The future of jobs is in the informal sector
Nations must help workers to learn ondemand skills and create verifiable work histories on techenabled platforms
Hardly a day goes by without another article, conference, or research initiative devoted to the future of work. What if, instead of trying to predict the future, we look at realities that exist today for billions of people?
Some 80% of the global population lives in emerging economies — defined by informal markets and fluid employment structures.
Examining work patterns in these diverse countries yields three lessons. First, people layer multiple work streams and derive income from more than one source. Second, platform economies are emerging rapidly and build on traditional networks. Finally, these work patterns often go hand in hand with dramatic income inequality.
Flexibility and uncertainty define informal markets in developing countries. Those who have formal jobs (less than 40%) often have ‘side hustles’. The same pattern is starting to emerge in developed countries.
A key difference is that in emerging economies flexible networks of individuals take the place of formal employers. A 2017 survey showed that the Jua Kali, Kenya’s informal sector, generated 747,300 jobs the 2016, whereas the formal sector added only 85,600.
As technology has been added, many of the informal groups are going online to match supply and demand. Developed economies are only beginning to catch up. Emerging markets also offer a cautionary tale concerning the downside of the on-demand economy. They have some of the highest levels of inequality in the world.
Informal markets, lack of finance, and poor educational opportunities continue to trap most people in relative poverty. Gig economy platforms that provide small jobs without benefits or career progression supplement income, but they do not provide the security and growth of a formal job.
Nonetheless, informal markets in developing countries provide a vast field for experimentation to transform a patchwork of jobs into a steady upward path for workers. Tailoring education to allow workers to get the on-demand skills, and creating verifiable work histories through blockchain, are two ways to help gig economy workers find suitable opportunities more efficiently.
While developed countries are rapidly aging, emerging economies are predominantly youthful. By 2040, one in four workers worldwide will be African. They are products of dynamic informal markets, and that should ease their absorption into a tech-enabled gig economy. We can learn from them today to prepare for tomorrow.
(For full version, visit: http://read.ht/Bb0e) AnneMarie Slaughter is president and CEO, New America. Aubrey Hruby is senior fellow, Atlantic Council Project Syndicate, 2017 The views expressed are personal