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Characteristics of the Digital Labour Market

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Economic and Social Changes in Worker Status

The Introduction

The economic and social changes and technical prosperity made the main changes in the work process that leads to essential changes in worker status. The last change in the work process is digitalization. In theory, the digitalization is famous as the Fourth Industrial Revolution. The main consequence of the digitalization is the appearance of the digital economy and digital labour market. If we want to understand the workers status in the digitalization process, we should observe new phenomena that are the main consequences of this process. Therefore, the main research question in this paper is: What are the main characteristics of the digital labour market? To answer this question, we will try to define the digital labour market characteristics in European countries and the origin and development of this labour market in Serbia. We will observe the role of social actors, especially trade unions, in the protection of workers rights at the digital labour market, as well. Also, we will perform comparative analyses of the digital and traditional labour market whit accent on workers rights.

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The Digital Economy and Digital Labour Market

Before we define the digital economy and digital labour market, we need to determine the digitalization. “The digitalization is radically reshaping business landscapes and the nature of work, as well as redefining the boundaries of production, distribution and consumption” (EESC, 2017: 9). That is the product of the Fourth Industrial Revolution where is present the transformation of industrial production to digitalized work[1]. The word “Fourth Industrial Revolution” first appeared during the popular fair in Hanover in 2011, as part of the German Industry High Tech Strategy initiative. The establishment of the working group for the Fourth Industrial Revolution is the key outcome of this fair. This working group ‘s report was delivered at the same event in 2013. This report described the areas of this revolution that require the adaptation of the product under conditions of high mass production flexibility (automation process). To obtain an adequate relation between the physical (machines and workers) and the virtual world, this involves self-organized systems (self-optimization, self-configuration, self-diagnosis). This term was officially adopted in 2015 at the World Economic Forum’s annual meeting in Davos, Switzerland. [2]

Economic and Social Changes in Worker Status

The Fourth Industrial Revolution starts with the new millennium. It continues the process of the automatization and robotization of industrial production. Therefore, this is the main reason why we need to make the difference between the two waves of digitalization. The digitalization of labour appears as the consequence of automatization and robotization of industrial production. (Kovacevic, 2019:1) The term second wave of the digitalization uses Degryse to identify the “marriage between Big data and robotization”. (Degryse, 2016:50). The Fourth Industrial Revolution coincides in time with the second wave of digitalization. It includes the growing presence and use of mobile Internet, various cheap sensors and artificial intelligence. (Schwab, 2016:11-12)

The development of ICT in the last decades made fundamental changes in society that has the social, economic and political consequences. At these consequences appears the new form of the economy that determines the information, unmaterial values and services and parallel change thought new working organization and institutional design. Woodall, 2000; Sharma et, al, 2004; Gärdin, 2002 and others tried to find the best term for this kind of economy. They use phrases such as the knowledge-based economy, the borderless economy, the weightless economy, the networked economy, the information-based economy and digital economy. Most of them use the term digital economy to describe this phenomenon. It appears a large number of attempts to determine this economy. At the very beginning, it is necessary to list its essential elements: (1) digitalization and intensive use of information and communication technologies (ICT); (2) codification of knowledge; (3) transformation of information into commodities and (4) new ways of organizing work and production.[3] “The digital economy is the infrastructure development of modern society towards full coverage of information society attributes. The information society is coming through three revolution convergences: digital revolution, that opens the ways for economic revolution, that in turn, strengthens social revolution”.[4] The digital economy includes a few crucial fields: (1) Electronic Transactions and Contracts (e-commerce); (2) Electronic Finance (services, Tax and Customs); (3) Intellectual Property Laws (trademarks, copyrights, and patents); (4) Privacy and Personal Data Protection; (5) Information Security (Cybersecurity, Cybercrime) and (6) Consumer Protection. [5]

The electronic transaction and electronic finance with the use of digital signature are not enough for an understanding of the digital economy. The development of the digital economy transforms labour methods. Therefore, we have new forms of employment: (1) Employee sharing; (2) Job sharing; (3) Voucher – based work; (4) Interim management; (5) Casual work; (6) ICT – based mobile work; (7) Crowd employment; (8) Portfolio work and (9) Collaborative employment. (Eurofond, 2017:7). These forms enable the further development of the digital economy that becomes a gig economy. The term gig economy means a series of short-term jobs and contracts initiated by companies that employ people and pay them by per-job or hourly basis without offering them full-time work. That includes food delivery, taxi services and even skilled labour such as programming and engineering. (Sinicki, 2019:2) The gig economy covers two forms of employment: (1) Crowd work and (2) work on demand via apps. The first form of employment refers to the fulfilment of various tasks through online platforms. The second form refers to the performance of traditional work activities (e.g. transport, cleaning) through applications managed by companies that set minimum standards. (Stefano, 2016:1).

