India's gig economy holds a potential of 90 million jobs, says BCG
Covid-19 has paved the way for a vibrant gig economy in India – home to potential employment for nearly 90 million people according to a new Boston Consulting Group study in collaboration with the Michael & Susan Dell Foundation.
A gig is a one-off task, performed on demand without a (long-term) contract. Segments of India’s economy have been operating like this for centuries, albeit with an informal structure. Technology was already formalising the segment before the pandemic, which could accelerate the rate of change.
“With technology bringing many services to our mobile devices and fingertips, ‘gig platforms’ are meeting existing and new demand, while creating millions of jobs in the areas where they operate,” noted Boston Consulting Group managing director and tech, media and telecom partner Vikash Jain – alluding to platforms such as Uber and Swiggy.
Covid-19 released millions into the job market, while the forced transition to remote working has brought flexible work models and online platforms well into the mainstream – setting the stage for an already thriving gig economy.
With this as a backdrop, BCG and the Michael & Susan Dell Foundation put the potential of this segment into numbers. India’s gig economy holds 90 million job opportunities – if informal, on-demand activity were brought online. Combined, this could deliver a 1% plus boost to the GDP in the long term.
The epicentre is a rapidly expanding construction and real estate sector, where the high demand for unskilled physical labour holds nearly 40 million “potentially gigable” jobs – nearly half of the total employment potential. Another 21% lies in the transportation and logistics industry, although jobs here require a higher skill level.
Other high-impact sectors include manufacturing and personal services – the latter benefitting from India’s age-old culture of employing household staff. Beyond this, gigable jobs exist across retail, financial services, healthcare, education, IT, media and hospitality, among others. According to Jain, tapping this potential could add value for workers and the economy alike.
“Delivering these jobs as ‘gigs’ via technology platforms will contribute to better demand-supply discovery, price transparency, productivity improvement, compliance with worker benefits and protection, and effective public policy design.”
So there are myriad advantages to tap into: the problem is that India’s gig market remains immature. “There are still a set of prerequisites, structural changes in industry sectors, and behavioral changes among gig workers and employers that need to be in place, before the full potential of the gig economy can be realized,” noted Seema Bansal, BCG partner and director of its social impact practice.
Experts report the need for safety and quality assurance mechanisms, pricing structures, availability and skill development to help businesses employ on a gig basis. For workers, challenges include low income, uncertainty and tardiness in payments, lack of benefits, increments and perks, long hours and high levels of stress and expectation.
As a result, despite the rise in unemployment following Covid-19 and the myriad advantages working on-demand, the number of people that would take up gig work has remained largely unchanged since before the pandemic. Per the report, addressing some of the segment’s inherent flaws can help drive a speedier economic recovery from the crisis.
