How IT Is Powering The Growth Of The Gig Economy?

The fifth generation of wireless networks, known as "Gig," will reshape the economic landscape. The most recent network capabilities will not only increase communication speed but will also increase bandwidth. Gig workers are likely to benefit from improved communications capacity in the following ways: adding $. trillion to the US economy.

 

Work in the future will be AI-powered, gigabit-based, and wireless. To communicate effectively, artificial intelligence will need better wireless network capabilities as it evolves and becomes smarter than humans. By 2020, organized labor will be reliant on artificial intelligence capable of communicating wirelessly with colleagues across long distances.

 

What is the Gig economy?

 

You've probably participated in this sector of the economy if you've ever used an app to call a freelance taxi driver, book a holiday rental, order food, or buy a homemade craft. According to the UK government, the "gig economy involves the exchange of labor for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers on a short-term and payment-by-task basis."

 

The gig economy can be defined as a work engagement in which there is a service seeker, i.e. a consumer with a demand for a specific task, and a service provider, i.e. a gig worker who can perform that specific task, on one side. In this economy, tech-enabled platforms connect consumers to gig workers to hire services temporarily. 

 

Self-employed, freelancers, independent contributors, and part-time workers are examples of gig workers. This project-based gig economy allows the service adopter to reduce overhead costs while also allowing the gig worker to be paid for a specific task performed rather than a fixed salary. As a result, a transition from a full-time 9-to-5 job to an on-demand, freelance, and task-based economy is possible. A gig economy is a flexible economy that involves the exchange of labor and resources via digital platforms that actively facilitate buyer and seller matching.

 

Organizations in the gig economy hire independent contractors and freelancers instead of full-time employees. It is because work is assigned temporarily and does not necessitate a systematic schedule. Companies like Uber, DoorDash, and Airbnb have similar arrangements. A gig economy produces cheaper, more efficient, and flexible services that can provide consumers with a unique and quick alternative to traditional, standardized business. Furthermore, it is solely operated via the internet, making it a very popular choice among the younger demographic.

 

In the United States, it is estimated that one-third of the population works in some capacity as gig workers. The figure is expected to rise as more businesses use independent contractors to save time and money.

 

Also Read | How Changes in The Economy Affects The Insurance Industry

 

Factors Behind the Gig Economy

 

America is well on its way to establishing a gig economy, with estimates indicating that as of 2021, up to one-third of the working population will be working in some capacity. Experts predict that this number will grow as these positions facilitate independent contracting work, with many not requiring a freelancer to come into an office. Gig workers are much more likely to work part-time and from home.

 

Employers also have a broader pool of candidates to choose from because they are not required to hire someone based on their proximity. Furthermore, computers have advanced to the point where they can either replace people's previous jobs or allow people to work just as efficiently from home as they could in person.

 

Economic considerations also play a role in the growth of the gig economy. Employers who cannot afford to hire full-time employees to do all of the necessary work will frequently hire part-time or temporary employees to handle busier periods or specific projects. On the employee side of the equation, people frequently discover that they must relocate or take multiple positions to afford the lifestyle they desire. It's also common for people to change careers several times during their lives, so the gig economy can be viewed as a large-scale reflection of this.

 

In 2020, the gig economy grew significantly as gig workers delivered necessities to homebound consumers and those who had lost their jobs turned to part-time and contract work for income. Employers will need to prepare for changes in the workplace, including the gig economy, once the crisis has passed.

 

Despite its benefits, the gig economy has some drawbacks. While not all employers prefer to hire contract workers, the gig economy trend can make it more difficult for full-time employees to advance in their careers because temporary workers are often less expensive to hire and more flexible in their availability. In some industries, workers who prefer a traditional career path and the stability and security that comes with it are being pushed out.

 

Also Read | Capitalist Economy: Features, Advantages & Disadvantages

 

Advantages of the Gig Economy

 

Working in the gig economy provides numerous benefits to both the business and the workers. Some of the benefits realized by businesses are listed below:

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Benefits of the Gig Economy

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1. Economical Effectiveness:

 

One of the primary advantages of working in the gig economy is the ability to reduce costs and expenses. This is because businesses can hire off-site workers, which reduces the need for expensive workspaces and large offices. Furthermore, hiring independent contractors eliminates large expenses such as employee benefits packages, retirement plans, and paid sick leave.

