Stykkishólmur is a municipality located in the western part of Iceland, on the Snæfellsnes peninsula. The municipality covers an area of approximately 1,200 square kilometres and had a population of 1,308 inhabitants in 2023 (Hagstofa Íslands, 2023a). The town of Stykkishólmur is the largest settlement in the municipality and serves as its administrative centre. It is situated on a promontory overlooking Breiðafjörður Bay and is surrounded by mountains and small islands. The town has a long history as a fishing village and was an important trading centre during the 19^th century. Today, Stykkishólmur is known for its picturesque beauty, traditional houses and tourism. One of the most popular attractions in the area is the Snæfellsjökull National Park, which is home to a glacier-capped volcano and a variety of birdlife.

As a small town, the labour market in Stykkishólmur is relatively limited compared to larger urban areas. The town’s economy is essentially based on fishing and tourism, and public sector jobs. Agriculture is also prominent on the outskirts of the town and in the surrounding region. Historically, Stykkishólmur is most known for its fishing industry, which is a major source of income for the local economy and an important provider of jobs. The town has a modern harbour that is home to a number of fishing vessels and also has ferry connections to West Iceland and the Westfjords. In recent years, Stykkishólmur has also participated in some green-energy initiatives. The municipality boasts a range of private services that support the tourism industry and accommodate the local population’s needs, such as shops, restaurants and personal care businesses. Tourist amenities, including leisure and nature exploration facilities, support a thriving hospitality sector (interviews and Stykkishólmur, 2023).

The number of residents in the municipality has been relatively steady since the millennium although a gradual decline can be detected from around 2003 until 2010. Since then, the population has grown slowly but steadily which correlates to the increased influx of international tourists to Iceland during the same time period (Bogason et al, 2021). Stykkishólmur offers comprehensive public services, including healthcare, education and cultural facilities, catering to both residents and the growing number of visitors. Connectivity via road and sea is vital, with transport routes facilitating regional engagement and positioning the area as a maritime and renewable energy hub. Stykkishólmur is a central point for the islands in Breiðafjörður Bay and for connections to the Westfjords. Being located two hours away from the capital of Reykjavík, also makes it a popular area for second homes, summer houses and cottages.

In the nearby region there are some other municipalities e.g. Dalabyggð (with a population of 665), Grundarfjarðarbær (840), Snæfellsbær (1666), Eyja- og Miklaholtshreppur (102) and Borgarbyggð (3868) which is located between Stykkishólmur and the capital of Reykjavík (Hagstofa Íslands, 2023b and Samband, 2022). All these municipalities have public co-working spaces that are intended for those working in the public sector, both state and municipal, while some of the co-working spaces are also available for private partners (Stykkishólmur, 2023 and NýVest, 2023). With its modest population, Stykkishólmur is an example of a community transitioning from historic trade and fishing origins to a more diverse, sustainable economy. It should also be noted that there is a considerable number of second homes in the area, which can increase the total population of the area at certain times of the year (Hagstofa Íslands, 2023a)

Pre-pandemic, regional development policies, underpinned by the Icelandic government’s 2018 charter, had already earmarked remote work as a strategic focus for decentralising the labour market (Stjórnarráð Íslands, 2018). In 2018, the governing charter signed by the Icelandic government included a section dedicated to promoting regional development and equal access to job opportunities. One aspect of this initiative is increasing the number of jobs without a physical placement.

In the current regional plan (2022–2036), the goal is to have 10% of all advertised jobs in ministries and their institutions without a physical location by 2024, ensuring that residence does not affect recruitment. The plan suggests that these jobs can be carried out in establishments where other activities are taking place. Since then, the new governments charter has developed this goal further, suggesting that all governmental jobs should be advertised without a specific placement, unless strong arguments are raised for the work to be carried out in a specific place (Stjórnarráð Íslands, 2021).

The ongoing regional plan furthers this agenda, envisioning an increase in location-independent roles and proposing that such positions be hosted within communal establishments (Althingi, 2018). The Icelandic Development Institute has compiled information on possible housing options for jobs without a location. Additionally, a five-year action plan includes the implementation of remote workstations between 2022–2026, aiming to distribute government jobs more evenly outside the capital’s work area. Stykkishólmur aligns with this vision, featuring various coworking spaces as conduits for remote employment. Co-working spaces have been opening in the different parts of the Vesturland region since 2021 and more are under development. They are located around or in the main towns and villages of the region as well as in the two universities that operate there, The Agricultural University of Iceland (Landbúnaðarháskóli Íslands) and the Bifröst University (LBÍ, 2023; Bifröst, 2023). In Stykkishólmur municipality alone, there are four different co-working spaces intended for remote work (Byggðastofnun, 2023).

Stykkishólmur entered the remote work debate before the pandemic, guided by the national aim for balanced labour market opportunities. Goals set forth in the 2018–2024 regional plan earmark an ambitious push for location-independent roles in government institutions – a clear endorsement of the potential of remote work to encourage flexible flexibility across Iceland (Stjórnarráð Íslands, 2018; Althingi, 2018; interviews).

