Note Number 03 78266 ICT POLICY NOTES June 2012 New Frontiers and Opportunities in Work ICT is dramatically reshaping the global job market Carlo M. Rossotto, Siou Chew Kuek, and Cecilia Paradi-Guilford Carlo M. Rossotto is Information and communication technology (ICT) is enabling new job trends through regional coordinator for opportunities such as microwork, ICT-enabled contracting, online gaming work, and the Middle East and North in the growing “app� economy. These new trends have risks and benefits. But with Africa Region and for the the appropriate enabling conditions, they can create jobs and new income opportuni- Europe and Central Asia ties. ICT-enabled work can be performed anywhere through regular computers and Region in the ICT Sector Unit of the World Bank. Internet connections, has low entry barriers, offer high flexibility in skills requirements, and is resilient toward and countercyclical to economic downturns. Finally, as forms Siou Chew Kuek is ICT of telework or virtual work, these trends may have a positive environmental effect by policy specialist in the reducing commuting and delivery costs. ICT Sector Unit of the World Bank. ICT enables new types of jobs and Microwork benefits workers in developing and income opportunities developed countries—especially women and young Cecilia Paradi-Guilford is people—with low to midlevel skills. For example, ICT innovations specialist ICT creates jobs and also profoundly effects the in the ICT Sector Unit of Somali refugees in Kenya were able to do microwork structure of the job market, leading to greater the World Bank. after training by nonprofit Samasource even though efficiencies, cross-boundary collaboration, and those refugees had never used a computer (Hegarty deep changes in the global supply chain of services. 2011). Microwork attracts workers in a range of Social media, smarter tools and systems, and larger countries because of a “discretionary income� effect, computing capacity create new possibilities for and because it allows flexible work arrangements. employment (Institute for the Future 2011). Four About half of the workers on Amazon Mechanical significant new job trends enabled by ICT are Turk, one of the earliest generalized platforms for microwork (the smallest unit of work in a virtual This series highlights microwork, live in the U.S.; a third are from India. assembly line), ICT-enabled contracting, online And most are 21 to 25 years of age. Participation transformative analytical and gaming work, and opportunities around the growing among women is high, including above 30 percent operational work and discusses application (“app�) economy. The potential is great in India and up to 70 percent in the U.S. (Ipeirotis emerging policy issues in the as much of the world is now connected (Min and 2010). Other benefits of microwork include access information and communication Rossotto, 2012). to employment for disadvantaged segments of the technologies sector. population, increased computer and communication Microwork skills, and increased confidence and status within Microwork is a new approach to outsourcing that households and communities for workers and breaks down larger business processes into small and particularly women (Sharanappa 2011). simple tasks that rely on human intelligence. These microtasks are then distributed via ‘aggregators’ to Microwork poses some risks because of the ambiguous workers across geographic boundaries, using the regulatory framework for virtual employment. These Internet or mobile phones. Tasks include image risks can be mitigated through policy measures tagging, translation, and content creation including for and self-regulation. Regulation for such labor is product descriptions, proofreading, and transcription. ambiguous and complicated. Each country’s laws may differ; some may protect workers while others The microwork market is growing rapidly. The World could be detrimental to aggregators’ operations. Bank (2012) estimates that the global microwork Regulatory differences among countries also create market size is between US$450 million and US$900 opportunities for aggregators to offer unfavorable million annually, and employs between 1.45 million terms to microworkers. Firms may also encounter and 2.9 million microworkers. This