The gig economy in India has the potential to service up to 90 million jobs in the non-farm economy alone, transact over $250 billion in volume of work, and contribute around 1.25% to the country’s GDP in the long term, according to a new report by Boston Consulting Group and Michael & Susan Dell Foundation.
The four largest industry sectors – construction, manufacturing, retail, and transportation and logistics could account for over 70 million of the potentially ‘gigable’ jobs.
The potential of the gig economy was determined using in-depth primary interviews with corporations, including large corporations and Medium, Small, and Micro Enterprises (MSMEs), a survey of over 600 urban households, and inputs from industry experts.
Comprising both existing jobs that migrate to gig platforms, as well as new jobs that are created in the economy, the report says that net new jobs will result from better market transparency (ability to match demand-supply), greater efficiencies in delivery (lower cost), and growing demand.
In the near-medium term, almost 24 million jobs could potentially migrate to technology-based gig platforms, including nearly 3 million jobs in shared services and over 8 million jobs servicing household demand.
"The potential and need for gig-based employment is so relevant that the gig economy could create approximately one million net new jobs over the next two to three years by aligning near-term incentives of employers and workers. In the long term, the full potential of the gig economy (i.e. up to 90 million jobs), will require evolution in industry hiring practices and growing familiarity with and optimisation of gig-based services,” the report notes.
Moreover, gig workers prioritise the potential for higher earnings and flexible timings in their choice of work, and more than one in four gig workers take up gig jobs primarily to fund additional household expenses (beyond regular expenses) such as medical emergencies, household events, and paying-off leases, the findings indicate.
“It is vital to note that gig workers are not a homogenous group, but fall into one of eight distinct segments, depending on their skill level, life stage, and contribution to household income. Understanding the specific segment of workers, their drivers, and their motivations is critical to tailoring compelling value propositions that can attract and retain workers on gig platforms,” the report notes.
Despite the disruptions from COVID-19 induced lockdowns, workers have a positive perception and outlook towards gig work with around 40% of skilled workers and 32% of non-graduates indicating their willingness to take up gig jobs in the future. However, while gig work remains broadly attractive to workers, specific pain points remain unaddressed, says the report, adding that these are typically related to work assurance, timely payments, learning and personality development, and regular salary increments.
Across industry sectors, the requirements from employers were the need for good credentials (work history and references) and commitment to task completion (output quality and reliability of work products). In addition, employers also point to the need for transparency and safety, the ability to be on-demand, and the option to ensure repeatability of a specific worker for tasks spanning longer periods of time.
“Bringing together an ecosystem of platforms, services, public goods, and public policy can unlock the gig economy at scale, contribute to India’s growth, and create jobs and livelihood pathways for millions of low-income workers across the country,” the report notes.