The International Labour Organization (ILO) has released a study to identify whether developing countries have the potential to achieve the same level of economic success and advancement that developed nations have attained through industrialization, considering the multifaceted factors beyond technology that influence development trajectories.
The focus of the study is on the effects of the rise in the digital economy in developing countries and its potential to reshape their structural and productive landscapes.
The research, authored by Sarah Cook and Uma Rani titled: “Platform work in developing economies: Can digitalization drive structural transformation?” seen by Nairametrics examines the types of jobs created by digital platforms, such as delivery services, driving, caregiving, and web-based professional tasks like coding.
What the research addresses
The research explores how digitalization could promote a human-centered, inclusive, and environmentally sustainable development, particularly by analyzing the work conditions of those in developing countries and viewing technology as a crucial tool for overcoming current developmental challenges towards a more digital, eco-friendly economy.
Despite acknowledging the transformative power of digital technologies, the report:
- Critically assesses its ability to single-handedly improve working conditions or drive significant development and structural shifts in economies with low to lower-middle incomes.
- Indicates an increase in job insecurity among workers, suggesting that digitalization could result in a “digital labor sweatshop” scenario, which may not substantially benefit local economies or lead to meaningful structural changes.
- Outlines the obstacles to digital growth in contexts marked by limited governmental and institutional effectiveness, constrained financial resources, widespread inequality, and problematic labor market conditions, along with the complexities of integrating into the global supply chain and the financialization of economic activities.
Recommendations
The authors therefore recommend the following:
- Vital policy interventions to steer the digital economic shift towards goals of sustainability, fairness, and inclusivity.
- These policy interventions include regulating businesses, enhancing social protections, promoting union activities, ensuring data openness, and leveraging digital tools to improve worker rights and conditions.
- A re-evaluation of the connections between skills, productivity, and wages, particularly in terms of effectively utilizing an educated or skilled workforce, will be essential.
This is significant not only for the workers but also for fostering an environment conducive to learning about technology and facilitating its adoption and diffusion, thereby boosting overall economic productivity.
The authors advocate for further studies to deepen understanding of these strategies.
