What are "digital nomads," and how are they driving tourism and economic transformation in resort countries?

Digital nomads offer a viable alternative for seasonal work.‍‍‍‍

Image source:Unsplash/Krisztian Tabori

Pedro Lopes

Cape Verdean Government Secretary of State for the Digital Economy

Digital nomadism can attract long-term remote workers, offering small island developing nations a sustainable economic alternative to traditional seasonal tourism.
Cape Verde is making significant investments in digital infrastructure, such as international fiber-optic cables and tech parks, to support the growth of digital nomads and foster local innovation.
While digital nomads have spurred economic growth, it’s essential to strike a balance between economic expansion and equitable development by managing housing costs and enhancing digital skills.

After the COVID-19 pandemic, a new type of global traveler has emerged: the digital nomad. These individuals have freed themselves from the constraints of office-based work, blending exploration with remote employment and leveraging technology to stay connected with others across the globe.

As a result, nearly half of the world’s destinations now offer digital nomad visas, attracting these remote workers with their stunning landscapes, vibrant cultures, and reliable internet connectivity. While this trend initially appeared temporary, it has proven to have lasting appeal—especially for small island developing nations like Cape Verde.

A Shift in Tourism Strategy

Tourism has long been the economic lifeline for many small island developing countries, typically relying on seasonal vacationers seeking sunshine and beaches. However, the pandemic exposed the vulnerability of this model.

With international travel coming to a standstill, many islands are facing economic stagnation, prompting them to urgently seek diversified growth. Digital nomadism emerges as a promising solution, offering a steady year-round income stream and reducing local economies' reliance on peak tourist seasons. Moreover, compared to conventional tourists, digital nomads typically stay longer and spend more locally, fostering a more sustainable economic model.

Cape Verde is one of the countries embracing this shift. With its strategically advantageous location—just a few hours away from Europe, Africa, and the Americas—and its rapidly evolving digital infrastructure, Cape Verde has become an ideal destination for remote workers.

Beyond its obvious attractions—such as stunning beaches, breathtaking mountains, and a vibrant culture—Cape Verde has also made strategic investments in the digital economy, fostering mutually beneficial relationships between digital nomads and local communities.

A catalyst for economic and social development

The influx of digital nomads brings not only economic benefits but also stimulates the development of critical infrastructure, such as improved internet connectivity, co-working spaces, and tech hubs.

For instance, in Cape Verde, we are making significant investments in digital infrastructure, including the brand-new undersea international fiber-optic cable Ellalink, and we plan to further strengthen connectivity with the Medusa subsea cable system. These developments not only cater to the needs of digital nomads but also foster growth for local businesses and educational institutions.

Cape Verde’s recently launched "Remote Working Cabo Verde Programme" is a prime example of this approach. The initiative aims to attract digital nomads while fostering innovation and entrepreneurship within local communities. With their diverse skill sets, digital nomads can actively engage in community projects—such as teaching workshops or collaborating with local businesses—making meaningful contributions to the region.

This mutual exchange of knowledge and skills can foster social empowerment, especially for young people eager to enter the tech industry.

For instance, digital nomads from São Vicente in Cape Verde and Praia, the country’s capital, have already hosted workshops across various sectors of the digital economy—such as website development, graphic design, and digital marketing—providing local entrepreneurs with invaluable insights.

This cultural and skills exchange is crucial for developing a self-sufficient digital economy. As a result, communities can learn, adapt, and innovate, positioning Cape Verde not just as a tourist destination, but as an active participant in the global digital economy.

Equitable Development and Sustainability

Digital nomadism brings tremendous opportunities, but it also poses challenges that small island developing countries like Cape Verde must address. One of the most significant challenges is its impact on local housing markets.

The arrival of digital nomads has increased demand for rental housing, driving up housing costs and potentially forcing local residents to relocate or making housing unaffordable. This phenomenon has already been observed in countries like Portugal and Barbados, where the surge in digital nomads has put significant pressure on the local real estate market.

Cape Verde is keenly aware of this risk and is currently discussing how to regulate the rental market—specifically, by ensuring affordable housing options for residents and encouraging the development of co-living spaces tailored specifically for digital nomads, thereby easing pressure on the traditional housing sector.

Another challenge is ensuring that the economic benefits of digital nomads are fairly distributed among both them and local residents. The influx of migrant workers shouldn’t lead to economic stratification, leaving local communities feeling excluded from the digital transformation.

The government is committed to enhancing the digital skills of local residents through training and education, thereby mitigating this risk. Our digital economy strategy places strong emphasis on capacity building and "talent attraction," leveraging overseas Chinese communities to draw in external expertise while empowering local talent to thrive in a digitally driven economy.

Infrastructure is a key factor.

Developing a robust digital infrastructure is at the heart of our strategy. To attract digital nomads, we need not only stunning landscapes but also world-class internet connectivity and an environment that fosters remote work. Investments in fiber-optic cables, along with the upcoming tech parks set to be established in Praia and São Vicente, are key components of this initiative. These parks are being built to drive innovation, providing startups and tech companies with the resources they need to thrive.

Additionally, digital nomads in Cape Verde can enjoy highly attractive financial incentives—such as tax-free income earned abroad during their first year of living in the country. Combined with a stable political environment, these favorable policies are making Cape Verde an increasingly appealing destination for remote workers looking to enhance their quality of life while advancing their careers.

Building a sustainable and inclusive future

Cape Verde is continuously reinventing itself to attract digital nomads and build a sustainable, inclusive digital economy that benefits everyone. When managed responsibly, digital nomadism offers unique opportunities for small island developing nations to diversify their economies, reduce reliance on seasonal tourism, and foster local innovation.

Looking ahead to Cape Verde's future development, we hope that locals and digital nomads can coexist harmoniously, sharing knowledge and resources. By fostering an environment that respects tradition while embracing technology, we can position Cape Verde as a model for other small island developing states, helping them thrive in the ever-evolving global tourism and digital economy landscapes.

In short, Cape Verde is not only a stunning tourist destination but also a forward-thinking nation that embraces the future. By strategically investing in digital infrastructure and implementing policies that ensure equitable growth, we believe digital nomadism can drive the long-term economic and social development of the region.

Looking ahead, our challenge lies in balancing the needs of local communities with the opportunities brought by the new generation of travelers, ensuring a prosperous and sustainable future for everyone.

The above content solely represents the author's personal views.This article is translated from the World Economic Forum's Agenda blog; the Chinese version is for reference purposes only.Feel free to share this in your WeChat Moments; please leave a comment below if you'd like to republish.

Translated by: Sun Qian | Edited by: Wang Can

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