People want a better life.

And the Internet has connected the outermost populations giving them a feed into the biggest transformation ever to grace mankind.

The applications of the Internet are countless and promise to deliver huge gains in productivity while lifting entire populations out of poverty.

The next leap of digital migration will see the remaining 3 billion of unconnected users connected offering new markets for our tech behemoths.

Every day that passes by, not only does the value of technology companies rise, but the level of expertise increases at a hyper-accelerated pace.

The Mad Hedge Technology Letter diligently chronicles the never-ending paradigm shifts in the industry.

Yes, indeed, it's a sellers' market for anything closely resembling tech.

Recent stories are legion.

The Long Island Iced Tea Corp. beverage company rebranded itself as Long Blockchain and saw shares shoot up 289% on the basis the company might "diversify."

The human capital fueling the outperforming tech sector is like the blood that pumps through the arteries.

Now, governments are getting in on the act, crafting policies that attempt to lure in top tech talent.

Digital nomads are frequently typecast as tech-savvy Millennials remotely working via an Internet connection while living as an expatriate.

However, they come in all shapes and sizes and that is the main point.

The Baltic nation of Estonia has been one of the leading lights in tech innovation, rolling out Skype before Facebook and Twitter existed.

Skype was entirely comprised of local Estonian developers who achieved this in the early 2000s.

Quite a feat for such a small nation.

This charming Baltic country is stepping up its game by announcing a new visa targeted at digital nomads.

In January 2019, Estonia will roll out a revolutionary visa allowing digital nomads to work in Estonia all year round. This visa also includes 90 days of travel in the Schengen Area of mainland Europe.

This visa isn't targeted at EU citizens who already reap the benefits of working all over the European Union.

Estonia is on a mission to amass as many tech-savvy workers from far-flung places around the world, incorporating them into Estonian life, and boosting the level of innovation in a country that prides itself as a start-up hub.

And more importantly jacking up the volume of tech workers.

These digital nomads create communities that harness an enormous flow of tech know-how. Usually their friends are fellow like-minded digital nomads that roll in packs with each other.

Tallinn, Estonia has rapidly turned into a top 10 digital stronghold attracting hordes of digital nomads.

If technical issues arise, help is usually just a shout across a coffee shop and presto!

Everything is fixed.

The message is that simple.

Estonia does not care where you are from, how many sugars you drink with your tea, or how you style your hair in the morning.

The concern there is if you know how to use a computer well or not. Plain and simple.

The global talent shortage is dire, and this is just the beginning.

Try hiring an experienced artificial intelligence engineer on the cheap, and headhunters will just hang up and delete your contact information. Better to think of 10 figures.

In fact, something must give because visa policies are entirely based on legacy systems of yore.

The world has moved on and visa policies should reflect it.

Expect more exotic visa policies pinpointed exactly toward the type of immigrants that nations want as part of their national policy.

With the advent of low-cost carriers such as airBaltic, Spirit Airlines, and Norwegian Air, taking a flight halfway across the world is only a $200 proposition thanks to wonders of deflation and competition.

And the further creation of private short-term rental app Airbnb has allowed digital nomads a pipeline of private housing to tap into when they jet set across the globe.

The common denominator that denotes a perfect location for a digital nomad is cost.

Locations such as Copenhagen and Monaco are places of cultural beauty but pricey for a digital nomad to operate from as the wallet turns lighter consumed by the additional marginal cost of housing and hooking up a decent Internet connection.

Estonia and the rest of the Baltic countries are affordable and boast great digital infrastructure.

After the collapse of the Iron Curtain, these post-Soviet republics stumbled.

Jaded by generations of relying on the Soviet infrastructure, adapting to independence meant building everything from scratch.

Without the Soviet infrastructure, which was all they knew, developing a thriving country out of the ashes of the Soviet implosion was agonizing.

These countries that hug the border of Russia bet the farm on creating a digital infrastructure and invested the little they had into enhancing connectivity.

It's no shocker the Baltic countries of today boast a faster average Internet connection than America today.

In general, antiquated government systems are mired in bureaucracy and operate rudimentary systems straight from the history books.

Many governments suffer from the short-termism of the highest leaders doing everything possible to improve narrow interests irrespective of the big picture and usually solely focused on reelection.

This problem is echoed in America with the government digital infrastructure 20 to 30 years behind.

It is only now that Washington is reaching out to Silicon Valley to upgrade its dinosaur systems of yore.

Estonia is also grappling with aging demographics as with many of the Western powers and must lure 440,000 people just to maintain the current population of 1.3 million people.

Many of these Baltic countries lose huge swaths of youth that migrate to higher wage countries in Western Europe.

Expectedly, they never come back unless just visiting relatives in effect crushing the local birth rate.

