Newsletter

Newsletter September 2019

Gig Economy, the Model of the Future

What defines the gig economy?

The crises and the gig economy

Necessary changes

Gig Economy, the Model of the Future

 

The work conceived in the traditional way has suffered not few changes after the appearance of digital platforms. These have transformed the labour market into a more dynamic one of independent workers, which has brought the so-called gig economy.

There are several reasons that lead a person to opt for a piece-rate job, but since the emergence of the Internet in the day-to-day life of users, the various technological developments have encouraged a job offer that is expanding and gaining more and more followers.

 

Knowledge and technology go hand in hand in this modality of work that in the last decade has crossed borders and economic sectors. According to a study by McKinsey, 27% of workers in Europe and the United States have joined this trend.

This is how qualified professionals choose to work on their own for one or several projects or companies joining different teams, owning their time. They organize themselves better in order to fulfil the acquired commitments that bring them additional income -if they are in a formal employment- or even higher than those, that could be generated by a permanent one.

The gig economy is advancing by leaps and bounds, encompassing more spaces in the labour market around the world. Although from some organizations, it is seen with suspicion for contributing to the increase of the informal economy.

It grows, apart from traditional companies, as Internet users create developments for the exchange of goods and services.

 

 

What defines the gig economy?

 

In short, it is an economy model of temporary, short-term jobs, in which there is no contractual relationship between employers and self-employed workers. This is done in the digital world, so a good Internet connection is essential.

Working from home has become very attractive and companies are betting on the rise of this trend to save labour costs. The figure of collaborators has become more frequent in certain types of activities, most of them linked to the area of communication.

It is difficult to imagine specialists in areas such as community manager, social media manager, content curator, SEO specialists, graphic designers, programmers, sitting in an office for eight hours. One of the advantages offered by the gig economy is that those who decide to be part of it have complete control over their time and tasks to be performed, so they can set their own agenda.

Some service companies have the opportunity to take advantage of the gig economy boom to streamline processes.

 

Working remotely and with flexible hours is the dream of many people who are tired of doing work in an office all day, looking for independence by offering their services to one or several companies.

Nevertheless, there are also employees of the formal economy who enjoy the benefits of the law and want to earn extra income to improve their quality of life. Many become part of the gig economy in this way and later end up leaving formal employment to devote themselves full-time to free-lance.

There are companies that are looking for talent to do certain jobs and take advantage of knowledge and cheap labour in other countries to cut costs.

In the end, the gig economy is unregulated and it is this freedom that allows both parties (companies and independent workers) to establish the conditions of the relationship under which the work will be done.

 

The crises and the gig economy

 

The economic crises of a country and/or individual are often a trigger for a worker or unemployed person to consider trying in the gig economy. An adverse environment can be an opportunity for third country companies to take advantage of the skilled human resource of countries in crisis and establish a temporary employment relationship.

The survival instinct leads the citizens of a country in crisis to make use of any labour option that represents income, so the gig economy is one of them and without meaning to change activity.

Communities of professionals who also look to them for international projection and payment of fees in hard currency increasingly accept these digital labour markets.

In recent years, it has been increasingly observed how service providers ask their employers to be paid in crypto currencies, because it is a quick way to receive remuneration without going through a bank and the commissions that are demanded.

However, it is a disadvantage for the economy of the country where the worker is located, as payment for that service is not recorded in the nation's accounts.

The gig economy is seen by some experts as synonymous with collaborative economics. Conceptually, however, it is not the same. Venezuelan economist Aarón Olmos explains that in the collaborative economy the interaction between people through digital media stands out in function of the same objective.

 

Necessary changes

 

The labour market is in constant movement. Globalization and the Internet are setting new standards. Technology pressures changes in economies and their regulatory frameworks. However, the gig economy is being kept out of legislation for now.

Expansion of digital work is expected in the future. Governments in developing countries such as Malaysia and Nigeria have adopted strategies to encourage their workers to enter into digital work, warns the International Labour Organization (ILO), which in August 2017 created a Global Commission on the Future of Work to analyse the conditions of employees on digital platforms.

Much of the debate in the ILO focuses on whether there is a need to adapt legal and institutional frameworks to work through the Internet and how the gig and collaborative economy affects efforts to ensure decent work.

All indications are that this model of economy will drive new business. So it's better to get the most out of the gig economy.

The photo was taken from the site https://pixabay.com/

Worker participation in GIG economyWorker participation in GIG economy

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