In a recent report titled ‘Working Without Borders: The Promise and Peril of Online Gig Work,’ the World Bank sheds light on the remarkable growth of the gig (freelance) economy, which now constitutes approximately 12% of the global labour market.
Released on Wednesday, the report underscores the accelerating demand for gig workers in low and middle-income countries, with a particular focus on unemployed youth and women.
Geographic Disparities in Gig Work Growth
The report reveals a stark contrast in the growth of gig work between regions. Job postings for gig workers in Sub-Saharan Africa surged by an astounding 130% between 2016 and 2020, while North America experienced a comparatively modest increase of just 14%.
This trend coincides with the global expansion of the digital economy and a prevailing culture of innovation.
The Influence of Income Levels on Gig Economy Demand
A notable finding from the report is that lower-middle-income countries outpace their upper-middle-income counterparts in generating demand for online gig workers, driven chiefly by Micro, Small, and Medium Enterprises (MSMEs).
In less affluent nations, nearly 60% of firms reported a significant increase in outsourcing to gig workers, a figure that falls below 50% in wealthier nations.
Gender Dynamics in the Online Gig Economy
The study highlights a significant uptick in female participation in the online gig economy compared to the traditional labor market.
Additionally, it discloses that six out of ten gig workers reside in smaller cities, opting for a lifestyle away from densely populated urban centers.
Proliferation of Gig Work Platforms Worldwide
The World Bank identifies a total of 545 online gig work platforms across the globe, connecting workers and clients in 186 countries.
Notably, approximately 75% of these platforms are regional or local in scope rather than global. Moreover, low- and middle-income countries constitute a significant portion, representing 40% of the traffic to these gig platforms.
Cautionary Notes Amid Promising Figures
While the report presents a rosy picture of the gig economy’s growth, it doesn’t shy away from highlighting potential risks.
Many individuals in low-income countries operate in the gig economy outside the purview of labor regulations and lack access to social insurance and benefits.
According to the report, social insurance coverage among gig workers remains alarmingly low, with nearly half of them not subscribing to pension or retirement programs.
In some nations, such as República Bolivariana de Venezuela and Nigeria, this percentage reaches as high as 73% and 75%, respectively.
Companies Adapting to Support Gig Workers
The World Bank also points to the role of companies like AXA Mansard Insurance in Nigeria and Catch in the United States, which are modifying their business models to cater to the needs of gig workers.
These firms offer services such as insurance plans and tax return filing support, extending a lifeline to self-employed artisans and freelancers with sporadic gig earnings.
Furthermore, local platforms like Findworka in Nigeria and SheWorks in Latin America and the Caribbean are specializing in specific tasks and providing essential training to bolster the skill sets of local gig workers.
A Pathway Out of Poverty
Despite the inherent challenges, the World Bank remains optimistic about the potential of online gig work to uplift individuals in low- and middle-income countries.
- “It can help address youth unemployment and support increased labor market participation for women. It can also help address inequalities in job opportunities across regions,” said Mamta Murthi, World Bank’s vice president for human development.