Impacts of Global Digital Labour Platforms and the Gig Economy on Worker Livelihoods

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* Article: Digital labour and development: impacts of global digital labour platforms and the gig economy on worker livelihoods. By Mark Graham, Isis Hjorth, Vili Lehdonvirta. Transfer: European Review of Labour and Research, 2017



"As ever more policy-makers, governments and organisations turn to the gig economy and digital labour as an economic development strategy to bring jobs to places that need them, it becomes important to understand better how this might influence the livelihoods of workers. Drawing on a multi-year study with digital workers in Sub-Saharan Africa and South-east Asia, this article highlights four key concerns for workers: bargaining power, economic inclusion, intermediated value chains, and upgrading. The article shows that although there are important and tangible benefits for a range of workers, there are also a range of risks and costs that unduly affect the livelihoods of digital workers. Building on those concerns, it then concludes with a reflection on four broad strategies – certification schemes, organising digital workers, regulatory strategies and democratic control of online labour platforms – that could be employed to improve conditions and livelihoods for digital workers."


Digital Labor

By Mark Graham, Isis Hjorth, Vili Lehdonvirta:

"The rise of digital labour has come about at a confluence of two trends. First, in much of the world, un- and under-employment is a major social and economic concern for policy-makers, for people with jobs, and for people looking for jobs (ILO, 2015). The International Labour Organisation (2014) estimates that between 2014 and 2019 there will be 213 million new labour market entrants.

Secondly, much of the world is increasingly characterised by rapidly changing connectivity. We have gone from a world, only 10 years ago, where less than 15 per cent of humanity was connected to the Internet, to one today where over 40 per cent of the world’s population is connected. There are now over three billion connected people on the planet. Furthermore, 10 years ago, less than 8 per cent of people in low-income countries were connected. Today, the figure is over a third (ITU, 2016).

In response to this confluence of a need for more jobs in places where they do not currently exist, and the spreading of digital connectivity across billions of the world’s population, millions of people have turned to outsourced digitally mediated work as a way to transcend some of the constraints of their local labour markets. The first wave of outsourcing, three decades ago, originally moved work to lower-wage areas within national economies (Bain and Taylor, 2008), but by the early 1990s the spread of digital connectivity made it possible for destinations like India and the Philippines to capture large amounts of outsourced work (Bryson, 2007; Dicken, 2015; Lambregts et al., 2016).

In the nascent days of business process outsourcing (BPO) there were very few locations that could offer a sufficient amount of connectivity to support transnational workflows (UNCTAD, 2009), but as ever more people in low-income countries connect to the Internet, another fundamentally different type of outsourcing has emerged: digital labour platforms1 in which clients post jobs and workers bid on them. In contrast to BPO work, digital labour platforms represent a fundamentally new model because they allow business processes to be outsourced without the mediation of formal BPO organisations (and their associated overheads). Work is turned into a commodity in which workers are transformed into a ‘computation service’ (Irani, 2015). In this context, workers can transcend some of the constraints of their local labour markets, and tasks such as translations, transcriptions, lead generation, marketing, and personal assistance can now all, in theory, be done by workers from anywhere for clients based anywhere. Much has been said about the ways that technologies of globalisation have widened the global reach of capital at the cost of place-bound labour (see Herod, 2001; Peck, 2002; Swyngedouw, 1997). But the rise of digital work perhaps means that not just capital, but also labour can compete in a global market. Chew Kuek et al. (2015) estimate that the market for digital work was US$4.4bn in 2016, and that it is growing rapidly. An index measuring the utilisation of digital labour platforms suggests that their use is growing globally at a rate equivalent to 25 per cent a year (Kässi and Lehdonvirta, 2016).

Yet there are some preliminary indications that not everyone can compete equally in digital platforms. Beerepoot and Lambregts (2014), for instance, have argued that non-Western workers could be poorly rewarded on such sites. While the empirical evidence about the livelihood effects of digital work are still thin on the ground (a notable exception is Scholz, 2013), there is already a rich body of work pointing to challenges associated with the growth of precarious work more broadly in the wider economy (Kalleberg, 2009; Neff, 2012).

However, many governments, third-sector organisations, and private sector actors continue to see a significant developmental potential in digital labour: jobs can be created for some of the world’s poorest by taking advantage of connectivity and the willingness of an increasing number of firms to outsource business processes. Examples include the Rockefeller Foundation’s 7-year Digital Jobs Africa initiative and the Malaysian government’s Digital Malaysia strategy. In Malaysia, the idea of pursuing digital jobs manifested as a key policy priority with the 2012 launch of the strategic programme ‘Digital Malaysia’, described as ‘the nation’s vision to forge ahead in embracing the global digital revolution […] that will propel the nation into high-income status with digital technology as its critical enabler’ (Digital Malaysia, 2013: 58).2 One of the five pillars of ‘Digital Malaysia’ is the programme ‘Microsourcing for the B40s’ intended to enable the bottom 40 per cent income earners to leverage microwork and online freelancing for sustaining a living. The official target is to enable 340,000 microworkers to generate a contribution to the Malaysian economy of MYR 2.23bn (about US$0.5bn) yearly by 2020.

Similarly, Nigeria’s Ministry of Communications Technology launched the initiative ‘Microwork for Job Creation – Naijacloud’ in the spring of 2013. The explicit aim was to ‘reduce unemployment and create wealth through Microwork and Elancing’.3 Backed by the World Bank and the Rockefeller Foundation, the government arranged workshops introducing thousands of individuals to five of the major global online platforms and microwork intermediaries: Samasource, CrowdFlower, Mobile Works, oDesk and Elance. These and other large-scale interventions demonstrate the high hopes that many have for digital labour in the contexts of development. Underpinning them all is an idea that, in a global market for labour, the actual locations of workers are irrelevant. Anyone can, in theory, do any work from anywhere. An idea that, if true, could bring significant economic benefits to workers in parts of the world where good jobs are hard to come by." (