From the start of the teleworking movement during the 1990s — a trend initially pioneered predominantly by male management to extend the working day or as a means to achieve a better work-life balance — there have been contradictory predictions of either a huge growth or a total stalling of this market worldwide. The truth lies somewhere in between.

As the trend grows in both strength and breadth, so the motivations for teleworking have extended to include corporate benefits like reducing outlay on office space and gaining tax incentives. In common with other global trends, some parts of the world have been in a prime position to take advantage of this new way of working from the beginning, while others have waited, or are still waiting, for management styles and communications infrastructure to develop sufficiently to enable teleworking.

This document specifically addresses the corporate teleworker who spends at least one day a month working from home. The data does not incorporate mobile teleworkers such as "road warriors" or those working from client locations. The term "corporate teleworker" rather than "employed teleworker" is used to indicate that this data does not include self-employed teleworkers. The reasons for this delineation are twofold:

• It is difficult to gauge the number of self-employed businesses in each region and, therefore, worldwide, as the criteria laid down for required business registration vary between countries.
• There is a known but varying overlap between the corporate employee population and the self-employed population worldwide.

This worldwide forecast by region aims to provide guidance for carriers, service providers and equipment vendors involved in both infrastructure and equipment provision as to the current size of this market and the potential for future growth.

This report provides a top-level view for each of the regions of the world. Subsequent reports will provide greater detail at a regional level in terms of the current legislative incentives, the cultural environment, access technologies and infrastructure available to link teleworkers with their corporate base.

This forecast has been constructed from the regional level upwards using a combination of the following sources:

• Population data — from the United Nations (UN), The International Labor Organisation (ILO) and the Organisation for Economic Co-operation and Development (OECD). Employee numbers are derived from the UN population figures via a series of segmentations researched and reported by the ILO and the OECD. Using these segmentations, Gartner Dataquest is able to estimate the total employee population, the proportion of civilian employees and the proportion of civilian employees that can be attributed to those who are employees rather than self-employed.
• A variety of national or regional statistics on teleworking — including Gartner Dataquest's existing teleworking research, the American Interactive Consumer Survey, Statistics Canada (Canada's national statistics agency) and the Japanese Telework Association. The available data was built on using Gartner Dataquest's knowledge of this market to achieve parity between the regions, in terms of the defined market, and to look forward to 2008.
• Gartner Dataquest's worldwide PC statistics, especially the installed base by region, to ensure that the proportion of teleworkers in each region does not directly contradict the known relative proportions of the PC installed base. These statistics were essential when constructing the estimates for Asia/Pacific, where there is little or no consistent data available for countries within the region, or for the region as a whole.

The application of assumptions has been used to achieve parity of information at a regional level and so build up the worldwide picture. It has been necessary to put together the teleworking numbers for the United States, Canada, Western Europe and Japan to ensure a realistic and impartial forecast. The total addressable market — the employed population rather than the total labor force — was then calculated for each region. This provided a logical check and allowed the penetration of teleworking into the employee population to be calculated.

Once the figures for these regions were assembled, it was possible to estimate the worldwide teleworking population and split out Asia/Pacific. The major assumptions used in the construction of the forecasts are as follows:

• The proportion of the worldwide corporate teleworking population found in North America, Western Europe and Japan will be greater than the proportion of the worldwide installed base of business PCs for the same regions.
• The proportion of the world's corporate teleworking population attributable to North America, Western Europe and Japan will decline gradually as employees in the most technologically advanced areas of Central and Eastern Europe, Middle East and Africa, and Asia/Pacific are able to embrace the trend toward teleworking.
• While the United States has been at the forefront of the teleworking trend and will continue to hold the major share of teleworkers throughout the forecast period, this lead will diminish as other regions gain in terms of new teleworkers and the extension of existing teleworking programs.
• There is significant potential for the expansion of teleworking in both the United States and Western Europe. The uptake of teleworking is extremely patchy and penetration of the working population varies greatly between individual states in North America and across different countries in Europe.
• The events of September 11, the bombings in Oklahoma and continuing global unrest meant there was an increase in teleworking between 2002 and 2004. This has also led to a surge in the proportion of existing teleworkers working longer hours away from the corporate workplace.
• Japan has a relatively high proportion of teleworkers in the employee population, due to the support of its government for this type of working. The availability of suitable communications infrastructure also helps.
• The proportion of the worldwide teleworking population attributable to Asia/Pacific and the "rest of the world" will be lower than the proportion of business PCs attributable to these regions.

