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The Gig Economy and the Third World

The Gig Economy and the Third World
Will the gig economy boost or destroy the economies of developing countries? Will governments introduce taxes on corporations that hire workers in the Third World through the internet? And does the gig economy make a farce of the idea of protecting western countries from the effect of economic migrants?

Professor Helena Barnard, who is the Director of Research at The University of Pretoria’s Gordon Institute of Business Science, and is one of the authors of a recent report compiled by the Oxford Internet Institution called: ‘The Risks and Rewards of Online Gig Work at The Global Margins,’ participates in this week’s program. Also joining the program is Jonathan Davis, an economist and wealth adviser based in London.

Professor Barnard says that the gig economy is already very widespread throughout the third world, however an education system that provides skilled workers who speak English is necessary and thus a country like Thailand has more gig workers’ percentage-wise than Mozambique. There also needs to be good internet connections, which are by no means prevalent in all developing countries. Infrastructure necessary to provide these facilities costs money, but, as it becomes clear in the program, the gig economy will not necessarily make this possible.

According to Professor Barnard, there are many kinds of sites involved in this sort of work. They can be reduced down to two main types: those where the price is fixed, where the system itself may act as to somehow set standards and those sites which allow the supplier and buyer to negotiate directly. Jonathan Davis expresses the opinion that sites should not be moderated by a third party, and that this is the advantage of the gig economy. Suppliers in the West, Jonathan says, have very high costs, because of central bank and government policies. So if other people can provide the same services at a lower bottom line, than that is a good thing. “Then businesses prosper and grow. We can of course recruit and employ people locally but the fact is, they cost X. If we can find the same X with quality service for a half of the price, a quarter of the price, a tenth of the price, we’d be absolutely mad not to take advantage of it.”

For Jonathan, the gig economy is a really good thing. “This is the first time that someone has had the opportunity to make money from someone 1,000 or 10,000 miles away. This is fantastic! It has been going only 5 years, Google is only 10 years old, but it’s one of the most valuable companies on the planet. These things take a bit of time, I get the point that there are potentially hundreds of people trying to get the same job, well partly that’s because the buyers aren’t used to this yet. …What I am worried about is that people will start to regulate it and kill it.” Jonathan suggests that we should sit back and let the market regulate itself.

The problem with the market regulating itself, Professor Barnard says is that through the history of innovation, we do not always understand fully the ‘dark side’ of the innovation concerned. One of these dark sides could be the implications on the economies of the rich countries. It “could on the one hand be a wakeup call for action, or it could entrench attitudes and create a kind of inertia.” We need, Professor Barnard says to: “look at what kind of regulation we would like to see… in the end to bring more good than bad.” Jonathan insists, however, that the market will regulate itself, and that the suppliers will learn how to market themselves if they are “let to get on with it.”

The final topic discussed is whether or not the online gig economy makes a farce of governments’ attempts to stop migration because of economic migration, which is only one of the many areas that will be affected by the new, burgeoning gig economy.

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