The gig economy in South Asia

Jobs provide livelihood, and thus, are a source of income that is crucial for economic growth. By providing access to broadband and a digital device, technology has shifted traditional work patterns. It has created new ways in which work is carried out and enabled more people to join the labour force in both developed and developing countries. This new type of work, known as gig work (the term "gig work" was first coined in 1915), has gained momentum. 

Gig economy is a labour market connecting individuals (mostly self-employed) with short-term tasks. There are two types of platform-based gig jobs. The first is location-based (e.g., ride-sharing, home delivery). The second is online gig jobs, carried out and delivered online by workers, like data entry, graphic design or software development. Unlike traditional employment, gig workers are paid per task and do not receive regular salary and benefits. 

The growth of the gig economy is due to a number of factors such as rise of digital platforms and apps, greater flexibility, access to a wider pool of talents, and high unemployment, especially among the educated youth, particularly in developing countries. However, the gig work can also be unpredictable and characterised by unstable income and a lack of, or limited, labour and social protections. Further, achieving self-reliance in the gig economy depends on reliable internet connectivity, and access to upskilling, especially for women, youth, and other disadvantaged groups.  

Notwithstanding there is considerable data gap, the online gig economy is growing. It is quite large and increasing, estimated at between 154 million and 435 million, i.e., around 12 per cent of the global labour force. On the supply side, it supports inclusion by providing job opportunities for youth, women, and the relatively low-skilled workers. On the demand side, it widens the talent pool for Micro, Small and Medium Enterprises (MSMEs). 

The gig economy is experiencing impressive growth globally and across Asia, including in South Asia. Globally, it is projected to reach 1.5 billion workers in 2025. The Asian region is experiencing an increase in gig work. Asia's gig economy encompasses a variety of activities such as IT services, education services, and delivery services. In Asia, including South Asia, the gig economy's contribution to gross domestic product (GDP) is growing. Although the gig economy's overall contribution to GDP is not yet fully quantified, its impact on job creation and income is becoming increasingly significant. 

In South Asia, India and Bangladesh, have substantial number of gig workers-India (around 24 million) and Bangladesh (over 600,000). Due to data constraints, it is not possible to specify how many gig workers are there in the other South Asian countries; however, gig workers are increasingly becoming an important part of the informal economy. 

In Afghanistan, the gig economy is not widely documented; however, there is some information regarding its growing trend, especially those using online platforms in the logistics and media sectors. 

In Bangladesh, the expansion of the gig economy is due to a mix of location-based (e.g. ride-sharing and delivery services) and online remote work (freelancing and other digital tasks). It is experiencing significant growth in terms of job creation and its contribution to GDP. It provides new employment to a large number of informal workers, a sector that accounts for over 80 per cent of the labour force and around 40 per cent of GDP in Bangladesh.

Bhutan is gradually embracing the gig economy. The evolving market dynamics, including the expansion of digital platforms and e-commerce, are creating new job opportunities that differ from traditional employment; and more such job opportunities are likely to be created in the future. 

In India, the gig economy is a growing phenomenon, with a large number of freelance workers, especially in sectors such as ride-sharing, food delivery, and some types of professional services provided by young, tech-savvy workers and increasing demand for flexible working arrangements. India is a fast growing market for freelancers. While the gig economy's contribution to GDP is not available in official documents, the sector's expansion is widely recognized as an important part of India's economic landscape. 

In Nepal, the gig economy gained momentum since 2016, especially in the software and technology sectors that account for a significant proportion of online freelance work. Various digital platforms offer services such as ride sharing, food delivery, and online payments. There are no official data on the total number of persons employed in the gig economy, although some estimates show that over 66,000 persons work in the sector as primary or secondary sources of income. The gig economy contributes around 6 per cent to the GDP.

In Pakistan, the gig economy is experiencing rapid growth, facilitated by the rise of digital platforms, availability of a young, tech-savvy working population, high unemployment especially among the youth, and increasing demand for online services. Pakistan is a leading country in the global freelancing market, connecting gig workers from Pakistan with clients globally. There are no official data on the contribution of the gig economy to Pakistan's GDP, although it is not insignificant. 

In Sri Lanka, the gig economy is experiencing rapid growth,with a significant proportion working through online platforms, toaddress unemployment, offer opportunities for additional income for many who participate in the gig economy, and offer avenues for foreign exchange earnings. While it may not be possible to specify the exact contribution of the gig economy to GDP due to lack of comprehensive data, the gig economy's contribution is not insignificant. 

Despite the fact that the number of gig workers is rising, they face several challenges. These include limited reliable internet connectivity, income instability, limited job security, difficulty accessing loans from banks, and potential exploitation due to lack of legal protection. 

There is need for a multi-pronged approach, encompassing both supply-side and demand-side policies, to address the challenges faced by gig workers. Such an approach should include establishing clear legal frameworks for worker protection, ensuring access to social protection measures and unemployment benefits, and promoting safe working conditions and fair compensation. 

Given the increasing importance of this sector, a key recommendation for the official statistical agencies in South Asian countries would be to collect adequate data on the total number of persons employed in the gig economy and its contribution to GDP. 

Barkat-e-Khuda, PhD is former Professor and Chairman, Department of Economics, University of Dhaka. barkatek@yahoo.com