Cheta Nwanze, Lead Partner, SBM Intelligence
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Subjects of Interest
- Fiscal Policy
- Geopolitical Analysis
The emerging gig economy in Nigeria 12 Jul 2017
The proliferation of the Internet and technology all over the world has had a great impact on the modern workforce, giving rise to the gig economy. The way people work and the productivity of the workforce have always been contingent upon the technologies available and the degree of collaboration required to work.
Evolution of work
In hunter-gatherer societies, work didn't require great specialisation and consisted of simply gathering what was available. Research shows that most hunter-gatherers worked for between three to five hours daily, and such work was confined to their territories. When the Agricultural Revolution took off, the structure of work changed. Most people worked from dusk to dawn every day, except on their sacred days (Friday, Sabbath, or Sunday, depending on one's religion).
With the advent of the First Industrial Revolution, work was mechanised, specialised and centralised. People had to leave home daily to work for public or private employers for fixed hours.
Prior to introduction of the standardized timing for work set by the government, people simply got up when the cock crowed to work and stopped working when the sun began to go down. But with industrialisation, people changed the way they worked and adapted to the pattern most of us are familiar with today.
There's a new revolution going on today of which we are slap-bang in the middle. It is the information technology revolution that has led to computerisation and the interconnectivity of things. This has opened up new possibilities for how we work. It is this new revolution that has spawned a whole new social phenomenon – called the gig economy.
Also known by other terms – such as the sharing economy; the on-demand, peer, or platform economy – the gig economy refers to the situation where people take jobs, mostly short-term, and execute and deliver over the Internet. In the gig economy, temporary positions are commonplace and organisations contract independent workers for short-term engagements.
It is not unusual to find a software project, for example, having programmers from Belarus, designers from Kenya and project managers from the United States, all working remotely. As an example – WriteRack is a Nigerian project, with Indian programmers, and some staff living in San Francisco, US.
The gig economy is already recasting the shape of advanced economies. The number of gig or on-demand workers in the United States is expected to nearly double in the next four years. That means 9.2 million Americans are expected to work in the gig economy by 2021, up from 3.8 million last year, according to combined research by Intuit and Emergent Research. The new face of work has been underpinned by the rise of start-ups like Uber and Airbnb – mammoth, colossal money-spinners that unashamedly advertise themselves as the future of work. A McKinsey Global Institute survey found that up to 162 million people in Europe and the United States – or 20 to 30 percent of the working-age population – engage in some form of independent work.
Nigeria is not an exception to the gig economy. Increasingly, many people, particularly the young, partake in it. The jobs that are mostly associated with this economy are those in ICT, design, writing, etc. They are often jobs individuals take on outside their traditional 9-5 jobs.
There are a few advantages to this reorganisation of global employment. For one, it has allowed people to build alternative income streams by maximising their earning potentials. In theory, people are increasingly able to use their free time on projects they otherwise would not be able to work on because of location and time constraints.
The system has also enabled people to build incomes from careers other than the ones they are employed in. Oftentimes, the extra incomes are from hobbies. For example, a lawyer is able to double as an online columnist and contributor for news sites through the Internet.
Lastly, the gig economy has allowed companies and organisations to get the best talent they can afford for projects without having to fully employ them, thus saving them money. Smooth FM, a top radio station here in Lagos, as an example, has two regular hosts, Rotus Odirri and Tega Onojaife, who are not members of staff, but essentially run the station's business and sports desks, respectively.
This ability to 'career-task' and juggle several job roles almost simultaneously, has quickly turned into one of the distinctive markers between millennials and the generations before them, where the latter could only work on one job at any given time, as any other job required their physical presence.
But what are the challenges that this new and growing system faces in a country like Nigeria?
The workplace has always been perceived as both a seat of personal and, in some cases, national identity. It has also been a site of exploitation, upheaval and shame. The industry that underpinned the rise of modern societies in Western Europe and North America in the nineteenth century was often inhumane and flat-out deadly. The twentieth-century palliative – a corporate workplace of rules, hierarchies, collective bargaining, triplicate forms and HR – brought its own unfairnesses.
These labour issues have not been sorted out in Nigeria. As of today, Nigeria is still an employer's market. While gigging further reflects the perpetual optimism of contemporary times, the opportunity cost of taking back ownership and control of one's time and destiny – and its attendant social effects – remain uncertain.
Gigging has also been attacked for not guaranteeing the legal rights of the workers who, in many cases, are less eager participants in the system than some of its fervent advocates would want people to think. Thus, the sharing economy's most ardent beneficiaries, the technology start-ups that require a steady supply of cheap labour, have rather infamously clamoured for their workers to be classed as “independent contractors.” Part of the reason for this classification is to avoid providing their workers with the most basic of employment rights, such as paid holidays and the minimum wage – costs which are sure to shrink their bottom lines.
There are also questions of work ethics and the capacity of young workers that are often unable to properly articulate and plot the trajectories of their careers. The McKinsey survey, referenced above, also found that, while demographically diverse, independent workers largely fit into four segments: free agents, who actively choose independent work and derive their primary income from it; casual earners, who use independent work for supplemental income and do so by choice; reluctants, who make their primary living from independent work but would prefer traditional jobs; and the financially strapped, who do supplemental independent work out of necessity. A motley bunch of these sorts of workers with differing interests and expectations from the sharing economy, coupled with technological innovation that is spawning increased automation and the rise of robotics, presents a unique set of challenges for governments, employers and intellectuals trying to map and shape the future of work.
Despite these challenges, it is important to note that in the new gig economy, businesses cut costs and save resources in areas such as benefits, office space and training. Businesses also have the leeway to contract experts, who might otherwise have been too expensive to hire on a fulltime basis, for specific projects.
From the perspective of the freelancer, a gig economy can improve work-life balance over what is tenable in most jobs. Ideally, the model is powered by independent workers selecting jobs that they're interested in, rather than those in which people are forced into by picking up whatever temporary gigs they can land because they are unable to attain employment.
The gig economy in Nigeria is only bound to grow in leaps and bounds as the use of Internet deepens and young people are compelled to get creative due to the current economic conditions. However, the wider political and social considerations add an unwanted layer of uncertainty to the future economic landscape.
When it comes to the new economy, it's fair to say that we are only just getting started here.
Cheta Nwanze is Head of Research at SBM Intelligence.