In their book, ‘No Ordinary Disruption’, authors Richard Dobbs, James Manyika, and Jonathan Woetzel talk about the changing landscape of our global economy owing to an Industrial Revolution like disruption, only much more powerful. What does this change translate into for the working-class, what does it mean for traditional economies and emerging economies, and what must global leaders do to be ready for this shift?
I believe the answer lies in embracing a new economic order, the Gig Economy.
A gig economy characterizes the market as a piece-meal of short-term contracts of work or ‘Gigs’, as opposed to the traditional view of permanency of labor in the form of day jobs. Gig economies circumvent the effects or make use of each of the authors’ mentioned disruptions.
Emerging markets seem to be the new hubs for global economic activity coupled with the rapid surge in urban population numbers. A Gig economy would deem the authors’ concerns with the shift in the locus points irrelevant by bridging the old with the new. Headquarters have their work largely cut-short by being inclusive of the Gig culture, and there can be a synergistic business environment between the current locus points and the emerging urban centers, creating a more fertile economic environment.
While online platforms are an absolute necessity for the Gig economy to be functional, the flip-side is that the Gig economy can ease the effects of accelerating technological change, and use it to contribute to economic benefits. For instance, if there is a specific vendor specializing in the internet of things, a Gig setup would mean that the vendor can effectively contribute to various clients, instead of the clients having to wrestle with the technology changes themselves.
Major concerns from the authors’ reference to an aging workforce is the decrease in productivity and the invariable GDP loss resulting from it. Firstly, a gig economy can ensure that the younger population can be more productive, and can provide opportunities to the unemployed more easily. Secondly, the aging population can still possibly contribute more to the economy if they are not constrained by the trivialities of having a day job.
With the global economy expanding into a complex web of flows, a more updated view of labor is required. A simple nine-to-five approach just won’t cut it anymore. A Gig economy will provide the necessary means to deal with the new phase of globalization with all its intricacies and volatility. The flow of capital, people and data can be truly used to add advantage if there is value to be added by people who can and are willing to, outside of nine-to-five bounds.
The authors talk about intuition being underpinned in all our decision making, and about the necessity to revamp these intuitions from first principles. I believe the evaluation of the scope and effect of a Gig culture is a very important step in this overhaul to adapt to the new shape of our economy.