Newsletter December 2016

The "Gig Economy" : Freedom Opportunity and threat.

What is the Gig Economy? Literally, the economy of small jobs, or even how the Internet revolutionizes the labour market, after that of trade (Amazon), Hotel (AIRBNB) or transport (Uber).

Whether it's selling items on Ebay, taxi services via Uber or welcoming tourists via Airbnb, the world of work seems to be changing. This is the so-called "gig economy" where revenues are earned or supplemented by online trade in goods and services.

The increase in inequalities for many years is mainly due to the increased concentration of wealth production held by an increasingly restricted number of people. The "Gig Economy" would therefore be the solution, distributing all this capital into the hands of millions of micro entrepreneurs. This new trend offers opportunities for several different types of profiles, from the student who wants to have some pocket money, to the single mother who is struggling to close her ends of months through the unemployed at the end of the law, all in Offering total flexibility in the timetable.

But we must be careful that this does not produce the opposite effect. If we look more closely, the specialized platforms offering services are aimed at a rather affluent clientele. For example, you are offered to park your car or deliver your drinks in less than an hour. The spectre of social inequality rode and diffused a sense of duality within society: the vast majority offering services on demand to a handful of privileged.

The social and economic effects of the "Gig Economy" are not yet quite clear. In many countries, governments have had to pass laws in haste to adapt regulations to this revolution, but also to procrastinate these abrupt changes, hitting the mainstream companies. On the side of the "Gigger" This new trend creates a form of insecurity, because at the moment it does not benefit from any advantage linked to a classical job (points retirement, social insurance, health, unemployment points etc...). In this area, the MGI Economy still has to make progress to be seen as a viable form of work.

30% of self-employed workers have no choice but to work independently. Although they are a minority, they are usually associated with the independent workforce. This group can be divided into two categories: those who derive their primary income from self-employment, but would prefer a traditional job, and those financially fragile who would prefer not to work marginally, but are Forced to do it to make ends meet.

Certainly, with the "Gig Economy" model, the boundaries between private and professional life are increasingly blurred. But this "revolution" of the world of work does not go without asking questions about the protection of employees and especially about "what will work in the future look like?"

On the other hand, there is something very rewarding about becoming your own boss, and having a hope of achieving a better balance of privacy/work. With these odd jobs, it becomes easy to learn how to manage and create your own micro-business. Moreover, this stimulates innovation throughout the economy and promotes professional activity thus playing its role in the fight against unemployment.

So it seems that the revolution is only in its infancy.

We may be led to see an increase in self-employment as the hiring costs of employees increase.

That would push the States to adapt because the tax losses would be gigantic.
Indeed people tend not to realize that renting their home or car generates additional income (loss for states).

Choice is usually a good thing in life, and the lowering of barriers provided by today's technology could be seen as democratizing entrepreneurial opportunities. But the fragmentation associated with work from the MGI Economy can bring new forms of insecurity with it. This will likely require new ways of seeing traditional policy tools around employment (and consumer) rights.

In the context of Isahit, the aim is to use technology to break down barriers, to provide opportunities for disadvantaged people in emerging countries, to increase their incomes and to remove them from a situation of extreme poverty and/or their Facilitated access to new perspectives (entrepreneurship, schooling...)

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Published in Newsletter, Impact Sourcing