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Vijay Eswaran Joined the World Economic Forum to Share His Thoughts on “The Demographics of the Gig Workforce”

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Author, entrepreneur, and philanthropist Vijay Eswaran attended the World Economic Forum’s Annual Meeting in Davos, taking part in a panel called “The Demographics of the Gig Workforce.” Eswaran is the executive chairman of the QI Group of Companies, a longstanding ecommerce company based in Hong Kong. It has a portfolio of ecommerce companies, luxury brands, and more. Eswaran is also the university council chairman of Quest International University in Malaysia. He established the RYTHM and Vijayaratnam foundations, which both work with local and international NGOs and other organizations to promote community development and well-being. He is an international speaker and the author of six books, the latest titled Two Minutes from the Abyss.

Some of the questions that the panel tackled included:

  • Are gig workers increasingly taking risks related to their labor and their own capital?
  • What measures should be put in place to safeguard the rights of gig workers?
  • What are the implications of the expansion of the gig economy on the youth workforce?
  • Since developing economies account for a considerable amount of gig work, what are the implications of this trend for policymakers and regulators?

This was an interesting conversation on the perils and pitfalls of one of the world’s fastest growing industries. The “gig economy” and the “sharing economy” are terms used to describe the vast number of jobs that are beginning to move to the online world. The gig workforce has expanded globally to an estimated 48 million workers, and more gig workers from developing countries are entering the global marketplace daily.

What are the risks and rewards of the gig economy going global? As the gig economy grows, it highlights its ability to share assets, but many believe that it is not really sharing at all. There are numerous different applications within the gig economy, such as Airbnb, that follow the spirit of sharing underused assets and building an online community. Far more, however, fall short. “Sharewashing” describes what happens when a company uses terms like “sharing economy” or “gig economy” as a type of false advertisement to be perceived as a part of this exciting new trend.

As discussed at the summit, the gig economy can mean different things in different places, and this sector of the economy is so new that there is still confusion about the terms used to describe the type of work being carried out. Such terms include “sharing economy,” “collaborative economy,” “on-demand economy,” and “gig economy.” One example of this confusion is ridesharing. Some companies truly represent the sharing economy by allowing drivers to lease out their cars in an efficient way through the use of a simple ridesharing app. However, many of the most well-known companies in the ridesharing industry are the owners of the cars, which no longer makes them truly part of the sharing economy in the way that the public believes they are.

Co-panelist Christy Hoffman pointed out that what employees should be asking “is really how much control does the platform of, [for example], Uber have over when and where you work already… the conditions [you work in], and the amount of money you receive. It’s not just somebody getting out there and driving their car looking for rides. There’s a lot of control from Uber, and that’s why so many places have found them to be employers.” Rather than being part of the sharing economy, Uber is, in fact, simply an online taxi service. It is also possible for one platform to fall under multiple definitions, which further adds to the confusion.

Hoffman concluded that “the gig economy is not limited to a subsector of freelance workers.” She believes that the people generally considered freelancers are only a small portion of the greater gig economy. She divides the group into two categories. The first are those freelancers who are geographically specific, such as Uber drivers. The work they do is specific to where they live. Another example is freelancers who assist with household tasks, such as those hired to set up IKEA furniture. They are also limited to their geographic region. The second subset includes those jobs and gigs that are put up for auction all over the world. This includes those jobs that can be accepted in regions such as Nigeria. The first of these categories is what is most well-known in the global economy. The latter, the one that is bringing uncertainty to our economic future, is a small percentage of the entire global workforce.

Eswaran explained the way in which the next generation entering the workforce has been a significant factor in the growth of the second category of this gig economy. Millennials, he said, “really fit into [the gig economy] brilliantly because the millennials of today don’t really want a nine-to-five existence. They are looking to basically be in charge of their own lives, so to speak, and they need to have the incentives. They are also not looking [to obtain common status symbols] in anything they are doing; a car and a house is not something they are looking for right away. They want to be traveling [and] to be able to develop an income in between, [and] the gig economy supplies that.”

