How digital nomads can transform tourism and the economy of Small Island Developing States

In the wake of the COVID-19 pandemic, a new class of global travellers emerged: digital nomads. Freed from the constraints of office work, these individuals combine exploration with remote work, using technology to stay connected from virtually anywhere.

As a result, nearly half of global destinations now offer digital nomad visas, enticing these workers with the promise of beautiful landscapes, rich cultures and stable internet access. This trend, which initially seemed temporary, has proven to have lasting appeal, particularly for Small Island Developing States such as Cabo Verde.

Tourism has long been the economic lifeblood for many Small Island Developing States, typically relying on seasonal holidaymakers seeking sun and beaches. However, the pandemic exposed the vulnerabilities of this model.

With international travel grinding to a halt, many islands faced economic stagnation, prompting a need for diversification. Digital nomadism emerged as a potential solution. It offers a steady income stream throughout the year, reducing dependence on peak tourism seasons. Moreover, digital nomads often stay longer and spend more locally than traditional tourists, creating a more sustainable economic model.

Cabo Verde is one such nation embracing this change. As its Secretary of State for Digital Economy, I have seen first-hand how the country is repositioning itself to attract digital nomads. Our location, just a few hours from Europe, Africa and the Americas, coupled with our growing digital infrastructure, makes us an ideal destination for remote workers.

But beyond the obvious attractions – gorgeous beaches, stunning mountains and welcoming culture – Cabo Verde strategically invests in its digital economy to create a mutually beneficial relationship between digital nomads and local communities.

The influx of digital nomads offers more than just financial benefits. It can stimulate the development of critical infrastructure, such as improved internet connectivity, co-working spaces and tech hubs.

In Cabo Verde, for instance, we are heavily investing in digital infrastructure, including undersea brand-new international fibre optic cables, including Ellalink, with plans to further enhance connectivity with the Medusa Submarine Cable System. These developments not only support the needs of digital nomads but also boost local businesses and educational institutions.

Cabo Verde’s recently launched Remote Working Cabo Verde programme exemplifies this approach. It aims to attract digital nomads while fostering innovation and entrepreneurship within local communities. Digital nomads, with their varied skill sets, often become involved in community projects, from teaching workshops to collaborating with local businesses.

This cross-pollination of ideas and skills can lead to social empowerment, especially for young people eager to enter the tech world.

For example, nomads in São Vicente – part of the Cabo Verde archipelago – and Praia – Cabo Verde’s capital – have led multiple workshops in various areas of the digital economy, such as web development, graphic design and digital marketing, offering valuable insights to local entrepreneurs.

This cultural and skills exchange is vital in developing a self-sustaining digital economy. It allows communities to learn, adapt and innovate, positioning Cabo Verde as not just a destination for tourists but a global player in the digital economy.

While digital nomadism presents enormous opportunities, it also poses challenges that Small Island Developing States such as Cabo Verde must manage. One of the most significant concerns is the impact on the local housing market.

Increased demand for rental properties, driven by incoming digital workers, can lead to rising housing costs, potentially displacing residents or making housing unaffordable. This phenomenon has been observed in other countries, such as Portugal and Barbados, where the surge of digital nomads strained the local real estate market.

In Cabo Verde, we are acutely aware of this risk. For instance, there are ongoing discussions about regulating the rental market, including ensuring the availability of affordable housing for residents. We are also exploring policies that encourage the construction of co-living spaces specifically designed for digital nomads, thereby reducing pressure on traditional housing markets.

Another challenge is ensuring that the economic benefits are shared equitably between digital nomads and the local population. The influx of foreign workers must not create a two-tier economy in which locals feel excluded from the digital transformation.

The government is focused on enhancing local digital skills through training and education to mitigate this risk. Our Digital Economy Strategy places a significant emphasis on capacity building and “brain gain” by attracting foreign talent, through our diaspora and empowering local talent to thrive in a digital-first economy.

Developing a robust digital infrastructure is at the heart of Cabo Verde’s strategy. We recognize that to attract digital nomads, we must offer more than scenic landscapes; we must provide world-class internet connectivity and a conducive environment for remote work. Our investments in fibre optic cables and our upcoming tech parks in Praia and São Vicente are critical to this effort. These parks are designed to foster innovation, providing startups and tech companies with the resources they need to grow.

Moreover, digital nomads in Cabo Verde benefit from attractive fiscal incentives, such as a tax exemption on income earned from foreign sources during their first year in the country. This, combined with our stable political environment, makes Cabo Verde an increasingly attractive destination for remote workers seeking quality of life and professional growth.

As Cabo Verde continues to reinvent itself, the goal is to attract digital nomads and build a sustainable, inclusive digital economy that benefits everyone. Digital nomadism, when managed responsibly, offers a unique opportunity for Small Island Developing States to diversify their economies, reduce reliance on seasonal tourism and foster innovation at the local level.

The future we envision for Cabo Verde is one where locals and digital nomads coexist symbiotic, sharing knowledge and resources. By creating an environment that values tradition and technology, we can position Cabo Verde as a model for other Small Island Developing States seeking to navigate the evolving landscape of global tourism and the digital economy.

In conclusion, Cabo Verde is not just a beautiful destination – it’s a forward-thinking nation that embraces the future. Through strategic investments in digital infrastructure and policies designed to ensure equitable growth, we are confident that digital nomadism can catalyze long-term economic and social development.

As we look ahead, the challenge is to balance the needs of our local communities with the opportunities presented by a new generation of travellers, ensuring a prosperous and sustainable future for all. We are TIWA – the Tech Islands of West Africa.