There is concern about how these platforms are disrupting traditional work. Some tasks that were met through traditional, full-time employees are being replaced by a more fragmented, on-demand workforce, often due to cost pressures or a need for agility and speed. But equally, these platforms are providing businesses with the talent that they are unable to find through traditional means, especially in job functions where there are major skills gaps, such as IT and digital skills. For example, nearly 12 million freelancing knowledge workers serve 5 million clients, including both start-ups and Fortune 500 firms, through Upwork. For those with the most in-demand skills, the opportunities offered through these platforms can often surpass any potential earnings they could have through more traditional employment.
So is the gig economy good or bad for the future of employment? Like most technologies it is neither inherently good nor bad. Digital work platforms can span a range of both high-skilled, high-paid work and low-skilled, low-paid work. They can be localized or cross borders, not unlike the outsourcing that has occurred between developed and developing economies in the past. They have the potential to create enormous opportunities for the developing and developed world. The data from these platforms can provide the basis for smart regulation and agile safety nets, just as it can be used to sell more services.
Governments will need to take the lead in understanding and regulating new models of work. Responsible platform businesses will need to be a core part of shaping new labour markets and designing a new social contract.