Will digital economy kill jobs?

Oct 21 2013, 08:34 IST
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SummaryThe recent Gartner report about the top ten predictions for IT organisations and users indicates that by the year 2020

With the increase in literacy and education levels, the aspirations of the youth to find suitable employment opportunities will further soar and whether digital economy is capable of creating or killing jobs is a moot question to rise.

Let us take a look at some of the models emerging out of ICT that are aimed at employment creation. The biggest opportunity for employment creation will be around the SMEs. According to McKinsey Global Institute, SMEs tend to create 2.6 jobs for every job displaced. For developing countries this effect is significantly higher, the ratio stands at 3.2. These SMEs are not just those who are connected with the ICT sector but others as well who are consumers of ICT. The opportunities for employment are therefore not only for IT specialists but for others who can support these SMEs with their specialised skills.

Online contracting is one of the emerging avenues of employment that can service these SMEs. It is similar to outsourcing but individuals directly participate in this form of activity. Apart from the large organisations who tap into these services, SMEs would have a need for such talent at low cost with geography and location being no constraint for sourcing. An estimated 2.5 million jobs were advertised in 2012 on sites such as Desk and Elance according to the World Bank publication ‘Connecting to Work’. While initially most of the jobs pertained to IT skills, the report says, as of July 2013, 50% of the jobs are non-technology related in areas requiring creative skills. The interesting aspect of online contracting is the access to global opportunities and the possibility of higher earnings than local alternate employment. While the initial draw for online contracting opportunities came from the mature markets, employers from India now post 9% of the opportunities on Freelancer.com.

The other model of employment is micro work. Micro work breaks up a large activity into multiple tasks and each task is assigned to specialists from around the world which are then finally assembled virtually. Microwork assignment has been popular with areas such as gaming, market research, testing, translation and copy writing. Some micro working sites even provide training and mentoring to those who undertake micro tasks and have created excellent quality control, acceptance and rewarding metrics. Amazon Mechanical Turk(AMT) is a good example of this category which is estimated to have 500,000 micro-workers from around the world with 34% being Indians

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