Following the publication of a new regional report on teleworking for Western Europe, this document has been updated to reflect the new data for Western Europe and thus the worldwide total. For more information, see "Forecast: Teleworking, Western Europe, 2000-2010" (G00128260).

The data in Table 1 is based on the sum of the major regions built from the country-level up and incorporating forecast assumptions.

The United States has been a major territory for teleworking since the early 1990s and, as Table 2 illustrates, the growth of teleworking looks set to continue in the region throughout the forecast period.

Increasingly, state legislation is emerging that supports employees in their desire to gain the opportunity to telework. In mid-2004, a bill was approved in Washington to penalize those federal agencies not giving all eligible employees the option to telework in 2005.

But the nature of government, coupled with the employee profile within each state, means that what is considered a priority in some states may not even be on the agenda in others. States with a high proportion of blue-collar and agricultural workers are much less likely to put teleworking high on the legislative agenda.

Gartner Dataquest expects the dominance of U.S. teleworking, in terms of its proportion of the worldwide market, to decline slightly during the forecast period. This is simply down to the fact that the United States is already further advanced into the teleworking cycle compared with other regions.

Compared with the major U.S. teleworking states, Canada has maintained a relatively cautious approach to this trend despite a similarity to the United States with regard to traffic congestion problems in major cities.

According to Canadian teleworking studies, a large gulf remains between the desire of employees to telework and their ability to do so. But as Table 3 shows, while starting from a relatively low base, the growth for teleworking in Canada to 2008 mirrors the worldwide trend — with a CAGR of 7.6 percent for those teleworking at least one day a month and a CAGR of 8 percent for those teleworking one day a week.

While the trend in Canada is not as widespread, those Canadians who do telework tend to do so for a greater proportion of their working week compared with those teleworking in the United States and parts of Western Europe.

Teleworking has been gaining ground in Western Europe since the 1990s, but, as with the United States, the take-up of teleworking within the employed population has been variable from country to country.

The highest rates are found in Finland, Sweden and the Netherlands, although the United Kingdom and Germany have the highest populations of teleworkers.

Gartner Dataquest expects the population of teleworkers in this region to show a CAGR in the region of 6 percent for those working at least one day per month, with a higher CAGR of about 9 percent for those working at least one day per week (see Table 4).

This projection assumes that while there will be growth in the overall trend to utilize telework, there will also be a significant strengthening of existing programs within the region. Recent legislation across the region will act to strengthen employee demands for more flexible working; for example, the arrival of the Congestion Charge in the United Kingdom and the European Union's Flexible Working legislation. For more detail on the trend for teleworking in this region please refer to our regional report: “Forecast: Teleworking, Western Europe, 2000-2010."

Gartner Dataquest anticipates that there will be a healthy growth in the teleworking population of Japan throughout the forecast period, with CAGRs for both groups showing in the region of 9 percent (see Table 5). Growth is above that projected for the worldwide market. The Japanese government views the teleworking trend positively and would like to see a rapid increase in teleworker penetration in the next six years. The Japanese government has an IT Strategy Committee, which is responsible for driving the use of IT in employment and labor as part of its e-Japan Strategy.

Although Asia/Pacific contains a huge proportion (more than half) of both the world's population and the worldwide employee population, there is little or no information relating to teleworking in the major countries of the region, namely China and India.

Forecasts have been developed by assessing the likely proportion of the worldwide teleworking market attributable to the region (see Table 6). Additional reference has been made to Gartner Dataquest's research regarding the installed base of business PCs in this region in relation to the worldwide installed base.

