Gig economy poised to take off

THE Philippine Digital Workforce Competitiveness Bill is now a law! The Digital Workforce Competitiveness Act or Republic Act No. 11927 lapsed into law last July 30. This enables the establishment of the Inter-Agency Council for Development and Competitiveness of Philippine Digital Workforce that will lead the promotion, development, and enhancement of the competitiveness of Filipinos in digital technology and innovations.

The new law also authorizes the government to enter public-private partnerships with industry experts, IT-BPO associations, private companies, and other stakeholders to plan and implement training, skills development, and certification programs for digital careers. It also mandates local government units to formulate local policies that support and promote the growth and development of digital technology as well as digital careers and innovations in their respective communities.

This law augurs well with the already accelerating growth of the gig economy in the Philippines. Before the pandemic in 2019, the Philippines was already the fifth-largest supplier of online labor in the world, behind India, Bangladesh, Pakistan, and the US, according to the Oxford Internet Institute. Those in the creative and multimedia segment make up the largest group, comprising 37.4% of online Filipino workers, further to the study. The other types of work categories are clerical and data entry, professional services, sales and marketing support, software development and technology, and writing and translation, which are all digital technology enabled.

What is exactly the gig economy? In the seminal book The Gig Economy: A Critical Introduction published in 2020, authors Jamie Woodcock and Mark Graham defines the gig economy as referring to labor markets that are characterized by independent contracting that happens through, via, and on digital platforms. This includes online freelancing work, delivery work, taxi work, and microwork — all enabled by digital technology.

One obvious driver of the gig economy was the pandemic. In 2020 at the height of COVID-19, organizations shifted to digital as commerce, work, and school were conducted remotely. As of February 2022, the internet speed improved by 105.5% (18.68 Mbps) and 115.9% (46.44 Mbps) for mobile internet and fixed broadband, respectively, according to the latest We Are Social report.

But the effect of the pandemic was closure and slowdown of businesses, resulting in the rise of unemployment as well as under employment in the country. In October 2020, the Philippine Statistics Authority reported that of the 43.65 million economically active population 15 years old and over, 3.81 million were unemployed, which placed the country’s unemployment rate to 8.7%. Underemployment, on the other hand, was registered at 14.4% of the total employed persons or 5.75 million Filipinos.

This is complemented by the young labor force in the country, with a median age of 26 years, that desire flexibility and increased pay. Millennials and Gen Z workers want to work from home or part-time to enjoy traveling anytime, or simply just to stay with family. Gig economy workers can work at their own pace, their own time and in their preferred locations.

All these bode well for the future of the gig economy in the Philippines, considering the country’s two core competencies that cannot be replicated by any country: its people’s natural creativity and natural hospitality. In my previous articles, I argued that because of these two factors, our country has been the top exporter of either workers for overseas jobs or talents for business process outsourcing, or jobs where the Filipino’s creative talents stand out — photo editing, writing, artwork, etc. and customer service — and for call center and virtual assistant work.

The gig economy is poised to take off and will just be bigger in the future. Our government, human resource practitioners, and labor groups will have to evaluate and assess their role in hastening this growth.

Reynaldo C. Lugtu, Jr. is the founder and CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be e-mailed at rey.lugtu@hungryworkhorse.com