The gig economy and what it offers Africa

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BY ANTONY MUTUNGA

For the past half century, a new norm has been gaining momentum transforming the employment sector through a shift from stable employment towards self-employment that is a bit more flexible. This shift has been on a rise as more and more people take up part time jobs and freelancing as a way of making ends meets, giving birth to what has come to be known as the gig economy.

A freelance writer who occasionally does articles for a publication, a part time professor and a contracted web designer all have one thing in common, they are part of the growing gig economy. The gig economy is where temporary and flexible jobs are the norm as compared to full time jobs. In this type of economy, employers are more inclined to hire freelancers and independent contractors than to go for those who are into full time employment.

The gig economy has been on the rise over the years with more and more organizations all over the world increasing the use of contingent workers. According to EY Global Contingent Workforce Study, 50% of the 214 organizations surveyed have seen an increase in the number of contingent workers in the last five years. This goes to show how temporary and flexible jobs are becoming the new norm in the corporate scene leading to the growth of the gig economy.

Despite the fact that the gig economy is just starting to gain momentum all over the world, the concept has been around for years as it was recorded long before industrialization in the 19th century. Records show that during the late 18th century people used to work multiple jobs in order to make a living. Just like now, people back then would do part time jobs with the intention of earning more and providing for their families.

However, there is a big difference between the concepts of then and now. Now, the gig economy has been able to flourish and grow thanks to technological services such as the Internet and communication tools. With the advancement of technology and communication over the years, people have been able to connect with each other over social media despite the geographical distance. This advancement has been very advantageous in the corporate scene as organizations are now able to outsource their different projects to people in different countries and still be able to supervise and collaborate for positive results.

Being in a digital era, the technological advancement has also changed the way people view the workplace. With a majority of the group entering the workforce being millennials (generation Y) and part of the generation Z, who have grown up with the Internet, the traditional office job has become a thing of the past. Now the new generation of employees is seeking the type of employment where they are able to set their own terms. An example would be through technological on-demand companies such as Uber and Taxify where one is able to use their car as a cab part-time and in sense they would be the ones in charge.

This has seen the gig economy of today separated into three components; the consumers who are those who need a specific service, the independent workers who are doing and being paid for the service and the companies which connect the consumer to the worker including the app-based technology platforms such as Uber. In fact, according to John Otech, a commerce lecturer, the gig economy is not new, people have always worked gigs but today when most people refer to the gig economy, they’re specifically talking about new technology-enabled kinds of work.

Even though the gig economy is just at the beginning stage in Africa, it is already becoming quite popular as African investors and entrepreneurs prefer on demand services to more traditional ‘9 to 5’jobs. This can be accredited to the fact a majority of people living in the African continent are in self employment as formal employment is only available to a few. According to Haroon Bhorat, Professor of Economics at the University of Cape Town, approximately 74% of the sub-Saharan Africa’s labour force is self-employed, as opposed to being engaged in wage employment.

This has been as a result of the growing population in the continent whereby more and more people are entering the workforce everyday but there are not enough job opportunities in the formal sector to cater for all. For instance, the 2016 Jobs for Youth in Africa Report by the African Development Bank (AfDB) highlights that there are nearly 420 million youth in Africa that currently unemployed. In fact this situation is about to get worse as according to the International Labour Organization (ILO) the number of youth facing unemployment in the continent is expected to reach 830 million by 2050.

With limited resources, African governments have made significant efforts to produce enough job opportunities however; it is evident that they fall short to produce enough opportunities for the growing population. This in addition to technological advancement in the continent has caused the rise in the gig economy as more start-ups in the continent have fully embraced the digital workspace and use it in their operations.

According to Gabriella Mulligan, the co-founder of Disrupt Africa, despite Africa having an unemployment crisis, the answer to solving this problem can be found in tech space. 

“Africa faces significant unemployment issues, with 16 of the world’s 30 highest unemployment levels belonging to African countries. In its tech space, however, the answers could be found. Start-ups are coming up with increasingly innovative ways of connecting all kinds of professionals with work, and investors are seeing the potential,” she said.

Even though the concept of the gig economy has brought about a welcomed change in the African continent, it has also faced criticism. For instance, those involved in the concept have been accused of not providing stable incomes and social securities to their workers. As a result of being on contract or a part time job, most of the people working with gig-based companies usually make low incomes as compared to those in full time employments. Additionally, those working gigs usually have no security as once they are done with a job there is no assurance they will get the same job next time.

Apart from a lack of security and stable income, a majority of gig workers are also limited as they lack training and skill development opportunities. Unlike full time employees who are usually trained and are assisted in skill development, workers in the gig concept are their own managers thus they usually have to train themselves and develop their skills on their own. As such, most gig workers only have limited skills and they have to make do with them unless they earn enough to train more and develop their skills further.

The gig economy has already provided employment to a number of people in Africa and the globe as a whole however; the concept is far from ideal. So far most gig workers are earning less and lack the security that they will find better jobs in the long run. This creates the need for gig-based companies to offer better services and embrace their responsibilities to the workers. It is not possible to give gig workers all the benefits that full time employees usually enjoy but it is possible to offer perks such as training and better income that would motivate the workers and encourage more to take up the gigs.

This concept is an answer to the growing workforce in the African economy however; it will only be successful if it is fair to all the three major components. The gig economy is transforming Africa and the world for the better; it is reducing the unemployment crisis that has been a thorn around the globe.