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Current State of Affairs

The labour ministry’s draft code defines a gig worker as a person who performs work or participates in a work arrangement; and earns from such activities outside of a traditional employer-employee relationship. Going by this broad definition the number of Indian gig economy workers are 426 million (informal+temporary workers) i.e. 92% of India’s active labour force (1). This is happening at an odd juncture where our demographic dividend is set to be at the highest. We will be home to the world’s largest population of young individuals — without the means to capitalise on their youth.

Reasons for this are multifold: educational organisations that are disconnected from reality, industries that work with labor laws not updated with time, a population explosion and the vast majority of our economy being informal (2). We need a new generation of firms looking primarily at imparting, developing and matching skills to meet the needs of the current state of the economy. This stack will be referred to as “skill-tech” in the future. While we see the gig economy as our likely escape route, the lack of foresight around how it is being developed can create new perils further down the road. Visions of a $5 trillion economy will be unattainable if we do not build the infrastructure to make it happen.

Data Blind Labor Markets

Rise of the gig economy reduces responsibility from capitalistic entities while capturing great amounts of power. This “power” is primarily in the form of data of individuals working on gig economy platforms. The average gig economy worker today — has no less bargaining power, workplace benefits, minimum wages or a safety net in the event that the platform they rely on decides to boot them out. In the informal sector, there is no accountability for wages; leading towards wage inefficiency for the nation’s poorest. In the absence of data interoperability, they do not even have the means to transfer records of the quality of their work to a third party platform. This data could be historic records of their economic interactions, the frequency and efficiency of their work or reviews provided by customers. Absence of data ownership in the 21st century is a remnant of the absence of sovereign rights back in the 17th and 18th. Unfortunately, regulators and policy makers have not caught up to that reality yet.

What The Future Holds

Aadhaar, despite its criticisms around privacy and technical flaws, is a 21st century miracle in its ability to bring a meaningful demographic identity to Indians. It is a foundational layer on top of which new applications can be built if we create an open-data graph. For instance, information of an individual’s education and history of gig based economic interactions could be clubbed to accelerate credit scoring. Using word vectors and geographic matching could enable individuals to find relevant jobs around them for the relevant skill-sets they hold. More importantly, clubbing identity with economic interactions gives a model to map out alternative credit systems that may improvise how subsidies and competitive bidding in India works today. As commercial entities plug into the system, we will be able to track wage changes in India at a quarterly level (vs the 5 year gap there is now) and predict the changing requirements of labor markets accurately enough for educational institutions to make changes in their curriculum.

Our research will source data from over 50+ legislators, CEOs and media personnel and close to 4000 gig economy labourers across 8 cities. We hope to collect and curate information from platforms across the spectrum — formal and informal, to get a holistic view on the gig economy today and its inefficiencies. When completed, it will be the largest research effort focused on the gig economy so far in India. Our aspiration is to use models developed from it to empower a new generation of platforms focused on skills, jobs, education and finance. This will be used to develop a gig economy oriented data platform with skill identity as an authentication mechanism. The end user will own their data letting and be able to keep a record of their skill related transactions. There are challenges with this approach. For one, it requires a heavy amount of transparency. Secondly, it will require buy-ins from stakeholders across the spectrum (policy makers, institutions, industry stalwarts and the average worker) and thirdly, there will be concerns around data-privacy. We hope to find solutions for each of these challenges over the course of the year.

References

http://www.indianstaffingfederation.org/wp-content/uploads/2019/07/ISF-Report-2019-Impact-of-reforms-on-Job-Formalisation.pdf (page 8) [Informal + Temporary]

https://www.indiaspend.com/90-of-jobs-created-over-two-decades-post-liberalisation-were-informal/ — 90% of jobs created over two decades post liberalisation were informal

Jobs Crisis in India (Raghavan Jagannathan) : “The 2011 census talks about 362 million ‘main workers’ people who had work most of the time during the previous year, but another 22 million and 97 million who were ‘marginal’ workers, with up to three months and between 3 & 6 months of work respectively. Informal work and short-term work, or a gig, is not something we are unfamiliar with. Loosely defined, a ‘gig’ means working part-time for money. The dictionary meaning of a gig economy is ‘a labour market characterised by the prevalence of short term contracts or freelance work as opposed to permanent jobs.’ Going by this definition and the census 2011 numbers. **India has 119 million Gig workers. ** ”

https://www.nobelprize.org/uploads/2018/06/advanced-economicsciences2010.pdf

This research was developed as part of the Bharat Inclusion Research Fellowship.