The Rise of Gig Economy

 The Rise of Gig Economy

Imagine a hypothetical situation where you wake up one day and you have five short-term discrete contracts, and you are provided the choice to pick which ones to work on and you earn the money on a piece-work basis. Once you are done, you can take time off and enjoy the time with your family.

The gig economy refers to a free market system where organizations contract with independent workers for a short-term period either a project or service.

The onset of the pandemic had opened us up to a new approach to making a living without having to follow the traditional norms. The lack of certainty for stable jobs directed people to transition into the gig economy out of necessity.

The Coase theorem put forward by the economist, Ronald Coase captures why a company is of the size that it is, this is concerning external transaction costs. The underlying issue of carrying out an activity externally is the legal property rights and not because it is external. However, the evolution of technology has nullified this issue and made employment externally easier. It provides a platform where short-term contracting also known as gig work more convenient.

According to recent surveys, the gig employment generation will transform the economy in the future. Specialists have been altering plans for making this inevitable shift to the gig economy have long-term viability. This includes suggesting the privileges of a fixed-term employee like paid vacations and health insurance and reducing the scope of uncertainty.

The gig economy has tremendous potential in India, equipping people with digital literacy is one way. This includes groups such as daily wage workers, such as plumbers, carpenters, women solely carrying out household work or during maternity leave, and most importantly farmers of India to sustain themselves from irregular harvesting seasons. If properly adopted, it can create around 90 million jobs in India, increasing the GDP by 1.25%(According to Boston Consulting Group - BCG).

Digital platforms have become the center for social activities. Numerous applications and organizations have already been established with this setup. Amazon, Uber, Swiggy, and apps such as Fiverr, Airbnb, Upwork, and Udemy are a few to name.

Workers can reap the benefits of job flexibility, such as choosing what to do, how, when, where and for whom in the confinement of their homes. While employers can reduce the costs and time that would have been required for full-time employment. Gig jobs usually have low entry requirements and hence bringing in a large pool of talents.

Gone are those days when people lived by the conventional model of having one source of income and working 60-80 hours a week. A newly derived system where all workers find independence in their field of work. Where they value creativity and well-bounded employees, making jobs more fulfilling than ever.