If you go by numbers given by the World Bank, 76% of the total workforce in India is actually self-employed. And this is not surprising. In fact, there is a pattern. Underdeveloped and developing countries have more self-employed people than developed countries. A country like North Korea with limited freedom has 89.6% of the self-employed workforce. And the richest nation in the world, Qatar, has a self-employment percentage of meager 0.4%, the United States has 6.2% and Germany has 9.8%.
Some of the positive folks among you might say that “Oh that’s great. We have a lot more entrepreneurs in India than the United States.” And that might sound interesting. But the sad truth is that when you will call your nearby Gol-gappe wala, an entrepreneur, it is highly unlikely that he will be thrilled to hear that because he might barely be making enough to feed his family.
Some of you also might jump to a conclusion that self-employment must be a bad thing. And you won’t be completely wrong. The major reason why underdeveloped and developing countries have such a high number of self-employed people is due to the lack of organized employment opportunities. Even though, we have such high numbers of self-employed people, the quality of work that they are doing is not good. Only a few among them pool are hot shots that you hear about in the media and besides them, there are some MSME owners and freelancers.
What can the government do?
The truth is that government can only do so much. Maybe we can ask them to invest more money in infrastructure, but then more important sectors such as Education and Healthcare will be neglected. Even if they do invest in job-creating sectors, they can only create so many jobs.
And that’s why, the best and possibly the only thing that they can do is to open up the economy even more, “kill” excessive regulations and improve the “ease of starting and doing business” from the ground up. My logic behind this argument is very simple – more ease of doing business means more businesses coming into existence, more businesses conducting business mean more economic activity and more businesses also mean more organized employment. This will benefit the economic growth of our country and hence, it will tackle poverty and other “bad” social indicators.
But there are some problems with that. Firstly, due to years of the socialist mindset that we have unknowingly embraced, we will treat these changes as more capitalist in nature, and hence, a lot of people will oppose those reforms. Secondly, our system is not very efficient in bringing reforms at a quick pace.
The neglected solution
So, what’s the solution for this unemployment crisis without depending on the government to do much?
We can all talk about going ahead with increasing jobs in the services sector or be a manufacturing hub of the world but a better answer, at least for the common man, is a good quality Gig Economy, aka Freelancing.
What comes to your mind when I say, “Freelancing”?
You might think about a young guy or girl working on a laptop, doing something technical. And if you do think like that, I would like to tell you that you are partially wrong.
I have some interesting numbers about freelancing as well.
While it is true that 82% of freelancers are below 35 years of age in Asia, more experienced freelancers and professionals above the age of 55 years earn a higher income, almost as twice.
The average hourly wage of a Freelancer is $21. That is simply too high according to Indian living standards. Sure, many freelancers do work for half of that to be more competitive but you need to understand we live in a Global Village and freelancers compete with people from all around the world.
So, sure there is a lot of money to be made. But what makes it even more appealing and a possible solution for the unemployed, in India? For starters, there are already 15 million freelancers in India. That’s around 3% of the total Indian labor force.
Here is some more data
83% of these freelancers work from the comfort of their homes. That means they don’t have to leave their families behind to work in big cities. Also, they work the same number of hours as the salaried workforce, while earning much more. Remember that the concept of “Family” is important in Indian culture.
Freelancing is not just limited to the technical “stuff”. Freelancers can also find opportunities in domains such as:
- Content Writing
- Language Translation
- Project Management
- Graphics Designing
- Multimedia Production
- Legal Help
- Social Media Management
- Customer Support
This makes freelancing even more accessible to the workforce from different backgrounds and interests.
With 900 million estimated internet users in India by 2025, there is also an industry estimate of the Indian ‘freelancer’ market size growing to $20-30 billion by 2025, with year-on-year freelancer revenue growth of whooping 160%. We have youngsters, a lot of them. All they need to do is to know themselves, be aware of the opportunities, be tech-savvy, and lookout to learn something that they can get paid for over the internet through Social Media and Online Freelancing Marketplaces like Upwork. It can be as simple as teaching how to cook Indian food to foreigners over a video call to as complex as building software.
- Freelancing in 2020: An Abundance of Opportunities: https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf
- The 2020 Freelancer Income Report: https://pubs.payoneer.com/images/2020-Freelancer-Income-Report.pdf
- The Payoneer Freelancer Income Survey (2018): https://www.payoneer.com/downloads/freelancer-income-report-2018.pdf
- Number of Internet Users in India: https://www.statista.com/statistics/255146/number-of-internet-users-in-india/
- Freelancer Industry Growth: https://www.thehindubusinessline.com/economy/with-freelancing-on-the-rise-indias-gig-economy-is-going-strong-report/article10022680.ece