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Global Business Jet Market: Industry Analysis and Forecast 2021-2027

Gig Economy

Gig economy refers to the market comprising of temporary, flexible jobs for individuals, freelancers etc. In the gig economy the organisations enter into a temporary contract for a short period of time with independent contracts. By definition ‘gig’ refers to a project, task or assignment for which a person is hired on demand in most of the cases by digital or virtual means. Technology and digitisation form the foundation of this economy. Gig economy workers range across the spectrum of professions from highly paid to below minimum wages, management consultants, video producers, engineers, delivery boys, chauffeurs etc.

At present the world is in the 4th stage of industrial revolution in the form of globalisation, digitisation, techniques involving artificial intelligence, the internet of things etc. In this fast paced world, time plays a crucial role in determining success or failure. To match with this pace organisations all over the world have started adopting different methods, one of them being increasing production and minimising time of completion of projects and services. These lead companies to hire freelancers for a short term contract because companies need them for a particular project or business model. This proclivity gave rise to gig economy.

Gig economy started in developed countries like USA, UK but gradually it has spread to other developing countries as well. India being a developing country with a huge market has experienced the spread of gig economy in various sectors, mainly in transport and in food delivery services.

For example transport sector organisations like Ola, Uber hire a good section of freelancing drivers. Similarly food delivery groups like Zomato, Swiggy also hire gig workers.

There are various reasons which fuelled the rise of gig economy in India and also in global markets. Some of them are discussed below:

1. As mentioned above, demand for faster results is one of the causes of rise of gig economy.

2. Cut-throat competition in today’s market demands reducing cost ad providing cheaper services. This in turn creates demand for work force with skill set and organisations look for freelancers to meet their needs.

3. Slowdown in both regional and global economies, organisational downsizing have contributed to rise of professionals opting for flexible arrangements.

4. The millennial generation values a flexible work schedule and jobs which it is passionate about so strongly that is willing to give up stable, higher pay, regular and permanent jobs. This generation wants to enjoy a better work-life balance.

5. Embracing open-talent/freelancers economy hel[s organisations blend full-time employees with short-term workers, making them more efficient such as professionals cost a third of what a traditional employee might while bringing new set of expeience and special skills (companies save resources in terms of provident funds, paid leaves, office space)

6. Due to digitisation employers are no longer bound by geographic boundaries and can easily select best talent for a project and also hire less staff to meet the targets.

7. Lack of formal jobs (both government and private) pushes individuals to join gig economy. Example- india’s recent periodic labour force survey shows unemployment rate at a 45 year high at 6.1%.

8. The Indian governemnt’s push for a digital economy and initiatives like “Digital India” add to the momentum of gig economy.

When compared with developed countries like USA and UK, Indian gig economy is still in its infant stage scope is narrow and mainly works in transportation and delivery sector, whereas, in USA and UK it is spread over a broad range of skills including service sectors urban consumption. According to reports USA and UK have around 30% of work force in gig economy. This percentage is less in india but india is a prominent contributor in global free lancers accounting for about 40% of gig jobs. The spread of gig jobs calls for a change in labour laws. This issue has been addressed by USA and UK and they have come up with laws which orders organisations to treat “Gig” workers as “employess”. But india still lags behind in this area as no laws have been made for gig workers. Moreover in india gig workers are classified as independent contractors under labour laws and hence they have no fixed working hours, no protection against unfair dismissal, no right to receive national minimum wages, paid holidays or sickness leaves.

Gig economy is creating lakhs of jobs and helping in reducing unemployment which will boost the economy but certain issues have to be addressed before gig economy can be truly beneficial. Government intervention and labour laws modification is essential to solve problems of underpaid workers, lack of job security, lack of employess benefits like health, insurance, lack of provident fund benefits etc.. Though government intervention is need of the hour for flourishing of gig economy but government must make sure that flexibility of gig jobs remain intact and both employers and employees get their benefits. Gig employment is a symptom of slowing economy and due to pitiable work conditions it acts as a slow poison for workers. To counter these symptoms, government must back gig economy by social security systems and at the same time government must invest money in developing and increasing infrastructure and jobs by indulging in well-structured employment generation programmes. According to economists since 2008 financial crisis, unemployment has increased and has still not fully recovered and persistent unemployment is damaging the economic recovery. The trend of emerging gig economy is complex and it threatens global financial stability. Due to this international organisations like IMF, ILO, UN, World Bank are increasingly focussing on the problem of unemployment.

From the above discussion it can be easily deduced that gig economy comes with its share of benefits and disadvantages and it has great potential to boost economy but for sure it cannot be looked upto as the sole solution to the problem of unemployment neither can it be allowed to grow without checks and balances.

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To see video and download pdf, visit: https://currentaffairsreview.com/gig-economy/

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