Gig economy: A positive thrust for India’s demographic dividend

As work from home gained momentum in 2020, it boosted the already emerging gig economy and hybrid work force. Backed by a robust digital infrastructure and well-drafted laws, the gig economy is sure to create enormous employment in the foreseeable future.

• According to Oxford Internet Institute’s Online Labour Index, India has the highest number of gig workers, with 24% of global online labour.
• The gig economy is a global marketplace which facilitates flexible, freelance, or temporary employment, empowered primarily by the digital world. It has expanded from just blue-collar workers to high profile management jobs.
• The workforce has become more inclusive as it includes an increasing number of women and people from lower income groups.
• Well-crafted labour laws and a robust digital infrastructure can help the gig economy to thrive.

Image credit: Pixels

Spurred by an uncertain market and resultant downsizing of staff as well as the rise of digital nomadism, the gig economy has moved to the mainstream from side-lines. Gig economy refers to the shift away from full time employees to freelancers and independent contractors. It is a free market system creating temporary and flexible jobs, granting more autonomy to workers, while enabling companies to operate in a competent and cost efficient fashion.

According to Oxford Internet Institute’s Online Labour Index, India has the highest number of gig workers, with 24% of global online labour. According to a report by the firm Boston Consultancy Group (BCG), the gig economy has the potential to contribute 1.25% share in Gross Domestic Product (GDP) in the long term, adding 90 million jobs in the non-farming parts of the economy. 

Survival during lockdown

The gig economy has played a key role in ensuring the survival of businesses battling the many restrictions imposed during lockdown. Along with reduced operational costs, companies have benefitted from getting large pools of talent at reasonable costs.

While saving on equipment and office space, companies have more flexibility in recruitment as well. Workers are paid according to output on contractual terms, hence eliminating any additional expenses.  

The gig economy came as a boon for workers who lost their job during the pandemic. Their expenses reduced by a substantial amount as they found work sitting at home or close to home. They no more needed to travel to tier 1 or tier 2 cities to find employment, hence ensuring safety and welfare of themselves as well as their families. 

“During the lockdown, we saw a steady increase in the number of gig workers in India. People who had lost jobs were finding gig opportunities closer home. The gig economy has the potential to help people in the unorganized sector learn new skills and help them build a better quality of life for themselves and their families” said Rahil Rangwala, Director, India Programs, Michael & Susan Dell.

Since the market is dynamic and may not always be favourable to a particular industry, gig workers have had to continuously upskill themselves in order to remain relevant in the competitive environment.

Skilled workers get an opportunity to put in more effort and increase their earning potential by taking up multiple gigs. They also have the autonomy to choose the days, hours and organisations they wish to with. 

An inclusive work force

In the recent budget, 2020-21, Finance Minister Ms Nirmala Sitharam proposed that gig workers be covered by the Employee State Insurance Corporation (ESIC).  Also, she announced that women will be allowed to work in all categories and also in night shifts with increased protection.

The government is also planning the establishment of a National Social Security Board to cover all sections of workers including platform workers and gig workers. 

The gig economy and work from home has witnessed an increased participation from woman. As they get to work from the comfort of their homes at flexible timings, women have been seen to be moving up the leadership ladder as well. Reduced physical safety concerns and multitasking with house hold chores are a few incentives, which have boosted this participation.

The gig economy has also expanded in terms if skills. Earlier, gig economy was limited to blue collar jobs such as delivery boys for Zomato or drivers for Ola. Now, the gig economy involves a large number of white collar jobs as well, such as content creators, graphic designers, communications specialists, etc in the same companies. 

The downside

In a world where mental health is gaining eminence, the gig economy has been accused of disrupting the work- life balance of workers. Erratic sleep patterns due to no defined hours of work and making themselves available anytime a gig comes up, regardless of their convenience, due to the competitive nature of this space, have been causes of concern.

Moreover, no physical interaction with peers, which used to happen during the informal settings of the workplace, such as, lunch breaks, will have an adverse impact on their social life.

Laws governing the rights of gig workers are not abundant. Under the new code on social security, 2020, the term gig worker was recognised by the government for the first time in its labour laws. The code aims to ensure uniform social security benefits to gig workers, amongst a wider group of employees. However, these are just a few isolated provisions and do not address all current problems. It is pertinent to devise proper laws governing the rights and security of people engaged in these new forms of digital work.

The benefits of investing in long term relationships with employers and colleagues, developing trust and familiarity are slowly eroding because of lack of incentive. Also, people looking for job security, a well- defined career path and the traditional process of job growth, have much to be disappointed about. 

In India, digital literacy is limited. According to a WEF report, currently, only 49.2% of India’s labour force is digitally skilled. Coupled with lack of proper and abundant digital infrastructure, the potential of the gig economy in India gets restricted.

Despite all the cons, the gig economy is bound to continually grow, given the plethora of benefits it offers to both employers and employees. It is expected to boost India’s economy as overhead costs go down and an increases workforce emerges. The government needs to facilitate growth by creating a conducive environment for the gig economy to flourish.

Digital education should be made a must from grass-root level. Digital infrastructure including cybersecurity, cloud computing, better connectivity, ease of internet access, continuous power supply, etc needs to be built on priority basis. Laws related to gig workers needs to be drafted carefully granting them procedural and substantive rights. Backed by a robust infrastructure and well-drafted laws, the gig economy is sure to create enormous employment, thereby ensuring a more judicious optimisation of India’s demographic dividend in the emerging future.