suggests an intellectual property risks through distributing increase from the past; more than 1 million workers microtasks to a widely dispersed set of workers. earned a total of US$1 billion to US$2 billion in However, they may develop agreements with workers the past 10 years (Frei 2009). to limit this risk (Felstiner 2011). New Frontiers and Opportunities in Work: ICT is dramatically reshaping the global job market ICT-Enabled Contracting Asian countries and in other developing countries. However, workers in high-income countries have ICT-enabled contracting typically involves larger, more started filling jobs posted by Indian employers; creative projects. These projects appeal to highly skilled workers in the U.S. are hired by Indian contractors professionals, and can be contracted out globally. 3.2 percent of the time (Freelancer 2012). Companies like Elance, Freelancer, and oDesk allow 2 clients to hire independent contractors, using online The presence of global ICT-enabled contracting collaborative working platforms to structure tasks platforms carries the promise of having an important and monitor contributions and performance. Such countercyclical effect on the local job markets. As contracting frees business from geographic barriers the countries of Greece and Spain were suffering a of traditional hiring, allowing them to hire the talent severe economic downturn in 2011, earnings from that is best aligned to their needs from anywhere Elance contractors in those countries grew by 122 in the world. Information technology (IT) jobs percent and 142 percent, respectively (Elance 2012). form the majority of those posted on these virtual marketplaces. However, jobs in other areas, such Gaming Services “An emerging trend in ICT- as graphic design, animation, music, writing, and Online games are a hugely popular form of enabled contracting is of even legal services, are also growing. For example, entertainment, and have created a virtual employment employers from developing as of April 2012, more than 60 percent of the jobs market, where services are traded for currency. countries. Employers from on oDesk were non-tech (oDesk 2012). Gamers in multiplayer environments can earn virtual India represent 9 percent of The number of hours worked at online workplaces currency (in-game currency that is used to purchase all the jobs posted on one is growing exponentially. According to the Financial virtual goods within online communities) as well as marketplace, making India Times, the number of hours worked at the oDesk monetary compensation. Estimates of the market the third largest country by online workplace grew from 2 million hours in the size for multiplayer online gaming vary considerably: employers after the U.S. and first quarter of 2010 to almost 8 million hours in from US$12.6 billion globally to US$25 billion for United Kingdom.� the first quarter of 2012. On this platform, the the U.S. in 2011 (Lehdonvirta and Ernkvist 2011; earning of workers grew more than 20 times from ESA 2011). 2007 to 2011 to reach US$225 million (Vanham Gaming platforms can support the outsourcing of 2012), with oDesk projecting earnings of US$1 small tasks. CrowdFlower, a platform that outsources billion (oDesk 2012). The impact is global. Nine tasks to groups to solve problems ranging from out of the top 10 countries for number of hours product categorization to business lead verification, worked at oDesk are developing countries (Figure outsourced half of its tasks in 2009 through online 1). Indian contractors are hired by U.S. clients in gaming channels and paid for them with virtual 40 percent of cases, according to Freelancer (2012). cash, according to the company (Mahajan, 2010).1 Contractors from the Philippines have worked almost 18 million hours at oDesk, the highest among all Virtual currency sales account for more than three- countries on this platform. quarters of the gaming market and can be used to obtain virtual goods, which have a social status An emerging trend in ICT-enabled contracting is of value among gamers. In 2009 consumers paid employers from developing countries. The company US$1 billion for virtual goods in the U.S. alone. laimoon.com offers a virtual marketplace for sales Virtual currency and goods can be converted into and