Gig economy poised to serve up 90 million jobs to Indian workforce
Convenience, flexibility, higher unit pay, and greater efficiencies are prime considerations for companies and the gig concept could add up to 1.25% to India’s GDP in the long-run, and create millions of new jobs across all sectors.
A fundamental shift in working habits coupled with the emergence of tech has brought about this transformation, but with it comes the possible creation of millions of jobs across India. Companies like Uber, food delivery platform Swiggy and UrbanCompany are classic examples of patronising gig professionals.
The report provides a detailed scrutiny of India’s gig economy potential and sheds light on its dynamics, pain points, and opportunities for action. It states that with the emergence of technology-enabled gig work platforms, over 200 million people are considered part of the gig workforce globally. This form of ‘gig’ work is not a new concept to India and has always existed in the economy.
Based on further research it has been revealed that a gig economy has the potential to serve up to 90 million jobs (roughly 30% of India’s non-farm workforce), add up to 1.25% to India’s GDP in the long-run, and create millions of new jobs across all sectors.
After indepth studies conducted on the Indian workforce the report argues that the country’s personnel is estimated at around 500 million workers, of which around 210 million are engaged in the agriculture and allied sectors, and the remaining approximately 290 million in the non-farm sectors that include construction and real estate (62 million), manufacturing and utilities (60 million), retail (47 million), and transportation and logistics (25 million).
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The study also identified 8 distinct segments of gig workers, each with different job-drivers and priorities that must be catered-to for platforms and businesses to take full advantage of the gig economy’s potential.
Pandemic changes the job market
The pandemic in India and across the world has changed the job market. The work from home concept has become the new normal and many companies and professionals realised that there are definite advantages and the culture is now here to stay.
According to the report, personal references and offline networks have operated in India to source and meet the need for on-demand services. What has changed in the past few years is the use of technology to match and deliver on-demand services at scale. While there are some clear benefits to this type of on-demand work – namely, convenience, flexibility, higher unit pay, and greater efficiencies – it has also raised questions around minimum wage requirements, worker protection, and consumer rights. In response, governments across the world have initiated legislative and regulatory efforts – ranging from classifying gig workers as ‘traditional employees’ to defining requirements, social protection and safeguards to ensure there is parity with other modes of work. These efforts, while a positive step in the right direction, take a micro view of the challenges and do not go far enough in unlocking the potential of the gig economy in India.
Gig workforce keeps multiplying
Sectors in India that are encouraging gig professionals are the FMCG-pharma sector, which plans to increase its gig workforce from 15 per cent now to 69 per cent over the coming two to five years, the banking, financial services and insurance (BFSI) sector, which plans to spike up from 32 per cent to 56 per cent, the manufacturing sector from 35 per cent to 65 per cent, the services sector from 47 per cent to 76 per cent and technology & BPO from 57 per cent to 60 per cent. The ed-tech sector, has almost fully embraced the gig concept thanks to the advent of online education. The gig economy benefits employers, employees, as well as the economy at large with gains extending beyond the traditional notions of convenience and on-demand availability and flexibility.
It has a long-term potential and this basically comprises:
Skilled and semi-skilled jobs (around 35 million) within industry sectors
Shared services roles (around five million) like facility management, transportation, and accounting
Household demand for services (around 12 million)
Unskilled jobs (approximately 37 million) across various sectors of the economy.
The ed-tech sector, has almost fully embraced the gig concept thanks to the advent of online education. The gig economy benefits employers, employees, as well as the economy at large with gains extending beyond the traditional notions of convenience and on-demand availability and flexibility.
Four major sectors foster gig pros
The four sectors in India which are most likely to prop up the majority of the gig workforce are construction, manufacturing, retail, transportation and logistics. Together they could account for over 70 million gig job opportunities.
In the near-medium term, the report observes that there is the potential of as many as 24 million jobs (approximately) migrating to technology-based gig platforms, including:
Nearly three million jobs in shared services
Over eight million jobs servicing household demand
These opportunities could be unearthed with the establishment of a few common pre-requisites, job-specific employer requirements, and specific job-drivers important to gig workers. The potential and need for gig-based employment is so relevant that the gig economy could create approximately one million net new jobs over the next two to three years by aligning near-term incentives of employers and workers. In the long term, the full potential of the gig economy (i.e., up to 90 million jobs), will require evolution in industry hiring practices and growing familiarity with and optimization of gig-based services.
Gig economies have clearly disrupted the way modern organisations function while enriching employer-employee relationships to short-term interdependent stints that are economically as well as practically beneficial.
In another observation the study states that gig workers are different from non-gig (‘regular’) workers notably in:
Demographics: Gig workers are relatively younger (compared to non-gig workers).
Work patterns: Gig workers typically work for fewer hours per day (7 hours versus 8.5 hours for nongig workers).
Education levels: Gig workers typically have lower education attainment levels (30 percent have studied till grade 9 versus 20 percent in the case of non-gig workers).
Household contribution: Gig workers are more often secondary contributors to household income (30 percent of gig workers are secondary contributors versus 10 percent of non-gig workers).
Despite the observations of the study which are manifold the ‘gig economy’ is not an entirely new concept in the Indian workplace. The lessons brought about by the pandemic have, however, only highlighted the importance of it. Gig economies have clearly disrupted the way modern organisations function while enriching employer-employee relationships to short-term interdependent stints that are economically as well as practically beneficial.