In addition to changes in the lifestyle of the workforce, new forces of technology are compelling companies to rethink their business models and change the way that they do business. One area is freelancing, which has become a major player in the growing gig economy, although freelancing itself is not new.

“My own take on the gig economy is that it’s actually been around for close to a century. Perhaps it was tagged in the last few years, but in essence, the concept of working in between jobs, transient work, goes all the way back to the 1890s when you have companies like Avon [forming], then Tupperware in 1925, Amway in 1950, and… Encyclopedia Britannica, and so on and so forth. People actually worked door-to-door long before the internet of all things, but they were very much a gig economy in a sense… working within jobs as opposed to a nine-to-five existence.” – Eswaran

Technology makes it easy for freelance workers to connect with their markets and forces companies to change. In 2018, approximately 13 percent of the global working-age population was engaged in some kind of freelance work. A majority of the recent job growth in countries like the United States has been attributed to freelance work. It is estimated that more than 25 percent of all workers in emerging economies like those of Bhutan, Vietnam, and Colombia are freelance workers.

“The gig economy has taken on a major role even in [Southeast Asia], but primarily so in the first world. In emerging markets, it is actually the fastest growing area of growth. Now, because of the gig economy, you really cannot see the employment the way you used to because gig economy… is people who are doing jobs in between – a gig meaning a contract position, in other words. So, Uber drivers, for instance… and a whole range of Airbnb people who are involved in business and so on… they are all gig [workers]. And they don’t turn up on any economic markers, and therefore, if there is an unemployment ratio of some kind, then the gig factor does not come into play. So, at the same time let’s take into account millennials; now, this is interesting because millennials have changed the way that we have to perceive work. The future of work is going to be defined by millennials. Millennials don’t look for the same things we do… they’re not interested in getting a car… or a house, or security, or things of this nature. Insurance, for instance, is one of the last things on their minds, so the industry itself is being disrupted by having to create products for the millennials.”  – Eswaran

Technology itself is rapidly evolving and forcing companies to keep up with the pace of change. Eswaran pays close attention to the behavior patterns of millennials. What he sees is a seismic shift in the way that companies will need to market and advertise in the future. In the forum, he stated that it was “very clear to [him that] we need to reassess how we market, because data is critical. 5G is going to change the planet. The real war being fought across the planet right now is basically [about] 5G because 5G, when it is introduced this year, will probably change the way we all work.”

In the past, freelance workers had to seek out clients and enter into contracts directly or through traditional methods, such as a staffing firm. The majority of freelancers around the world still uses these traditional methods. The gig economy, however, provides freelancers with a digital method of connecting to clients. This revolution allows inactive, unemployed, and underemployed freelancers to access work virtually anywhere in the world. The pace at which these new apps and ideas are springing up has created some fear and chaos not only for companies but for workers as well. The gig economy, despite all of its advantages, has also undermined some aspects of traditional labor. Eswaran discussed his thoughts on people’s livelihoods that have been upended by the arrival of the gig economy.

“The World Bank estimates that, by 2025… 750 million people will be joining the workforce. There is no way, with the size of the planet… that even if all of the countries together set aside their wars, differences, and challenges of every kind… [they could] actually [work] to provide that many jobs… It’s never going to happen, at least in my view… So, the issue would be, again, emerging markets represent a huge portion of the world. I mean, to look at the world purely from the viewpoint of Europe does not really make much sense, because India by itself is far far beyond it. The question about what is and what isn’t part of the gig economy is interesting because of [examples like] surgeons, who go and do odd jobs here and there. Are they not in the gig [economy] as well?… What about video jockeys or disk jockeys? The people who work a couple hours a week doing this, that, and the other… The future of work has changed, and slowing down Uber for instance, at some point, it is going to be a challenge, because it is in a way a human right to be able to work and do whatever work you wish to do without it having to be employment. I don’t think there is any particular plus [to] being an employee.” – Eswaran

Technology is changing the workforce in some other major ways as well. For one, it is changing the types of jobs that are in high demand. This is creating an influx in job churn. Other jobs are under threat from automation, with some estimates as high as 50 percent. At the same time, however, new technology is generating new opportunities and jobs, and it will be up to us to determine how we create systems for skill development and adapt to new technology appropriately. While talking about opportunities, Eswaran made a point that “across countries like Indonesia, Kazakhstan, and the MENA Region… we have access to people who sit in countries that we never thought would be able to [succeed].”