marketing professionals from the Middle East real currency. Estimates of earning levels for online interested in working in the Gulf. Employers from gaming workers vary (Heeks 2008). India represent 9 percent of all the jobs posted on the Freelancer.com virtual marketplace, making India One survey suggests the majority of online gaming the third largest country by employers after the U.S. workers earn between US$0.60 to US$1.20 per hour, and United Kingdom. Most of the jobs posted by although some earn up to US$13.40 per hour. An Indian contractors are filled by workers in South estimated 100,000 young, low-skilled workers in China and Vietnam earn their primary income by Figure 1: Total Hours Worked on oDesk accumulating such virtual resources and outsourcing 20 18 their services through gaming platforms (Lehdonvirta Millions 15 14 and Ernkvist 2011). There are an estimated 100,000 10 to 1 million workers in gaming services (Lehdonvirta 5 4 4 3 3 3 and Ernkvist 2011). 1 0 On the downside, the industry has been compared to Philippines India United States Bangladesh Pakistan Russian Federation Ukraine China a virtual sweatshop because of long working hours and 1 CrowdFlower embeds its tasks in online games like FarmVille, Restaurant City, It Girl, Happy Aquar- ium, Happy Pets, Happy Island, and Pop Boom. ICT Policy NoteS POlicIES for the ICT TRANSFORMATION low wages. However, online gaming also has provided downturn, ICT-enabled jobs can offer employment workers benefits through income generation and and income opportunities across the range of skills. improved skills. Workers who earn income through Fourth, ICT jobs also reduce retooling or retraining “Virtual employment plat- gaming compare their working lives positively to transaction costs. Fifth, these trends also reduce forms tend to be counter- the immediate alternatives (Heeks 2008; Jin 2006). barriers to entry and enable self-employment and cyclical. If local demand A recent survey in China also suggests that many entrepreneurship. Finally, with increases in the cost is inherently weak or de- 3 gaming studio workers see their work as a source of energy and carbon taxes, teleworking and virtual pressed by a downturn, of positive skill formation toward future careers working will become even more important (Gratton ICT-enabled jobs can offer (Lehdonvirta and Ernkvist 2011). 2011). Even as these trends come with risks, the employment and income op- inherent opportunities will reshape of the global portunities across the range App Economy employment market. of skills.� A fourth trend is the emergence of the app economy— Policy makers in developing countries may enhance including software, hardware, and design development. the opportunities that ICT offers to create new types The rapid growth of mobile broadband networks, of innovative jobs, while mitigating the associated coupled with the falling prices of smartphones and risks (Table 1). feature phones, creates a vast global platform where mobile software developers can sell applications. Table 1: Policies to foster ICT-enabled employment The growing app economy has created new jobs in Area of focus Policy considerations the U.S. and high-income countries. In the U.S., an estimated 466,000 jobs were created in this Strengthen  romote investments in broadband connectiv- •P industry (TechNet 2012). This growth is significant the enabling ity and cloud computing, especially to connect as it happened during a period (2007–11) when environment remote, lower-income populations. the U.S. economy lost jobs. Expectations are that  nable international micropayment services to •E the global mobile app market will be worth US$25 give employers and workers access to efficient billion by 2015 up from US$6.8 billion in 2010 and cost-effective micropayment services. (MarketsandMarkets 2012). About 70 percent of  evelop skills for the new economy. Develop- •D revenues generated by apps likely go to developers, ing countries should create a labor pool with ICT suggesting the earnings potential. Major app stores skills; a critical mass of talent will attract more also offer additional revenue to developers through investment and spur business creation. advertising and in-apps purchases (Balancing Act 2011).  