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9 Gig economy

Temporary jobs are becoming more and more common, full-time work and lifetime careers seem to be a thing of the past. These days, people find jobs and provide many new services online.

Not so long ago, the only people who looked for “gigs” were musicians. For the rest of us, once we outgrew our school dreams of rock stardom, we found “real” jobs that paid us a fixed salary every month, allowed us to take paid holidays and formed the basis for planning a stable future.

Today, more and more of us choose, instead, to make our living working gigs rather than full time. To the optimists, it promises a future of empowered entrepreneurs and boundless innovation. To the naysayers, it portends a dystopian future of disenfranchised workers hunting for their next wedge of piecework.

Today’s digitally enabled gig economy was preceded by marketplaces such as ELance and oDesk, through which computer programmers and designers could make a living competing for short-term work assignments. But the gig economy isn’t just creating a new digital channel for freelance work. It is spawning a host of new economic activity. More than a million “makers” sell jewellery, clothing and accessories through the online marketplace Etsy. The short-term accommodation platforms Airbnb, Love Home Swap and onefinestay collectively have close to a million “hosts”.

A different technological revolution – the digital revolution – is partially responsible for the recent return to peer-to-peer exchange. Most of the new on-demand services rely on a population equipped with computers or GPS-enabled smartphones. Furthermore, the social capital we’ve digitised on Facebook and LinkedIn makes it easier to trust that semi-anonymous peer.

Does this suggest a shift towards a textbook market economy? Granted, Uber, Airbnb, Etsy and TaskRabbit are quite different from organisations such as Apple, BP or Sainsbury’s. Because you aren’t actually renting a space from Airbnb, taking a ride in a car owned by Uber or buying a product made by Etsy. The platform simply connects you with a provider of space, a driver of a vehicle or a seller who runs a virtual shop.

But these platforms are by no means merely the purveyors of Smith’s invisible hand. Rather, the hand they play in facilitating exchange is decidedly visible. Uber, not individual drivers, sets prices. Airbnb trains its hosts to be better providers of hospitality. Etsy facilitates seller community building. All of them provide user-generated feedback systems, creating a high-quality consumer experience. Much like an organisation building a brand might.

Almost anyone with talent can become a part-time hotelier through Airbnb or an artisan retailer on the side through Etsy. Any reasonably competent driver can morph into a provider of commercial transportation by plugging into Uber or BlaBlaCar.

And providers don’t have to commit to full days of work. You can pick up your kids from school (and then switch to being an Uber driver). In the gig economy, the lines between personal and professional become increasingly blurred.

There’s certainly something empowering about being your own boss. With the right mindset, you can achieve a better work-life balance. But there’s also something empowering about a steady pay cheque, fixed work hours and company-provided benefits. It’s harder to plan your life longer term when you don’t know how much money you’re going to be making next year.

On the other hand, starting a new business has generally been an all-or-nothing proposition, requiring a significant appetite for risk. There are benefits to dipping your toes into the entrepreneurial waters by experimenting with a few gigs on the side. Perhaps this lowering of barriers to entrepreneurship will spur innovation across the economy.

Economist Thomas Piketty tells us that the main driver of sustained economic inequality over the past two centuries has been the concentration of wealth-producing “capital” in the hands of a few. This seems less likely if the economy is powered by millions of micro-entrepreneurs who own their businesses, rather than a small number of giant corporations.

But the latest generation of specialised labour platforms also raises the spectre of greater social inequality. We’ve now got apps through which providers will park your car (Luxe), buy and deliver your groceries (Instacart), and get you your drinks (Drizly). There’s a risk we might devolve into a society in which the on-demand many end up serving the privileged few.

In many countries, key slices of the social safety net are tied to full-time employment with a company or the government. Although the broader socioeconomic effects of the gig economy are as yet unclear, it is clear we must rethink the provision of our safety net, decoupling it from salaried jobs and making it more readily available to independent workers.

Copyright Guardian News & Media Ltd 2017

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