“Some of our best IT people today come from places like… Africa, Sri Lanka, [and] Central Asia, and they actually do work for us on a contract basis. In essence, I think that the ability to adapt to technology is amazing. For instance, if one was to take a look at the millennials today, most of them would have started off with iPads; definitely Gen Z would have started off with iPads before anything else. I’ve got two at home [and] their incredible speed on the iPad and how fast they are able to process information befuddles me, and I’m in the IT industry… In a sense, their viewpoint of the world and the access to information that they have… has created literally a whole new generation of people who are thinking in a different direction.” – Eswaran

Technology is also changing how work is organized. In the gig economy, new platforms and apps can connect consumers and owners of human capital in ways that we never thought possible. The gig economy is not black and white. It is made up of many different, specialized, and unique industries. In the end, it will just be a part of the economy and will not require special terminology. At this point in time, however, the industry is simply too new. It is now fully understood that we have vastly miscalculated the size of the gig economy, and it is reasonable to agree with Eswaran and conclude that the gig economy is still defining itself.

“If I were to look at it in terms of the future of work moving ahead, then the gig economy today is basically, in my mind, a transient economy. It is still yet to be defined; it is in the process of being defined. [As an ecommerce company, QI Group] began about 20 years ago [and has developed a] database of close to 18 million people across the emerging markets. Out of that, 10 percent of them are fully our direct sales force, in a sense. We have [roughly] 900 products within our system, so [gig workers] both buy and sell. They are also out there working full-time. 10 percent of them are fully active.” – Eswaran

It is apparent that governments will first need to understand these new technologies and then, to some degree, regulate these new models of work. Eswaran is suspicion of any government role in putting formal protections around the gig economy for employees. He stated that “the question would be: do governments really know what’s good? In [his] opinion, they are still catching up.” Corporate responsibility will need to play a major role in shaping these new labor markets and designing a new social contract for the gig economy. Universities and educators will also need to utilize these new technologies to help future citizens entering the workforce develop useful skills. The World Economic Forum Annual Meeting panel on “The Demographics of the Gig Workforce” aimed to create an open dialogue and nurture honest discussions about the future of the gig economy. This type of open forum can help inform today’s leaders and help them determine whether the future growth of the gig economy maximizes opportunities for all of society or if we run the risk of creating online drones who are barely scraping by from one gig to the next. Eswaran simply feels that the ecosystem is still evolving in that respect.

“There was a time, and I’ll bring back the last 50 years or so, [when] universities actually defined the platform by which someone entered the workspace. So, getting a degree from Harvard, Stanford, Princeton, or Yale, as opposed to somewhere else, made that much of a difference because that defined your entry point. But employers of today, in my mind, are looking for skill sets, [and] universities are not able to deliver those skill sets. Universities, I guess by definition, are institutions that were designed in the 19th century, staffed by people in the 20th century, trying to create a workforce for the 21st century. So, how are they actually going to perform? When I’m hiring people these days, their degree is the last thing I look at.” – Eswaran

It is still unclear whether these online platforms are creating completely new opportunities or if, like freelancing, they are simply bringing work online that was previously conducted offline. Many believe that the answer lies somewhere in the middle. Like a lot of new technology, the gig economy is neither entirely good nor entirely bad. Digital platforms are useful for a wide range of workers, from highly skilled to entry level. The applications are seemingly endless for both local and global use, and the gig economy has great potential for the developing world. If used properly, the information that these platforms collect can help society through smarter regulations and more agile safety nets, while at the same time stimulating the economy by selling more goods and services.

Be sure to follow Vijay Eswaran on social media, for more insight into the gig economy, and what makes the modern business world tick.  Find him on Twitter, and Instagram.

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