23th January 2024 (7 Topics)

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Gig Economy

Context

The report on the Future of Work highlights that Gen Zs and millennials prefer gig roles due to flexible work locations and a emphasis on specialized skills.

Key Highlights

Key Highlights of the report –

Future job landscape: Firms are focusing on geographical expansion for talent exploration and strategic partnerships for competitive advantage and market access.
Tier 2/3 city prominence: Expansion into smaller cities gains traction for harnessing untapped innovation potential and diverse talent pools.
Drivers for expansion: Small organizations prioritize talent availability and cost savings, while larger tech firms focus on diverse skill sets and untapped talent in emerging technology hubs.
Industry transformation: The tech industry in India undergoes significant transformation, shifting from traditional offices to exploring remote work and adapting to evolving workspace dynamics.
Balance in the future of work: The evolving work landscape will be defined by a dynamic balance between efficiency improvements from automation and the expansive potential of creativity through continuous innovation.

What is gig economy?

As per the World Economic Forum (WEF), gig economy is defined by its focus on workforce participation and income generation via “gigs”, single projects or tasks for which a worker is hired.
Gig economy includes all platforms that hire independent workers across sectors like e-commerce, technology, food & beverages, home services among others.
Gig workers are typically hired by companies on a contractual basis and are not considered employees. They do not receive some of the benefits that on-roll staffs do.
Classification: Gig workers can be broadly classified into:
- Platform workers: Those whose work is based on online software apps or digital platforms such as food aggregator platforms Zomato, Swiggy, Ola, and others.
- Non-platform-based workers: Casual wage and own-account workers in conventional sectors, engaged part-time or full-time.

Benefits of Gig Economy:

For Workers: Gig economy can provide more flexibility, autonomy, income opportunities, skill development, and inclusion.
For Employers: It can enable access to a large and diverse pool of talent, lower fixed costs, higher scalability, and better customer satisfaction.
For Customers: It can offer more choice, convenience, quality, and affordability.

Current trend in the Indian Economy-

about 47% of gig work is in medium skilled jobs
about 22% in high skilled
about 31% in low skilled jobs

The trend shows the concentration of workers in medium skills is gradually declining and that of the low skilled and high skilled is increasing.

Expected trend

While in 2020-21, the gig workforce constituted 2.6% of the non-agricultural workforce or 1.5% of the total workforce in India, by 2029-30, gig workers are expected to form 6.7% of the non-agricultural workforce or 4.1% of the total livelihood workforce in India.

Significance of Gig Economy in India

Boosting Employment Opportunities: In India's quest to provide employment opportunities, the gig economy plays a crucial role by expanding job availability and enhancing labor force participation.
Addressing Skill Diversity: Approximately 47% of gig work involves medium-skilled jobs, 22% in high-skilled roles, and 31% in low-skilled positions, catering to a diverse range of skills in the workforce.
Youthful Demographic Advantage: With a large population of educated and tech-savvy youth, India leverages its demographic dividend, as many millennials seek the gig economy for its flexibility and work-life balance.
Empowering Female Labor Force: The gig economy benefits female workers by providing income-generating opportunities, choice, and flexible work arrangements, leading to an increase in women's participation from 18% to 36%.
Post-Retirement Opportunities: Contract work's flexibility attracts retirees, enabling them to continue working on their terms even after retirement.
Democratization of Job Opportunities: The gig and platform sector, characterized by low-entry barriers, holds significant potential for democratizing job opportunities and fostering inclusive job creation in India.
Technological Advancements Driving Change: Rapid technological advancements, especially in AI, robotics, and data analytics, eliminate workplace limitations, enhancing productivity and improving the living standards of gig workers.
Revolutionizing Last-Mile Delivery: The gig economy has revolutionized the last-mile delivery industry, making it more accessible, affordable, and efficient through innovative work models.
Facilitating Remote Work: Telecommunications have made work more dynamic, enabling collaboration irrespective of geographical constraints, fostering the growth of remote work.
Enabling Start-Up Culture: Gig workers serve as a cost-effective alternative for businesses, allowing project-by-project hiring without the obligation of providing traditional employee benefits.

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