New Audio Available for Media Use: The Future of the Gig Economy in Turbulent Times

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New Audio Available for Media Use: The Future of the Gig Economy in Turbulent Times

BALTIMORE, MD, July 15 2022 – New audio is available for media use featuring Gad Allon on the future of the gig economy in turbulent times. He is the Jeffrey A. Keswin Professor; a Professor of Operations, Information and Decisions; and the Director of the Jerome Fisher Program in Management & Technology at The Wharton School at the University of Pennsylvania. This content is made available by INFORMS, the largest association for the decision and data sciences. All sound should be attributed to Gad Allon. What follows are 4 questions and responses. These responses were provided on July 14, 2022.

 

 

Question 1: The gig economy has been thriving, yet America and the world are now facing turbulent, if recessionary conditions. How will the gig economy fare?

Time Cue: 0:27, Soundbite Duration: :48

“The recession is going to have a dual impact on the gig economy. On the one side, the gig economy is really trying to offer customers a much faster response what we call on-demand economy. The willingness to pay for that is definitely going to go down. People will be less willing to pay for very fast and available services. At the same time, we are more likely to see more supply. As we're going to see more recession or recessionary pressure, we're going to see more unemployment, people are going to use the gig economy to try to supplement their salary or to use it as a temporal option between work. In that sense, we're going to see lower prices and lower willingness to pay so it's going to be hard to predict what's going to be the ultimate impact. But in my opinion, it's going to become more widespread as overall effort within the economy.”  

 

 

Question 2: Why are more and more companies turning to gig workers instead of hiring full-time or part-time employees?

Time Cue: 1:26, Soundbite Duration: :43

” One of the main benefits of getting into the gig economy is addressing one of the hardest questions for every firm, ‘Which is how do I make supply and demand?’ Traditionally, the firm will have to hire full-time employees or part-time employees and hire them for a period of time to match that. What the gig economy allows people and firms to do is to hire people only when I need them. On one side, there is clearly some labor arbitrage that come with that. But in my opinion, the main benefit is really the fact that I can actually create a market that regulates itself that naturally allows me to actually have enough people or more people, even if I pay for a search pricing while in other times where there is actually much, much less demand. I actually have the people actually probably working for other firms.”

 

   

Question 3: Two part question: What industries will rely more increasingly on gig workers? What types of jobs are best suited for gig work? 

Time Cue: 02:19, Soundbite Duration: 1:10

“Gig work started with very, very simple industries where the work is well defined. Mobility is one. I want to go from point A to point B. That's quite simple. Simple to advertise if that's what I need. Simple to find the worker to do that. Then it moved to grocery and food. But over the last few years, we see that getting more and more prevalent in much more complex industries. Firms like Fiverr, Upwork, and the most exciting firm to me at least is Catalent that allows small and medium businesses and also much bigger businesses find consultants so doing work traditionally done by McKinsey, BCG, and Bain and the like. Basically, what we're going to see is that gig economy started by really allowing for low skill labor to find temporary work. Over time, we're going to see firms using gig economy as a way to find expertise in areas where they actually don't need the expert for more than one task. If you ask me what's the future and what are the industries, in my opinion, going to see a whole spectrum of industries and in the future in my opinion, it's going to be a layer, short layer, of managers that are going to be able to manage different gig economy tasks done by either low skilled labor or very high skilled labor.”

 

 

Question 4: What is the most effective way to tap the potential of the gig economy in America going forward?

Time Cue: 03:40, Soundbite Duration: :54

“The way to think about the future of the gig economy will require us to have changes almost in every layer of the economy. We'll have to think about managers that do not have potentially access anymore to full-time employees and we'll have to think about how do they tap into part-time employees that they need based on demand. We'll have to change the education system. The education system currently is teaching people how to be employees on an assembly line. While what we need really is an education system that allows people to think about how can they differentiate themselves and to be targets for some of these firms that need only expertise in a short amount of time. We also need to build a social safety net so people will actually find that they need to work for a full-time firm to be able to get healthcare and pension. The economy overall to allow for the gig economy to grow, they require a much, much deeper change than what we see by just the emergence of Uber, Lyft, and the like.”

 

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