Examining The Global Impact Of The Gig Economy Explosion

• According to estimates by the World Bank, the gig economy now makes up 12% of the global labor force. 
• Demand and opportunities for gig workers are rising at a much faster rate in developing countries — with reasons like better technology and access to broadband internet cited as major factors for growth.
• In most of the regions analyzed by the report, more women were found to be participating in the online gig economy than they were in the general labor market. However, the study cites the presence of a considerable wage gap felt by women in many regions.

The gig economy is growing, and according to estimates by the World Bank, it now takes up to 12% of the global labor force.

Using online website traffic data, surveys across 17 countries and other methods, the World Bank found that developed countries hold the majority of the world’s large percentage of gig workers. However, the study also revealed that demand and opportunities are rising at a much faster rate in developing countries — with reasons like better technology and access to broadband internet cited as major factors for growth.

For example, in world regions like Sub-Saharan Africa, job postings for gig workers on the world’s largest digital platform grew exponentially by 130% from 2016-2020. In comparison, North America’s postings only grew by 14%. Compared to South Asia (104%), Middle East & North Africa (100%), Europe & Central Asia (85%), East Asia & Pacific (39%), and Latin America & Caribbean (33%), North America’s growth rate measured last. 

Three fourths of online platforms used by the gig economy are either regional or local, and not global — which suggests a heightened focus towards more localized digital labor markets. According to the World Bank’s report, this localization of the online gig economy is likely to help countries that are struggling with unemployment rates among younger demographics. 

Who is gig work supporting?

In fact, the report found that young people actually benefit from the gig economy because it offers opportunities for steady income, the ability to learn new skills, and flexibility to balance education with work obligations. 

“A flexible workforce benefits small firms and start-ups to remain agile in a dynamic market,” a video published by the World Bank explained.

The research also suggests that the gig economy supports the growing workforce participation rates among women around the globe. In most of the regions analyzed by the report, more women were found to be participating in the online gig economy than they were in the general labor market. However, the study cites the presence of a considerable wage gap felt by women in many regions. 

According to just one example cited in the findings, “[A] female online gig worker’s wage level is equivalent to 68% of her male counterparts’ wage on a major gig platform in Latin America.”

The study also found that a majority of gig workers, 6 in 10, live in smaller cities. This suggests that regional equalities might be able to be addressed with online gig work, by presenting people with opportunities they might not otherwise have due to regional differences in industry and business. By engaging in online gig work, new opportunities have emerged all over the world. 

The challenges of a gig-work career

That being said, there are still many challenges for gig workers. For one, there is no clear career pathway. It’s one of the challenges of the online gig economy, in general. Additionally, people without easy access to internet or digital devices such as laptops, smartphones, and tablets remain excluded from the ever-growing gig economy. 

According to the findings, “Gig work shares characteristics with informal work and other diverse forms of nonstandard work that are widely prevalent in developing countries, where most people work outside the purview of labor regulations and without access to social insurance and benefits.”

Nearly half of surveyed gig workers do not subscribe to a pension or retirement program, but this proportion can be as high as 75% in economies like Nigeria, according to the report. The International Labour Organization (ILO) estimates that about 70% of the world’s population doesn’t have insurance coverage.  

Governments and the private sector have important roles to play when insuring these social protections for gig workers. While there are private companies that are reported to be developing programs for tax planning, saving and financial access, there’s still a lot of room for improvements. 

In light of these findings, it’s evident that the gig economy, while presenting vast opportunities for the world, also brings forth challenges that need addressing. The responsibility now lies with global leaders, policymakers, and industry stakeholders to collaboratively devise strategies that ensure the sustainability and inclusive growth of the gig economy for years to come.