The Future of Work in the Digital Economy: Addressing Challenges in the Road Ahead

A freelance videographer checking his e-mail.
Globally, there was a 65% increase in online-based freelance tasks between May 2016 and January 2022. Photo credit: ADB

This article is published in collaboration with the Tech for Good Institute.

Across the world, technology has radically changed the nature of work. The proliferation and advancement of technology has led to the rise of digital labor platforms, which leverage the internet to connect workers with paid tasks. Digital labor or gig platforms have grown more than fivefold in the past decade, from at least 142 in 2010 to over 777 in 2020. These platforms either enable online-based tasks such as design or translation and location-based tasks, such as grocery delivery or ride hailing. Globally, there was a 65% increase in online-based freelance tasks between May 2016 and January 2022, with the trend of such work being commissioned from the global North, and performed by workers in the global South. Location-based digital labor platforms, on the other hand, are a subset of online-to-offline platforms in which the tasks require a physical offline component to complete, and generally connect different user groups within the same general location. This may include a direct task between a passenger and driver, or involve more stakeholders such as a merchant utilizing a delivery rider’s service to complete a purchase from a customer.

The Tony Blair Institute recently published its Freedom Jobs: How Workers Perceive Platform Work and What Governments Should Do About It report, which covers workers’ perceptions of location-based and online digital platform work, covering Jakarta, London, Nairobi, and Singapore.

Platform jobs offer workers a sense of control, better income, and greater flexibility

The report finds that digital labor platforms have brought about substantial positive effects to the user groups. Consumers enjoy a wider variety of choice and greater convenience, and workers benefit from lower barriers to access work opportunities and more flexibility. Indeed, the report found that for most workers, platform work was a positive choice compared with formal employment. Platforms work offers the unique ability to combine control, income, and flexibility, three concepts which frame worker perceptions of “good work.”

The platform workers surveyed found empowerment in the sense of control afforded by platform work, and prize the ability to “pick and choose” particular jobs, to set their own “work rhythm.” In addition to this sense of control, higher earnings (compared with alternatives) were cited as another key reason for preferring this line of work. For these workers, immediate income was more valuable than securing future earnings, for example by investing in upskilling.

Participants in the study also cited the greater flexibility afforded by platform work, such as the freedom to make scheduling choices that would not be available in a traditional job with fixed hours. Flexibility can be particularly pertinent for female workers, who tend to face a greater care burden than their male counterparts. In an International Labour Organisation (ILO) study on online freelance workers in the Philippines, female online freelancers cited the need to take care of young children as a key reason why they chose such work.

Addressing risks and challenges

The paper also recognized that platform work come with certain risks and challenges for workers. The lack of transparency in algorithmic management means that workers are deprived of a good understanding of the processes that affect their pay, allocation of work, and rewards or disciplinary measures. Workers’ incomes are also threatened by discrimination, unexpected costs, and platform errors/technical issues surrounding payment. With limited channels of resource, these issues greatly undermine workers’ sense of control and are commonly seen across geographies.

Governments all over the world are seeking to evolve policy around work and labor as citizens increasingly rely on digital labor platforms as workers or consumers. In Europe, case law is building across jurisdictions, with over 320 judgments and administrative decisions as of August 2022.

Policymakers recognize the need to balance the multiple objectives of encouraging innovation, building thriving economies, and protecting citizens. Spain’s riders’ law, which established a presumption of employee status for delivery riders, for example, has led to several platforms, including Deliveroo, exiting the Spanish market entirely, jeopardizing the income of many platform workers.

Step back to step forward: incorporating various perspectives

A key recommendation of the report is that policymakers need to take a step back to first understand the reasons why people choose to work on digital labor platforms and to take workers’ preferences into account when formulating policies.

Instead of applying existing models of worker rights and concepts of “good work,” the report recommends that governments look at an approach that gives credence to workers’ desire for flexibility and control. To this end, attention on areas such as the right to representation for workers to raise platform errors and review automated decisions on workers’ bans or suspensions are important.

With control as an important factor for platform workers, the ability to determine with whom to work, how much to work and for how long to work will empower workers. The choice of platforms, training and resources to support workers participating in short- or long-term platform work, and skills development for those who seek more traditional, formal modes of employment should all be considered in designing policies.

Ultimately, the definitions of “good work” are changing. Digital labor platforms offer workers greater control, income, and flexibility, but there are significant differences between online and location-based platform work. Governments across the region are working to address the emerging impact of these new forms of work, for which existing policies may not be able to address. This report demonstrated the diversity of workers’ perceptions and preferences. Policymakers should heed these findings when formulating policy programs to harness the benefits of platform work.

Sarah Lim headshot.Sarah Lim 
Research Assistant, Tech for Good Institute

Sarah Lim is a research assistant at the Tech for Good Institute and a candidate in the public policy master's program at the Lee Kuan Yew School of Public Policy. She has a background in law and previously practised as a Singapore-qualified lawyer. Her interest lies at the intersection of tech and social policy.

This article was first published by the Tech for Good Institute on 27 January 2023.

Tech for Good Institute.