xamine the environmental, social, economic, •E and legal implications of virtual work. Attention The app economy could create jobs in developing should be paid to labor laws and regulations and countries especially given the widespread availability to rules that promote innovation and the growth of mobile networks, growing mobile Internet of virtual employment platforms, while allowing room for self-regulation. access, growth of mobile ads, and low labor costs. The global apps market is forecast to grow at 29.6 Raise awareness  romote virtual employment for women •P percent annually from 2009 to 2014. New start-ups and promote and youth, who tend to experience higher from developing countries can enter this market collaboration unemployment and underemployment and and rapidly overcome demand constraints of their can benefit from flexible income-generating local markets. Some countries, such as the Arab opportunities. Republic of Egypt, Kenya, Morocco, Nigeria, and  onvene private sector and academia to •C South Africa, have already begun to take strides in ensure demand-driven development of developing their app economy, leveraging the talent virtual employment. Support cross-sectoral of their local developers (Uzor 2012). collaboration and skills development through competitions, hackathons, mentor relationships, and support groups. Conclusions and Policy Recommendations Support testing to  un or contribute to pilots that test virtual •R develop the virtual employment models and applications with focus ICT-enabled new job trends are reshaping the jobs market groups of users and clients. Help develop links employment market and offer new income with potential testing environments in public, opportunities. First, ICT allows workers to bypass nongovernmental, and private sectors such as lab national and geographic boundaries, enabling networks.2 massive labor cost arbitration. Second, ICT provides access to talents and skills worldwide, increasing the efficiency of the job market. Third, virtual 2 The World Bank is becoming increasingly in- employment platforms tend to be countercyclical. volved in this area. Examples include the Global If local demand is inherently weak or depressed by a Water Hackathon, various hackathons and app competitions around development challenges, and the Digital Jam 2.0 event. New Frontiers and Opportunities in Work: ICT is dramatically reshaping the global job market Acknowledgements Jin, Ge. 2006. “Chinese Gold Farmers in the Game World.� Consumers, Commodities, and Consumption 7 (2). The authors thank Shoshanna Deutschkron of oDesk, https://netfiles.uiuc.edu/dtcook/www/CCCnewslet- and Randeep Sudan, Fabio Pittaluga, and Cathy ter/7-2/jin.htm. Russell of the World Bank for their review. Residual KOCCA (Korea Creative Content Agency). 2010. “2010 errors are the responsibility of the authors. White Paper on Korean Games.� KOCCA, Seoul. Kuek, Siou Chew, Linden, Alexander, Paradi-Guilford, Cecilia Bibliography and Jabari, Ihad. 2012. Microwork Feasibility Study for Balancing Act. 2011. Mobile Apps for Africa: Strategies West Bank and Gaza. Washington, DC: World Bank. to Make Sense of Free and Paid apps. http://www. Lehdonvirta, Vili, and Mirko Ernkvist. 2011. “Knowledge balancingact-africa.com/reports/telecoms-and-interne/ Map of the Virtual Economy.� InfoDev, Washington, mobile-apps-for-afri. London: Balancing Act. DC. http://www.infodev.org/en/Publication.1056.html. Elance. 2012. “New Global Employment Report Highlights Mahajan, Neelima. 2010. “Labor-on-Demand.� Mission Lo- Online Work Trends.� Press release, April 17. https:// cal, San Francisco, CA. http://missionlocal.org/2010/11/ www.elance.com/q/node/685. crowdflower/. ESA (Entertainment Software Association). 2011. “Es- MarketsandMarkets. 2012. “World Mobile Applications sential Facts about the Computer and Video Game Market Worth US$25 Billion by 2015�. http://www. Industry: 2011 Sales, Demographics, and Usage Data.� marketsandmarkets.com/PressReleases/mobile-ap- ESA, Washington, DC. http://www.theesa.com/facts/ plications-market.asp pdfs/ESA_EF_2011.pdf. Meier, Patrick. 2011. “Amplifying Somali Voices Using Felstiner, Alex. 2011. “Working the Crowd: Employment and SMS and a Live Map: #SomaliaSpeaks.� Blog entry, POlICY NOTES Labor Law in the Crowdsourcing Industry.