Gig Economy and Crowdsourcing

Gig Economy and Crowdsourcing

The Gig Economy and Crowdsourcing, future of work, Yes or No?

A Bittersweet Tale of Price Control and Myopic Decision-Making
Life At SIIB

As the pandemic set in, we wondered what would be the future of work? Digitization and globalization have already transformed the way organizations conduct business, and the world is witnessing a shift in the traditional employment model. One such shift is the increase in demand for crowdsourcing and the formation of the gig economy.

In contrast to permanent jobs, the gig economy is a free market system connecting organizations to independent workers for short-term, part-time freelance work. According to OECD, the gig economy’s share in total employment is between 1-3%, and a report by Mastercard forecasts these transactions to grow by 17% in a year to $455 billion by 2023.

Crowdsourcing is the practice of obtaining services, utilizing the wisdom of a group for a common goal. When a broad group of people works on a problem, unexpected and unconventional solutions are not rare. It also offers greater diversity in thinking, faster problem solving, reduces the burden on the management, and creates a market buzz for the company.

Not only does this model seem technically sound, but it also comes with plenty of benefits such as better availability of jobs, the flexibility of work, the opportunity to test and enhance skillset with an option of remote occupation. Though the concept seems interesting and has been trending in the market with the onset of the pandemic, it comes with its own set of challenges as this sector remains largely unregulated.

The Code on Social Security Bill of 2020 acknowledges platform workers and gig workers as a new occupational category for the first time in Indian law and aims to bring digital labour platforms within the purview of new or existing employment and labour regulations in India. Also, the central and many state governments have signed MOU’s with several gig platforms to augment social services. For instance, Urban Company partnered with National Urban Livelihoods Mission to generate jobs with minimum assured monthly wages for the urban poor. Also, Uber partnered with Ayushman Bharat to facilitate free healthcare for drivers and delivery partners.

The future holds limitless possibilities for the gig economy and crowdsourcing. BCG estimates that in the long run, the gig economy can potentially serve around 90 million jobs adding ~1.25% to India’s GDP.  It would not be long before the gig economy becomes the new normal, and working full-time, a rarity. What’s your take on this?