The digital labour market is evolving as a parallel market that is ultra-flexible and where there is no form of employment contract, guaranteed wages, clearly defined jobs and working hours, trade union access or collective action. The employee appears as a partner who belongs to the virtual community and who is usually self-employed, which means own provision of rights arising from employment such as unemployment insurance, pension and health insurance and safety and health at work. (Degryse, 2016:35)

The Key Characteristics of the gig Economy and Digital Labour Market

The development of the digital economy and digital labour market has a socio-economic impact on the evolution of a particular society. Therefore, it is necessary to give brief insights into these two forms. As the digital economy, along with E-Commerce develops rapidly, it is possible to determine the following social impacts: (1) E-Commerce and Digital Divide; (2) E-Commerce and Marginalization; (3) Social Disparities and Change of LifeStyles; (4) Social Isolation; (5) Loss of Individuality; (6) Privacy and (7) The Impact of E-Commerce on Local, Social, and Political Values. [6] The promised economic growth highly positions E-Commerce and thus digital economy on agendas of public and private sectors. Therefore, it is possible to determine the following economic impacts: (1) Organizational Changes of Enterprises; (2) E-Commerce and Local Businesses; (3) Community-Level Impacts of Electronic Commerce; (4) Bundling or Tying Arrangements; (5) Impact on Tax, Trade and Regulatory Policies; (6) Impact on Employment and Labor Policy; (7) Competitive Environment – Influence on Monopolistic Trends; (8) Impact on Prices and (9) The Threat to SMEs(small and medium-sized enterprises). [7]

After determination of terms such as digitalization, digital economy, gig economy, we continue to determine the essential characteristic of the gig economy. The gig economy is the most representative form of the digital economy in the last few years. The different researchers trying to determinate the characteristics of this economy, but they agree that essential are: (1) Time Flexibility; (2) Freedom of Location; (3) Work You Enjoy; (4) Set You Own Fee; (5) Productivity and (6) Stability. On the other hand, it is necessary to determine the negative aspects of the gig economy: (1) Insist on Discipline; (2) Other People create problems that solve employee; (3) Lack of self-employed People; (4) A large number of Admins and (5) Risk of losing the job. (Sinicki, 2019:4-9)

The essential characteristics of the gig economy can observe as a direct consequence of the socio-economic impact of the digital economy. In the beginning, we will present the influence of the Digital Divide. Digital Divide is an unequal approach to ICT or the Internet by employees. That is in direct connection with possible marginalization those who, due to technical reasons or high costs, cannot do business within the digital economy. [8] The digital economy makes social disparities and lifestyle changes. These changes include the flexible working time, freedom of location for a job, work in which employees enjoy, possibility to develop their own business and personal development. Time flexibility is a crucial change as a consequence of the digital economy. The employees could choose the time which they will spend at work. Only limiting factor is in case of employees not complete their task on time, the client will not hire them. If employees operate within the gig economy, it is possible to independently choose the location of the job, which meets the needs of the employee, which means that the employee can enjoy the comfort and luxury of their work environment. Also, the employees can travel across the globe and do their job by laptop, or living in distanced areas and working online. The only request to them is the uninterrupted internet connection. The work in which employees enjoy is also an essential characteristic of the gig economy. That assumes the possibility of independent choice of job, colleagues, and platforms, but also the right to disconnect. The development of their own business and personal development is the crucial change within the gig economy. The employes have the opportunity to choose a job, clients, conclude the agreements, choose of platforms, develop new skills, invest in equipment and self-promotion without the influence of others. The extra income that they make from profitable business decisions keep to themself. (Sinicki, 2019:4-7).

The characteristics of the gig economy are in direct connection with possible social issues which appears in the digital economy. The consequences are social isolation, the loss of the individuality and the challenge of privacy. The social isolation manifests from three crucial elements: (1) the location of work; (2) the flexibly working time and (3) contractual arrangements. [9] The flexible location of work could be the main positive aspect of the digitalization. Nevertheless, if we connect the inability to access to the Internet, we are at the limited field where the gig economy could exist only with a stable Internet connection.

  • [1] Harteis, C. „Machines, Change and Work: An Educational View on the Digitalization of Work”, u: Christian_Harteis (ур.), The Impact of Digitalization on the Workplace, Springer International Publishing, Cham, Switzerland, 2018, str. 1
  • [2] Devezas, T. et al., Industry 4.0 Entrepreneurship and Structural Change in the New Digital Landscape, Springer International Publishing, Cham, Switzerland, 2017, str. 2;
  • [3] Sharma, u : Kehal, H & Varinder, S. Socio-Economic Impacts and Influences of E-Commerce in a Digital Economy, Idea Group Inc, London, 2005, str. 3;
  • [4] Isto, str. 99;
  • [5] Isto, str. 107-108);
  • [6] Kehal, H & Varinder, S. Socio-Economic Impacts and Influences of E-Commerce in a Digital Economy, nav. delo, str. 5-11;
  • [7] Isto, str. 11-16;
  • [8] Kehal, H & Varinder, S. Socio-Economic Impacts and Influences of E-Commerce in a Digital Economy, nav. delo, str. 5;
  • [9] Kehal, H & Varinder, S. Socio-Economic Impacts and Influences of E-Commerce in a Digital Economy, nav. delo, str. 7;

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