 

2. Workforce:

 

The gig economy offers a labor force that can directly match a company to a freelancer. This eliminates the hassle of dealing with a middleman throughout the hiring process, making it easier to find qualified candidates.

 

3. Output Manufacturing:

 

Modern workers in today's society are beginning to place a higher value on flexibility than in the past. This is why the gig economy is so successful. Individuals who want to supplement their income are drawn to positions that provide a flexible work schedule. Such adaptability has a direct impact on employee motivation, which has a positive correlation with output production.

 

4. Flexibility:

 

Many freelance workers in the gig economy find that their situation gives them a lot of freedom. From working the hours they desire to work where they want, there are many options for gig economy workers. A task is frequently assigned to a worker with an end date, and how and when that task is completed is entirely up to them. Workers are frequently able to work at times and on days that are convenient for them. Some people may find that early mornings on weekends are the best time to get their work done, which may not be possible with a traditional job. Workers are frequently given the option of working from a remote office or home.

 

5. Pay:

 

The pay for freelance workers varies from one company to the next. Some companies pay gig workers less, while others pay them more because they don't have to pay benefits on top of their salary. They are frequently able to charge hourly rates for their time. This means they can set their work hours and get paid for extra hours worked. Meetings and phone calls are billable in addition to regular work. Higher education is possible while working in the gig economy because both are extremely flexible. Adding another degree to your resume may enable you to earn more money as a freelancer or full-time employee.

 

Impact of Gig Economy

 

The gig economy is reshaping not only work but also broader aspects of society. The "desire for flexibility for/from workers," as well as "consumer attitudes and preferences," were two of the key preconditions discussed earlier (Woodcock and Graham, 2019). These could be combined to make sense of the gig economy's broader impact on society: workers, platforms, and consumers are all looking for greater flexibility from these types of platform services. Workers are looking for more flexible and adaptable work environments; platforms are breaking free from previous employment regulations; and consumers are increasingly expecting on-demand services.

 

In light of the customer-facing nature of many of the high-profile platforms, consumption patterns are changing. For example, Uber has significantly increased the availability of private-hire drivers, resulting in a surplus of drivers, which means that consumers frequently only have to wait a short time for a pickup. Lower prices have resulted in increased use of these services, transforming transportation practices in many cities. Consumption patterns are also changing as a result of food-delivery platforms. They have also changed their relationship with restaurants by establishing so-called "dark kitchens" (Butler, 2017), in which the food is no longer prepared in a restaurant, but in specially designed delivery units, which are often housed in shipping containers.

 

The population is unemployed. Only a small proportion of the population earns enough to meet international standards. It emphasizes the importance of passive income and multiple sources of income for Indian professionals to maintain their lifestyles. The gig economy is constantly assisting people to earn more money than they do regularly. Nonetheless, they can combine this work with their regular jobs and strive for a better lifestyle. Platforms such as Workflexi.in are allowing people to earn more money.

 

These shifting consumption patterns are linked by a common trend. Whether it is passenger transportation, food delivery, or other on-demand services, these enable other workers to externalize aspects of their "social reproduction" (cf. Bhattacharya, 2017), that is, recovering from and preparing for work. At the most basic level, faster transportation options allow for more time—either staying later at work or having more non-work time—while delivering food does not require preparation time. As a result, the gig economy is linked to broader trends of work intensification that can be seen in other sectors of the economy (Graeber, 2018). This entails taking parts of our lives that were previously organized at home—with all of the problems that can entail—and opening them up to the market.

 

To summarize

 

The gig economy is gaining traction, and it will continue to influence both employees and employers for many years if not decades. However, there are some major flaws and criticisms that must be addressed if tech developers are to continue pushing for new tools in the gig economy and if lawmakers are to continue to allow it to exist. While the gig economy's initial surge in popularity may fade, the increased accessibility of gigs and freelancers is likely to last indefinitely.