Expert insights

Does the Platform Economy Benefit Global Job Seekers?

Does the Platform Economy Benefit Global Job Seekers?

Konsus CEO Fredrik Thomassen, a former technology and development consultant with McKinsey & Company and a graduate of the London School of Economics, recently wrote a report explaining the far-reaching influence of online labor platforms on the global economy.

The report, titled “5 Ways E-labor is Changing the World,” discusses the impact of e-labor on the global marketplace and day-to-day lives of international freelancers.

Across emerging markets, hundreds of millions of people are connecting to the internet and marketing their skills online. As the report states, “The poorer the country, the higher the potential gain from doing internet work.”

According to neo-classical economic theory, countries with a lot of inexpensive labor (ex. India) should trade often with countries with very little inexpensive labor, but abundant capital (ex. Norway). Thus, wages should "equalize" over time.

However, the lion share of global trade is intraregional, such as French Peugeots sold to German customers, and German Audis sold back to the French, with very little "‘equalization" is going on. With the impact of the internet, two of the most important factors, "transaction costs" and "trade barriers" are, for all practical purposes, removed.

Multi-national labor exchange has never been freer, and huge gains are expected to arise in the poorest countries in the world. Internet payment services such as Payoneer and Paypal and online-labor platforms such as Konsus and Upwork have largely removed barriers to trade entirely.

On these platforms, firms can hire freelancers in a few minutes. As shown in the data in Figure 1, the poorer the country (the more abundant labour as a resource endownment) the higher the potential gain from doing internet work.

The report goes on to describe the ways in which this will profoundly impact labor markets by reducing global inequality, decreasing racial and gender discrimination, and deterring tax evasion, among other effects.

Click here to read the full report.

Konsus’ distributed model allows pricing as low as $19/hr – a fraction of what agencies charge – which also includes strict quality control by local Project Managers. For freelancers, Konsus offers the possibility of a more steady income.

Try us for yourself to learn why companies worldwide are moving towards the future of work with Konsus.

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