Despite the significant potential in terms of the size of the working population, developing countries within this region, like China and India, will have relatively high proportion of agricultural workers or blue-collar workers that will never telework.

While this must be taken into account when projecting teleworking for the region, even a small proportion of teleworkers here would have a relatively large impact on the worldwide teleworking population.

The following market accelerators will influence the growth of teleworking worldwide:

• The increasing availability of high-bandwidth access to homes in the more developed industrial nations will drive the spread of new teleworking programs and the extension of teleworking programs as a result of faster access options to a wider range of applications.
• Greater carrier and operator investment in suitable access infrastructure in the less technologically developed areas of the world.
• Increasing pressure, in terms of national and regional legislation, for businesses to offer the option of flexible working.
• Increasing pressure from employees for flexible working options to improve their effectiveness and work-life balance. Employees will put increasing pressure on companies to work at least one day a week from home.
• Increasing environmental pressure, both globally and nationally, to reduce congestion and pollution caused by mass commutes, coupled with the inability of transportation infrastructure to keep pace with the urban population.
• Reduction in the total cost of ownership (TCO) for equipment and services required for secure remote access to corporate networks.
• Increased availability of secure, reliable national and international managed access services from operators and service providers.
• Employee demand — most of the teleworking groups or associations around the world, with incisive knowledge of how teleworking is developing within their area, highlight a wide chasm between the enthusiasm of the workforce for teleworking and the degree to which management will allow them to telework.
• Continued or increasing political unrest, particularly where it includes a possible threat to the security of those in areas of greatest population and business density. This is rather a secondary effect. For example, following incidents like the Oklahoma bombings in the United States, remote working increased in the area as a means of keeping businesses going while buildings were restored. Once order was restored, a proportion of "emergency teleworkers" continued to operate in this way for part of their working week.

The following are potential market inhibitors to teleworking worldwide:

• The patchy availability of broadband access as a faster and more flexible alternative to traditional dial-up remote access. This is not a universal inhibitor, but it will be an issue for those teleworkers that expect to operate complex applications at network speeds while working from home. Gartner Dataquest research has shown that a high proportion of teleworkers are prepared to accept some reduction in performance in exchange for the flexibility that teleworking offers. This will be of greater significance in areas where basic rate ISDN is not available as a faster dial-up alternative to traditional analog modems.
• The sluggish expansion of managed remote access services from carriers and service providers to equip and support global teleworking projects. The managed access alternative removes the need for companies to find in-house resources to support and service a potentially global teleworking staff.
• The inability of national and international carriers to finance the upgrade of existing communications infrastructure to a level that will realistically support teleworking.
• The lack of available corporate budget for remote access equipment and support.
• The reluctance of management to move from a time-based to objective-based approach, where the individual has greater freedom but also greater responsibility for achieving set objectives. Although the objective-based system requires greater trust between the management and teleworking staff, it can also lead to improved productivity, as the weight of personal responsibility tends to focus the mind on work.
• A lack of commitment from national governments and wider regional organizations to improve the working conditions of employees and to tackle issues of pollution and congestion. As there is nothing so enticing to businesses as a government funded or subsidized scheme, the lack of such incentives encourages reluctant managers to shelve teleworking initiatives.

Gartner Dataquest predicts that the worldwide corporate teleworking population will show a CAGR of just below 8 percent between 2004 and 2008, growing to reach approximately 100 million teleworkers by 2008.

The greatest proportion of this teleworking population will be found in the United States throughout the forecast period, although this dominance will decrease as other regions show an increase. Together, North America, Western Europe and Japan accounted for approximately 78 percent of the worldwide teleworker population in 2003. This figure will decline to 75 percent by 2008 as the teleworker populations of other regions increase.

A comparison of teleworker rates of employee population penetration worldwide will reveal the untapped potential in this market. While Gartner Dataquest estimates that the United States will achieve a teleworking penetration of 21 percent of the employee population in 2004, Western Europe is expected to reach only 13 percent penetration in the same year, even though the employee populations of these regions are similar.

