rome, London, Paris, Las Vegas, New York. Travel meant visiting for two or three nights on business or a week or two on vacation. Now, the lines between traveling and living are blurring. Remote workers aren’t just traveling on Airbnb, they’re living on Airbnb for months at a time.”

So, how can a town or city take advantage of what’s ahead?

The best strategy may be to specialize. Whatever a place is great at is its edge in the remote economy.

Pieter Levels, the creator of Nomad List, argues that leisure, interest, and community-based destinations are the future of travel. He says:

“If a person’s interest is anime, they might enjoy living in Tokyo to be close to the anime scene, artists, and fans. If a person is passionate about country music, they might enjoy living in Nashville to be close to the music scene and live shows. If you’re into yoga and meditation, living in Ubud, Bali might work for you.”

Specialization helps create a scene and reputation, which keeps new people flowing in. For places to become hubs, this is vital. But it’s easier to accomplish than you might think. My hometown in the UK, for example, has embraced its 21st-century role as a city of stories, which positions it well for the remote economy.

In 2012, Norwich earned the UNESCO City of Literature title, bringing together a rich writing history and the success of the local university’s creative writing school. This recognition connects the city – home to just 200,000 people – to an international network of writers, artists, publishers, and cultural collaborators, often from faraway places. Everything from tourism marketing to themed graffiti focuses on Norwich as a city of writing and books. This edge has translated into a modest but strong global identity. Visitors come to plug into the writing scene.

Smaller towns and cities like this were not major tourist hubs in the past, but they will play an outsized role in the era of remote work travel. When people can work from anywhere, their location can be aligned with their lifestyle, interests or even beliefs instead of their workplace.

A person interested in writing may visit Norwich and then go onwards to other UNESCO Cities of Literature: Iowa City, Edinburgh, Montevideo, Bucheon, Baghdad, Prague. Startup cities focus on business and tech culture; nomad hubs go a step further, offering access to niche networks beyond the obvious startup scene.

Tomorrow’s travelers don’t want to go to places that offer everything but do nothing well. They want to go to places that do niche things exceptionally well. They want the opportunity to experience and learn from them. When you could be anywhere, what makes somewhere worth visiting? What will you be able to do there? Who will you meet? Traveling as a remote worker is not about flashy tourist sites, but a destination’s lifestyle and unique local culture.

Startup cities that focus on attracting founders working in a specific discipline could be transformative for startups, and niche nomad hubs are the first iteration.

Imagine Portland decides it wants to be the place for founders to go if they’re working on the future of plastics. The city gets to market itself as a green space, committed to sustainability, that outlawed plastic bags before anyone else. It could connect to a global network like B-Corp to offer resources and access partnerships. Agri-tech companies might flock to an obscure part of Eastern Europe, buoyed by land the government has made available for experimentation at a discounted rate.

Cities can lean into niches and create the optimal environment for different types of innovation – infrastructure and perks to attract a specific discipline, then access to likeminded people, ideas, conversations, and bespoke resources.

Serendipity Fuels the Nomad Economy

For policymakers, the key is to strike a balance between seizing the opportunities and minimizing the negative consequences. That means considering local needs and incentivizing desirable behaviors from nomads. With the right considerations, programs and partnerships can facilitate connection and interaction that benefits both groups.

As new remote work visas launch, there are early signs of what the beta version might look like: The requirement that nomad visitors base at a coworking space and share knowledge through talks, workshops, and mentoring. This may seem low-lift, but it’s also high-value. It creates the serendipity needed to fuel collaboration across cultures, economies, and borders.

When people travel more often, what will keep them coming back to destinations ultimately depends on just one piece of the puzzle: the people. Whether they’re permanent or temporary residents, a place will be judged on the strength of the human connections it can facilitate. The success of a nomad hub isn’t built on expensive real estate or the presence of investors – those were the ingredients of past startup cities. Nomad hubs thrive on social capital instead.

What counts is the experience of being there, meeting interesting people, and recommending the place to others. Nomads and locals have a shared interest in the continuance, experience, and prosperity of a place. This can lead to improvements that benefit everyone, whether it’s air quality, internet speeds, or transport infrastructure.

The brightest of tomorrow’s startup cities will be those built around the remote economy, but that don’t lose sight of the human aspects of technology and business. Nomad hubs show another future of innovation: one that’s mobile, distributed, and borderless. That future feels a whole lot more exciting.

This article was originally published on lraz.io. You can read it here.

Lauren Razavi is an award-winning writer, speaker and activist. She was an early adopter of remote work and has been a digital nomad since 2013. Lauren is currently a tech policy fellow at the Tony Blair Institute for Global Change, helping policymakers navigate how remote work and borderless living are influencing the future of citizenship. Her first book, Global Natives: The New Frontiers of Work, Travel, and Innovation, is available for pre-order now. Follow her on Twitter @LaurenRazavi.