Aligning with this national framework, Stykkishólmur has developed an infrastructure that embraces remote work through the creation of co-working spaces. These spaces not only serve public sector entities but also open doors for private partnerships, illustrating a synergy between remote work initiatives and community development (Byggðastofnun, 2023). The COVID-19 pandemic has accelerated the trend of remote working in Iceland, prompting institutions to advertise jobs that are not tied to a specific place of business. As of 2023, there are more than 126 office centres to accommodate individuals working for the government without a physical location and additional spaces where private individuals, innovators and entrepreneurs can work with good internet connections and good general conditions (Byggðastofnun, 2023).

While the majority of the government’s full-time positions are concentrated in the capital area, where most of the country’s population resides, it is worth noting that the percentage of government jobs in the capital area (72%) exceeds the percentage of inhabitants living there (64%). This highlights the importance of initiatives aimed at promoting employment opportunities outside the capital, fostering regional development and creating a more balanced distribution of jobs across the country.

Before the pandemic, there were already efforts to promote remote work in the public and private sectors. The Ministry of Infrastructure is now driving the process of implementing remote work, particularly the initiative called “jobs without a specific location”. The Icelandic government sees the trend of increased remote working as an opportunity for rural development and more balanced regional development. It may also ease pressure on urban infrastructure, improve work-life balance and increase productivity (Byggðastofnun, 2023). The government is providing support, incentives and direction to local and regional actors to adapt to these changes (interviews).

The sentiment towards increased remote working in the public and private sectors post-pandemic is generally positive, with more flexibility and openness to remote work. However, there are challenges to address, such as ensuring access to reliable internet connections in rural areas and addressing issues related to municipal taxes for individuals working from second homes or cottages (interviews). Overall, the public sector adapted to promote remote working during the pandemic, and this experience is likely to influence the future structure and ways of working in the ministries. It may lead to changes in office spaces and a greater emphasis on digital meeting spaces and areas for concentration.

Furthermore, the local authorities’ collaboration with the SSV (West Iceland Association of Municipalities) and their efforts to develop office centres demonstrate a forward-thinking approach to enhance regional appeal and promote jobs without a fixed location (SSNV, 2021). NýVest, a non-profit organisation founded in April 2022, plays a crucial role in connecting various stakeholders, sharing information and assisting entrepreneurs in the west. As a link between different parties such as working life, academia and research, NýVest provides support in grant applications and serves as a leading source of grant information. It aims to contribute to the local communities by fostering the growth of centres and co-working spaces (NýVest, 2023).

In Vesturland, the innovation network serves as the region’s sponsor in matters of innovation and facilitates connections between entrepreneurs and business partners. Through strong cooperation in the west, the region aims to achieve success in fostering new job opportunities, promoting innovation and increasing the number of location-independent jobs.

Remote work emerges as a transformative force for Stykkishólmur, invigorating its allure for potential residents, second-home owners and tourists. Beyond enhancing the local economy, the rising prevalence of remote work propels advancements in community services, private sector growth and the vitality of civil society. The municipality’s engagement with initiatives such as SSV and NýVest (SSV, 2021; Nývest, 2023) further reinforces the commitment to creating an ideal environment for telecommuting and digital connectivity.

Stykkishólmur hopes to transform its rural economy further through initiatives like the remote work culture. This transformation could see second-home owners and tourists becoming permanent residents, who are empowered by remote work and contribute to the town’s growth. The development of remote jobs in official institutions will lead to a more equal distribution of employment, it may also attract new talent and retain the local population. The local authorities in Stykkishólmur are actively running office centres to develop the remote work trend. This is both done in cooperation with private partners and national authorities and institutions, to support private and public employees alike. This forward-thinking approach demonstrates public and private actors’ commitment to job diversification and creating opportunities without fixed locations.

Stykkishólmur is an example of a municipality that embraces remote work in its rural development. National initiatives, like the jobs without location programme, show determination to decentralise the workforce and foster digital collaboration. The work with co-working spaces also demonstrates the town’s ability to balance tradition and innovation by housing more traditional jobs with new solutions. With further strategies aimed at reinforcing this trend and providing comprehensive support to remote professionals, Stykkishólmur is poised to leverage its unique offerings as an Icelandic paradise and drive regional development.

Naturally, there are certain challenges that may arise. Local taxes can be a concern, as employees working remotely may be residents of other municipalities and therefore pay their local taxes there. Interviewees addressed this as a concern in Iceland that must be solved fairly. Housing can also be a challenge, as remote workers may face difficulties finding affordable and suitable housing options, especially since they are often competing with tourism. Another challenge is digital infrastructure, however, reliable high-speed internet connections are available in nearly all municipalities.

The ongoing evolution of remote work puts Stykkishólmur at the forefront of modern rural development. By embracing digital and location independence, the town is successfully navigating the changing nature of work. The balance between preserving its traditions and capitalising on evolving opportunities places Stykkishólmur as a model for other rural communities seeking to harness the potential of remote work for their own development.

In the regional development plan for 2018–2024, an action was implemented to create more equal opportunities and promote remote state jobs. The project objective was for 10% of all advertised positions in ministries and their institutions to be independent of location by 2024, so that place of residence would not have an impact on staffing decisions. It is proposed that such positions be carried out at workstations (i.e. in premises where other activities are conducted), and therefore, it is important to have information about available premises in rural areas. In the current development plan for 2022–2036, this action is further implemented. Non-location-specific employment, which is a continuation of the previous action, is intended to support the establishment of workplace clusters throughout the country and, on the other hand, to address the transaction costs associated with positions located in such clusters or other workplaces outside the greater area of the capital.