The brain drain has also spilled over to low-income countries in Central and Eastern Europe such as Moldova, Poland, and the Ukraine.

Young people want a better life standard and will move across the universe 10 times over to find it.

Many of these Baltic countries have lasting ethnic tensions - a holdover from Soviet times - because of the substantial leftover minority of Russian-speaking Russians dotted around the Baltics.

The digital nomad visa is seen as a strong pivot to the West, attempting to shake off the Soviet heritage and Russian people.

Baltic countries do not want to be the next land grab for Russian President Vladimir Putin. Creating a powerful tech industry would be a key victory for the pro-West government.

Ethnic Russians still make up about 20% to 30% of the Baltic countries' population and live in the face of locals who view them as unfortunate riffraff.

Sometimes, the progressive policies have backfired.

Latvian banks have been a recipient of a massive witch hunt.

Washington has accused Latvian banks of being a facade for laundering Russian capital.

These negative headlines indeed will exacerbate ethnic tension.

Placing an army of digital nomads along the Russian border effectively acts as a deterrent and real army.

Since the aggregated value of digital nomads grows by the day, businesses will have incentives to keep the nomads along the border innovating and profiting from the global digital migration that is taking place as I write this.

The Estonian government has been bold and in some ways is acting with a start-up mentality itself.

This young, audacious government looks to scale up as fast as possible. Visionary policy is seen as the solution to maneuvering around long-lasting problems.

These pro-growth tech policies could invigorate local youth causing them to stay at home rather than flee to greener pastures.

This lifeline might slow down the 60% of local Estonians who dream of moving to a place where they can live better.

Rebranding itself as the digital nomad epicenter is a risky move that most governments wouldn't dare to do.

It's easy to ignore the brain drain in the Baltics while I am living in the Bay Area.

Silicon Valley has been drawing in the cream of the crop for years.

Developers want to stay in California because of the high standard of living, which is even nicer on a developer's salary.

No doubt the Bay Area has poached its share of Baltic working professionals.

However, this Estonian policy starts with the low-hanging fruit as the biggest names in the industry will gravitate toward the oodles of venture capital and large pool of talent. Unfortunately, that place is not the Baltics.

You must learn how to crawl before you can walk. If this visa experiment takes off, it could be a game changer while nudging the Baltics closer into the West's orbit of influence and raising income levels.

A win-win situation.

As for John Thomas. I won't be taking a $200 flight to Estonia to work in a coffee shop.

I prefer Incline Village, Nevada, and Zermatt, Switzerland, as my favorite digital nomad hangouts.

If it's not broke, don't fix it.

See you there in the summer!

 

On My Way to Switzerland

 

Chiang Mai, Thailand - Another Digital Nomad Stronghold

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Quote of the Day

"As tech leaders we have to admit that we are hugely disconnected with our nation. I don't like it but have to recognize this issue," - said current CEO of Uber Dara Khosrowshahi in 2016.

 

I tell people at my strategy luncheons that living in the San Francisco Bay area is like living in the future.

There is an explosion of high tech innovation going on here, and we locals often find ourselves the guinea pigs for the latest hot products.

However, sometimes the future is not such a great place to be.

I learned this the other day when I received a parking ticket in the mail. I didn't recall finding a notice of violation tucked under my windshield wiper in the recent past, so I looked into it.

To my chagrin, I learned that the city is now outfitting its buses with video cameras pointing forward and sideways.

The digital recordings are then transmitted to parking control officers sitting behind computer screens for review. They issue tickets, which are mailed to the registered owners of the vehicles.

San Francisco suffers from one of the worst parking nightmares in the country. The streets were never planned - they just sort of happened on their own during the frenzy of the 1849 gold rush.

They were built to handle the traffic of horses and carriages, and later cable cars, not the crush of traffic we get today.

Sky-high real estate prices have driven millions into the suburbs across the bridges over which they must commute. So, parking has always been in short supply and it is very expensive. When I drive into the city for a Saturday night dinner, sometimes the parking tab is more expensive than the meal.

Newly minted millionaires from tech IPOs are now buying vintage Victorian homes, and then retrofitting garages underneath them. Every time this is done, it eliminates another parking spot on the street to make room for the driveway.

So, while the traffic is increasing, the number of parking spots is actually declining.

The city originally installed the cameras to catch offenders driving in bus lanes during rush hour. When they discovered that the cameras also captured the license plates of illegally parked cars they expanded the program. Last year 3,000 such tickets were issued.

The program has been so successful that the cash-strapped city will greatly expand it this year. And with a great San Francisco track record to point to, the firm selling the system is planning on going nationwide. Soon it will come to a city near you.

Like I said, sometimes the future is not such a great place to be.

 

Parking in San Francisco Can be Tight

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Quote of the Day

"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty," said the late British Prime Minister, Winston Churchill.