� Berkeley iRevolution, December 8. http://irevolution.net/tag/ Journal of Employment and Labor Law 32 (1): 143–204. crowdflower/. This series highlights trans- Freelancer. 2012. “Freelancer.com Launches Dedicated Min, Wonki, and Carlo M. Rossotto. 2012. “Broadband formative analytical and op- Website for India: Indians Can Hire Skilled Profes- and Job Creation.� ICT Policy Note 1, World Bank, erational work and discusses sionals, Work, and Transact in Rupees. Press release, emerging policy issues in the Washington, DC. information and communica- February 9. http://press.freelancer.com.s3.amazonaws. Monitor Group. 2011. “Job Creation through Building the tion technologies sector. The com/2012-02-09-Freelancer.com-india-launch.pdf. Field of Impact Sourcing.� Monitor Inclusive Places findings, interpretations and Frei, Brent. 2009. “Paid Crowdsourcing: Current State and Working Paper, Monitor Group, Mumbai. http://www. conclusions expressed Progress toward Mainstream Business Use.� Smartsheet. herein are entirely those monitor.com/Portals/0/MonitorContent/imported/ of the author(s) and do not com, Bellevue, WA. http://bit.ly/smartsheet_report. MonitorUnitedStates/Articles/PDFs/Monitor_Job_Cre- necessarily reflect the view Gino, Francesca, and Bradley R. Staats. 2012. “Samasource: ation_Through_Building_the_Field_of_Impact_Sourc- of the International Bank Give Work, Not Aid.� Harvard Business School, Cam- ing_6_16_11.pdf. for Reconstruction and bridge, MA. oDesk Interview with the authors, World Bank, 2012. Development/The World Bank and its affiliated Gratton, Lynda. 2011. The Shift: The Future of Work Is Sharanappa, Sandesh. 2011. “Microwork for Macro Gains: organizations, the Board Already Here. London: HarperCollins. Evaluating the Social Impact of ICT-Based Job Creation of Executive Directors of in Rural India.� Samasource, San Francisco. http:// the World Bank or the Heeks, Richard. 2008. “Current Analysis and Future Research samasource.org/wp-content/uploads/_white_pa- governments they represent. Agenda on ‘Gold Farming’: Real-World Production The World Bank cannot in Developing Countries for the Virtual Economies per_file/82-5f13e2b5.pdf. guarantee the accuracy of Online Games.� Development Informatics Work- TechNet. 2012. “New TechNet Sponsored Study: Nearly of the data included in ing Paper 32, University of Manchester, Manchester, 500,000 “App Economy� Jobs in the U.S.. http:// this work. U.K. http://www.sed.manchester.ac.uk/idpm/research/ www.technet.org/new-technet-sponsored-study- publications/wp/di/documents/di_wp32.pdf. nearly-500000-app-economy-jobs-in-united-states- To order additional copies contact Hegarty, Stephanie. 2011. “How Silicon Valley Outsources february-7-2012/ Work to Africa.� BBC World Service, June 17. http:// ThinkEquity. 2009. “Virtual Goods Paying Off for Web Siddhartha Raja www.bbc.co.uk/news/world-africa-13784487. Firms�. TecTrends. http://www.tectrends.com/cgi/ sraja2@worldbank.org Howe, Jeff. 2006a. “The Rise of Crowdsourcing.� Wired showan?an=00177102 or 14 (6): 176, 179. Uzor, Ben Jr. 2012. “Tapping the Potential of Nigeria’s Tim Kelly ———. 2006b. “Taking Measure of Mechanical Turk.� Blog Mobile App Market.� Business Day Online, April 3. tkelly@worldbank.org entry, Crowdsourcing.com, November 3. http://www. http://www.businessdayonline.com/NG/index.php/ analysis/features/35416-tapping-the-potential-of- Telephone: crowdsourcing.com/cs/2006/11/taking_measure_.html. nigerias-mobile-app-market. +1 (202) 473 1000 Institute for the Future. 2011. “Future Work Skills 2020.� Institute for the Future, Palo Alto, CA. http://www. Vanham, Peter. 2012. “Virtual working takes off in EMs.� The World Bank Blog entry, Beyondbrics, May 23. http://blogs.ft.com/ 1818 H St, N.W., iftf.org/system/files/deliverable/IFTF_FutureWork- beyond-brics/2012/05/23/virtual-working-takes-off- Washington, D.C., 20433 SkillsSummary.gif. in-ems/#axzz1vu6IHRo6. Ipeirotis, Panos. 2008. “Why People Participate on Me- chanical Turk, Now Tabulated.� Blog entry, A Computer World Bank. 2012. “How Do Mobile Phones Help People Scientist in a Business School, March 13. http://www. Earn Income?� World Bank, Washington, DC. behind-the-enemy-lines.com/2008/03/why-people- participate-on-mechanical.html. ICT Policy Notes are also available online h t t p : // www.wor l d b ank . org / I C T