The move toward teleworking in Canada has been relatively slow in relation to the growth in the United States, Western Europe and Japan. But a relatively high proportion of Canadian teleworkers work this way for more than one day a week. A Canadian study on home working in 2001 found that only 34 percent of Canadians working from home did so for less than five hours per week and that 31 percent of them worked in this way for more than 20 hours per week.

In Japan, where the government is firmly behind the teleworking trend, the penetration of teleworking into the employee population is expected to approach 16 percent in 2004, while in Canada — where the trend has been slow to take off — the figure for 2004 is 10 percent.

Within the United States and Europe there is great variation between states or countries relating to the uptake of a teleworking option. For example, Gartner Dataquest research has shown that in the Netherlands, Finland and Sweden, teleworker penetration for 2004 will approach 20 percent, while in France the figure will be 10 percent or less. Within the United States, the highest proportions of teleworkers are found in the New England, and mountain and Pacific states.

Under the segmentations used in this report, almost 80 percent of teleworking undertaken by employees from home occurs in regions of the world which account for just a little more than 12 percent of the civilian employee population worldwide. Even taking into account the fact that a very low proportion of the employee population in many developing nations could realistically be classed as part of the addressable market, there is still huge potential for expansion. This represents a real opportunity for carriers and operators, service providers and equipment vendors.

Gartner Dataquest presents the following recommendations relating to teleworking:

• Governments that wish to tackle the issues of urban congestion, rising levels of pollution and a heedless consumption of non-renewable fuel need to provide solid financial and legislative backing to their statements of intent. The reasons for this are twofold:
  • It is clear that countries that achieve the greatest penetration levels of teleworking into the workforce have governments that offer incentives to businesses to set up flexible working programs.
  • The development of a sensible teleworking policy and encouragement of some basic ground rules and best practices help to alleviate the potential security issues related to giving remote workers access to corporate networks.
• Companies that aim to provide a teleworking option —as a means to encourage a healthy work-life balance and retain key workers, for example — need to:
  • Create strategies that ensure teleworking programs are set up in a controlled and secure way.
  • Develop a teleworking policy that lets all teleworkers know exactly where they stand and what best practices they are expected to adhere to.
• From a management point of view, it is important to be clear on how to assess the achievements of a worker who is not always physically present. This is important to maintain both the ability to manage and the presence of the teleworker as an active member of the team. For further information on this topic, see "Management Update: Managing the Mobile and Wireless Workforce" (G00120741).
• It is important that companies starting out on a teleworking program lay down good foundations before expanding the program. This should include provision of the necessary equipment and support, working practices, management practices and a means of assessing how the program is progressing before opening it up company-wide. For further information, see "Who Pays for Remote Broadband: Employer or Employee?" (QA-19-3951).
• Service providers should view the teleworking market as offering significant opportunity for both traditional communications and more customized managed access services. Partnership with equipment vendors that already have a presence in the less developed countries will enable the provision of a complete equipment and services package.
• Equipment vendors need to be aware of the huge potential market that teleworking provides. They should be willing to partner with operators and service providers in less developed countries, where budget may initially be very limited. The global teleworker population is dependent on equipment and services to provide either dial-up or broadband remote access, which is made secure by the use of firewall and/or the use of virtual private network (VPN) software or hardware. Vendors operating in the access equipment, firewall equipment and VPN equipment markets are all relevant for this market as are the related national and regional telecom operators and service providers. Teleworking offers a significant market potential for vendors of Web browser-based secure access products; for example, those using secure sockets layer (SSL) technology. SSL VPN can provide remote access to some applications via a standard Web-browser, thus avoiding the additional expense of a VPN client.
• Equipment vendors need to look at providing relatively low-cost secure and reliable solutions for remote workers who are largely unsupported during out of office hours — providing only the necessary functionality to restrict the potential for technical problems.

Key Issue

Will remote work change society?