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The E-workers

Maya Brahmam's picture

The Economist recently wrote about the "workforce in the cloud" and how the global mobile workforce is being tapped by online talent marketplaces like Elance.com and oDesk.com. This has allowed professionals worldwide to compete globally for work and has saved businesses money. Last year, the value for this online work topped $1 billion for the first time and is expected to reach $5 billion by 2018.

These exchanges are providing opportunities to build businesses without borders. The Guardian reported that a start-up firm, Boutique London Lets, which rents luxury apartments to international business travelers and tourists, has tripled turnover every year for the last three years. The firm used online talent marketplaces to help with recruitment, was able to expand to separate London and Manila offices, and used the “workforce in the cloud” to handle their communications. The owner can keep control of the business while traveling and visiting prospects and staff.  The company also uses e-mail, video conferences, online groups, and instant messenger to train staff and is exploring how to create an internal social media network for sharing informal staff interactions.

And this online work can be used to tackle poverty by giving disadvantaged young people a chance to improve their circumstances. Michael Chertoff, founder of Digital Divide Data (DDD), notes in a recent article in the Huffington Post, “While some make the case that outsourcing is just another industry chasing lower wage rates, I've seen something different… DDD pioneered … Impact Sourcing. Impact Sourcing looks beyond the common source of supply for traditional outsourcing to provide higher-income employment, skill development, and access to… individuals who might not otherwise be employed in this sector.” He goes on to say, “In countries including India, the Philippines and the U.S.A., social entrepreneurs are bringing this model to small towns and villages in rural and remote areas to create employment and opportunity.”

What does this mean for the world of work? Answer is that it’s going to be online. Some interesting statistics are shared in this post by Jessica Stillman on GigaOM:

  • By 2020, one in three people will be hired online and will have an online working relationship with their employer.
  • Half of businesses will have on-line teams by 2020 – “workforce in the cloud” is a trend that’s growing.
  • Global professional guilds will emerge online to represent this global workforce.

Image courtesy of Kittisak/Freedigitalphotos.net
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Comments

Submitted by Ralph on

Dear Maya, I fully agree with online work will continue to grow, especially if we take into account the number of professionals without a job in many developed and developing countries. However those models still need to prove that they meet international regulations and standards that apply to international labor outsourcing.

There are huge concerns about major ethical and legal issues that still need to be addressed by the companies behind the sites that you've just mentioned. There is for instance growing debate about exploitation and tax evasion issues across borders, as large amounts of money are being transferred withou any control, and both brokers and "employers" obtain profit from informality. Individual money transfers are relatively small for government authorities to bother so many freelancers believe that tax evasion is fair game on the Internet. Other major concerns include obscure revenue collection and financing, loss of social security proceeds and violation of intellectual property rights.

There is a lot of potential for online work to accelerate globalization of labor markets, however it is still a long way to go before serious businesses and institutions can tap into it on clear and legal grounds.

Submitted by Anonymous on

Good points. But don't regulations always follow reality -- and slowly? In the online world, policies have to move faster to catch up. WIEGO's site has a good discussion of the whole question of "informal economy" http://wiego.org/informal-economy/history-debates: It suggests a holistic approach to the informal economy which takes into account all aspects of informality and all categories of informal workers. In particular, it cites a 2007 publication called Informality: Exit and Exclusion, a team of authors from the Latin American Division of the World Bank, which proposed a holistic model of the composition and causes of informality.

Submitted by Ralph on

Dear Anonymous, in an ideal world regulations should be able to let markets evolve towards desired outcomes but that's always been a dream. Letting informality run its natural course is not necessarily in the best interest of the majority. And you must be aware of powerful interests behind informality, in particular huge corporations and job market intermediaries whose main drivers are bottom lines and profit margins, at the expense of workers rights if need be.

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