Understanding the gig economy in the age of AI

The recent report by Ipsos Research Private Limited has revealed that a staggering 88% of gig workers rely on gig economy platforms as their primary source of income. There is now a new generation of gig workers who are no longer looking for seasonal jobs or part-time jobs to supplement their income. They are hardworking individuals who have created new ways of living and working and are self-employed entrepreneurs. The gig economy's flexibility has slowly entered almost all industries, with employers and gig workers recognising the opportunity for mutual advantage.

The Indian economy is projected to grow at 7.5% in 2024, according to the World Bank. India is currently slated to be the third largest economy in the world by 2027, behind the United States (US) and China. The growing economy will bring increased needs and demands of people. This, in turn, will generate more employment opportunities for both skilled and unskilled blue-collar workers all over the country--especially among gig workers. This trend is already visible in the last decade. While the share of gig workers employed in the transportation sector has fallen slightly, the share of gig workers employed in the construction sector has steadily increased from 1.2% to 3.06%.

The construction industry is already the second largest generator of employment in the country. As per the Skilled Employment in Construction Sector in India report by Knight Frank, the total number of jobs in India's construction sector is expected to reach 100 million by 2030 from 70.6 million currently, with a significant percentage of them being gig workers. This population growth, increasing urbanisation, and advancement of technology will open up new challenges and opportunities for employers and gig workers. The growing opportunity is true for gig workers across all industries. As cities expand, so will the needs of people, leading to a cascading positive effect on the mobility, e-commerce, and retail industries as well. Currently, almost 40% of gig workers are employed in retail trade, approximately 20% in the transportation and storage industry, and approximately another 10% in manufacturing. There are tentatively at least seven million gig workers in the country, with the number growing daily.

These blue-collar gig workers are key stakeholders in the growth of the Indian economy in the next few decades. To ensure the goals of a vibrant, economically thriving Bharat, it is not enough to just recruit more gig workers and connect them with better opportunities. There is an added need and responsibility on recruitment platforms that connect gig workers to employees to also help them continuously upskill themselves.

Artificial Intelligence (AI) is set to transform how recruitment and skill training in India work. The country currently has over 820 million internet users, with many more from rural areas fast gaining digital access. In this day and age, we have AI-powered platforms, which can also be accessed through WhatsApp and social media accounts, helping with job searches. These platforms not only save costs for companies but also match gig workers with the right roles and provide tutorials to help them improve their skills. This is especially beneficial for internal economic migrants of India, who travel vast distances, seeking better opportunities in cities. AI, in this case, allows them to choose jobs that fit their skills and preferences. Ultimately, this technology makes the job search more efficient and satisfying for everyone involved.

Imagine a rural labourer coming to the big city, where he is expected to learn how to run a complicated machine to earn his livelihood. How would migrant labour find a job which fits their requirement or upskill themselves to use a new machine to earn more? Alone they would be lost and unable to take on the challenges. This is where AI comes in. It is the combination of this hard-working human and the wide store of knowledge with the AI platform that helps our gig workers independently overcome challenges--whether through skilling or language.

In the last decade, the central government has launched several schemes, including Pradhan Mantri Kaushal Vikas Yojana, Jan Shikshan Sansthan, National Apprenticeship Promotion Scheme, and Craftsmen Training Scheme, to upskill and reskill blue-collar workers. However, these training programmes, while very important, are often either limited by logistics and geographical constraints or lack of industry insights. This is where market players can ideally step in to reduce the information asymmetry and help both employers and gig workers find more suitable opportunities at a reduced transaction cost.

AI is poised to revolutionise every sector in India. From agriculture to manufacturing, AI can optimise processes, improve yields, and streamline production. However, for India to thrive, this workforce needs to be upskilled. AI-powered training programmes can bridge skill gaps, improve efficiency, and enhance safety standards. While a part of it has already begun with drone deliveries and last-mile delivery optimisation, the processes have yet to reach all sectors and all parts of India for us to become a truly developed nation.

The age of generative AI is upon us. Both the blue-collar workers in India and the employment aggregators who hire gig workers can gain themselves and, in turn, benefit society as a whole by depending on it. The scope and nature of the entire gig economy have not only changed in front of our eyes but are also continuously evolving. There is a broader need to understand and accept that gig work is no longer part-time or jugaad work but a full-time and dignified way of earning an honest livelihood.

This article is authored by Madhav Krishna, founder and CEO, Vahan Inc.