Why the gig economy is inescapable for everyoneBy Staff Writer 10 November 2021 | Categories: feature articles
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By Georgie Midgley: CEO M4Jam
The arrival of Covid-19 in our lives almost instantly nullified plans, predictions and expectations in every country on Earth. Although the vaccination programme promises to restore some version of normality to our social lives, the financial disruption over the past 18 months has irrevocably changed the course of the world's economic path.
Using the example of crowds returning to sporting fixtures, it is clear we will soon regain normality in some aspects of our lives. But will anything else return to normal? Using another simple example, it seems incredibly unlikely that the foothold online shopping has gained through the pandemic will be forfeited. From financial services to retail, the digital realm will dominate.
The internet meme about what really killed outdated business models, such as video cassette hire with its late return charges, holds equally true in the face of growing digital transformation elsewhere. The convenience, scalability and low cost of using digital channels outweigh the benefits of swimming against the tide. The new normal is already here. There is no business planning a future without digital.
Jobs will inevitably be lost permanently through digitalisation. Combined with forced business closures due to reduced consumption linked to lockdown measures, unemployment in the formal sector is becoming a pressing global problem.
In South Africa, hundreds of thousands of jobs have disappeared since the beginning of 2020, with community services and manufacturing shedding jobs. More than one out of every three working-age South Africans is unemployed, and the fourth wave of Coronavirus looks set to worsen the picture as vaccination figures stall.
There is, however, one segment in which employment figures have improved during the pandemic: part-time employment. In just the second quarter of 2021, 77 000 South Africans found part-time work.
How should we interpret this trend? The answer is that the formal employment scenario around the world has fundamentally changed. With fewer formal employment opportunities and the rise in unemployment, more South Africans are looking to the gig economy to make a living.
Companies like Uber and Airbnb have demonstrated that employment is everywhere and nowhere at the same time. These companies have quickly gained a global presence without setting up any significant infrastructure or hiring permanent employees. Yet, around the world, individuals are making a living working for them.
During the pandemic, the reach of foreign companies into the South African talent pool has quickly expanded. From graphic designers to food delivery drivers, the digital realm has broken down many of the traditional barriers to finding work. There is now no need to relocate talent – they stay where they are and take on projects or tasks for remuneration, effectively throwing open the door to a global talent pool.
While the gig economy holds the potential to soften South Africa’s transition from physical to a digital economy, there are obvious challenges to distributing the work and income broadly. A digital platform like M4Jam has made the gig economy accessible for millions of South Africans by linking work seekers with organisations that need work done but cannot afford to create permanent positions in their workforce.
M4Jam’s provision of training through the platform, which can operate on a simple feature phone, has created a vital lifeline for work seekers – particularly outside of urban centres – who would otherwise have no way of finding or taking on tasks from businesses.
Registration and usage trends show that it is not only unemployed South Africans who use M4Jam – many who are lucky enough to have formal jobs are still under financial pressure and in search of part-time work to make ends meet.
The gig economy will be indispensable to the world’s economies in the near future. Gig economy platforms will be the means for many of the world’s workers to learn about emerging technologies and gain skills that will increase their ability to make a living in tomorrow’s world. The future will be one of on-call workers who are skilled in a variety of tasks as generalists and are reliant not on sustainable corporate entities but on collaboration, networking and relationship-building.
If this sounds like a far-off concept, consider that the United States and Europe currently have 162 million registered gig workers and South Africa has nearly four million. That is more than half the number of unemployed people in this country.
There are caveats, of course: the educational sector will need to adapt curricula to the changing nature of work and increasing digitalisation. We will need graduates who are skilled in artificial intelligence, big data and the internet of things.
Legislators will also need to protect the rights and benefits of gig workers as the workplace evolves into more distributed models. However, the gig economy’s inexorable rise in South Africa and the world should be embraced. Failing to plan for the future of work will cause more unrest in our country as the formal employment sector shrinks even faster.
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