According to ILO’s Flagship Report (2021) on the platform sector, there has been a 10-fold increase in the number digital labour platforms over the last decade in the world, with India accounting for 8% of the world’s labour market platforms. This proliferation of digital labour market platforms, including gig work, took-off sharply during the COVID-19 pandemic. It provides an opportunity to harness and scale-up technology to improve employment opportunities in India, particularly in the blue-collar sector, but also improve women’s labour force participation by lowering job search costs and providing opportunities for more flexible work.
As discussed in a recent report on the platform market, the potential of this sector for India is high, given its domination by relatively younger workers (below 35 years) and jobs that are responding to the structural shift away from agriculture towards services (for example, delivery, beauty and wellness, BPO, customer care), particularly in India’s burgeoning cities. India represents an ideal ground for increasing the presence of digital labour: it has amongst the youngest populations in the world (68% of population is in the 15-64 category and 25% are less than 15 years of age, with the demographic dividend expected to peak in 2041); we see rapid growth in smartphone usage (projected to reach one billion users by 2026); and increasing urbanisation (India’s urban population is estimated to stand at 675 million in 2035, the second highest behind China’s one billion).
The nature of these digital platforms is varied – from those that purely match job seekers with employers for short- or long-term work contracts, to self-employment and gig work on the platform itself. The former ease job search across regions or locally (or hyper-locally, in the case of Apna and Qjobs), while the latter provide employment including delivery and transport (for example, Uber, Urban Company). This technology can, therefore, potentially meet the diverse needs of different demographic groups of workers, in terms of location, flexibility and hours of work.
In order to take full advantage of the potential of this technology, there are several challenges that need to be addressed, overall and specifically to ensure that women do not lose out on benefitting from this technological change.
First, access to technology (in this case, smartphone ownership) is not only woefully gender imbalanced, but in India, women’s physical mobility is also low. Women apply for much fewer job/occupation types on digital platforms relative to men, indicating the lack of a wider range of skills. They are also willing to travel shorter distances for work than men. Previous work led by the Indian Statistical Institute (ISI) (Delhi) in urban Delhi shows that providing information on job platforms and facilitating the registration process through engagement with workers’ social networks, can help increase earnings and provide more secure work opportunities for men in poor households. It also benefits low-skilled women, who often prefer home-based work or self-employment. However, platform exposure alone may not improve women’s wage employment significantly unless they can move around freely.
Second, skills and capital are often in short supply – particularly among women, preventing the maximisation of gains from self-employment and gig work through platforms. Besides making workers aware of the work opportunities in the platform sector, there is a need to provide them with skill training that align with the nature of work on platforms. In addition, access to capital through loans (for example, purchasing a vehicle required for some types of platform and gig work, such as providing door-to-door beauty services) is often limited.
Third, information asymmetry between the demand and supply ends of the labour market is a central concern with platforms. For instance, employers rely on the platform to verify the skill level of workers, while workers often do not carry skill certification.
Finally, public infrastructure (such as public toilets, street lighting and road safety) is woefully inadequate, especially in Tier 1 and 2 cities, to meet the needs of an agile workforce – workers’ physical mobility is key to gig work, which tends to be location based. Addressing this is especially important to improve women’s mobility so that they can engage in the sector.
Finding solutions: How data can help
Many platforms are embedding skilling and certification within the platform itself, including soft and hard skills. Further, there has been an ongoing government initiative of matching skill trainees with potential employers through job matching and other labour platforms. But we know very little, if anything at all, about the impact of skill training on employment outcomes. Have these programmes been successful in providing employment? Which platforms have been more or less successful, and which occupation/sectors have seen more demand for skilled trainees? The Ministries of Labour and Employment, and Skill Development and Entrepreneurship, along with the National Skill Development Corporation have a wealth of administrative data on the above, which can be harnessed to understand how digital platforms linked to skilling affect employment and earnings. These data may also allow us to evaluate the potential benefits of a standardised skill certification and worker verification system that includes portability of certification.
Further, the platforms maintain individual-level data on participants and employers, which is key to understanding who takes up these programmes, what skills are chosen by participants who enrol themselves for training, who gets placed, what is the uptake of jobs offered, and demand mapping. There is a dearth of end-to-end data on this sector – often platforms (particularly matching platforms) do not track individuals all the way up to the point of obtaining a job. Further, accessing and analysing data from digital labour markets and platforms to understand how work and skilling preferences align with labour demand is imperative.
The analysis of administrative data from skill centres, combined with platform data and information on work preferences, will also provide insights into the possible gender gaps in the skilling ecosystem, and potential policy measures required to plug these gaps. In addition, embedding survey questions on participation in the platform sector within the Periodic Labour Force Survey will provide comprehensive, nationally representative data to measure the growth of this sector and assess prospects.
Creating an ecosystem that addresses issues ranging from information asymmetries to skill certification and gaps in public infrastructure, using both public data and those available from the platforms, is critical to tap the full potential of this sector, both overall and from a gender lens. The upcoming ‘Digital Labor and Women’s Economic Empowerment’ program at IFMR-LEAD and ISI (Delhi) aims to inform these issues on the future of work in India.
Farzana Afridi is a Professor at ISI Delhi and the latest recipient of the Mahalanobis medal awarded by the Indian Econometric Society.
This article was published in collaboration with Ideas for India.