The Next Big Economy: Gig Economy

If you have experienced the Pathao ride, you already have been part of this segment. The gig economy refers to the exchange of labor for a short period where individuals earn income through flexible or freelance work, using the digital platform to oppose traditional jobs. This economy is adaptable, where workers engage in short-term employment opportunities to suit their skills and schedule.

This can be performed without being a centralized hub where individuals can work in multiple places simultaneously. The digital platforms and flexible working arrangements have led to the rise of the gig economy, which can set off the growth engines by enabling creativity, opening various earning avenues, and establishing a decentralized workforce that adjusts to the changing market needs.

Nepal’s economic scenario is hopeless because of high inflation and shrinking foreign reserves that create a huge trade deficit. Such factors repel foreign investments and put heavy pressure on the people. During the fiscal year 2023/24, inflation stood at 4.10%; this increase pushed up the expenditure of households thereby reducing the general standard of living. Agriculture still forms the bedrock of the economy, employing almost 65% of the labor force and contributing 31.7% of the Gross Domestic Product. At the same time, remittances, which contribute to 9.1% of GDP, show the country’s dependence on its people working in other countries.

The ICT sector is emerging as a dynamic growth driver. The contribution of the ICT sector is approximately 80 billion Nepalese rupees (NRs), which shows that 2.3% of the total GDP sector is emerging as a dynamic growth driver. Alongside it, tourism, remittances, and small-scale industries form other vital pillars of the economy.

Despite achieving modest growth in recent years, Nepal remains constrained by structural challenges such as limited industrialization, underdeveloped infrastructure, and a heavy dependence on imports while recovering from the economic setbacks of the pandemic. The nation’s expanding digital economy and vibrant entrepreneurial landscape hold significant potential for catalyzing long-term economic transformation.

It is nevertheless true that Nepal’s diverse culture and natural environment have a great potential for tourism-related gig prospects. The country possesses a large number of youths, of which many are technologically competent, which is a positive input for the growth of startups and gig economy platforms. Furthermore, for a strong and growing economy, targeted funding into hydropower and renewable energy sources will not only guarantee the creation of numerous jobs but will also establish a route towards energy security, which is essential.

Nepal is majorly focused on young and dynamic work labor. Where 40% of its population is below the age of 25, this shows that this generation has adopted this technology in the highest remark. This shows the result of rapid growth in the use of mobile banking, e-commerce, and digital communication platforms. This reflects that they are interested in quick learning and acquiring training to align in the gig-related fields as well, and it has the potential to open numerous opportunities to generate wealth in this rising economy.

The gig economy of Nepal is relatively new but is expanding rapidly right now. The online gig economy has been estimated to have grown about 67% in the last five years. This role is led by software and technology development which constitutes about 43% of the online freelance marketplace. This tendency indicates a new economic characteristic of Nepal, which is an opportunity to digitalize skilled labor that augments the potential of increasing foreign exchange reserves.

This growing trend not only creates job opportunities for the youth but also contributes significantly to the nation’s GDP. Besides employing the youth, this trend is a major boost to the economy with a substantial contribution to the nation’s GDP. Moreover, with only twenty-two percent of Nepali women being employed outside the home, offering employment through gig platforms is something that can empower Nepali women economically. Approaching diverse industries like ride-sharing, freelance writing, graphic design, and e-commerce, the gig economy opens up a vast array of opportunities.

The gig economy helps an entrepreneurial mindset flourish by offering a low-risk platform. This helps individuals to improve their skills and explore numerous opportunities without having substantial capital. That can boost a problem-solving approach, improve essential business skills, and also help connect workers to global markets and diverse networks.

Having its flexibility and financial security, this economy allows individuals to test their entrepreneurial ideas while reducing risks. Moreover, it offers a safety net if a business enterprise fails. The presence of gig jobs also has a positive effect on entrepreneurial activities, especially in cities facing tougher socioeconomic challenges while driving innovation and growth.

The gig economy is emerging as a tremendous growth worldwide, where every nation is adopting a new approach based on their economic, social, and technological background. The United States is known as an innovator of this economy, where it has about 36% of its workforce involved in gig work, evolving tech services, and innovative fields.

For the protection of the wage rights of gig workers, the US has introduced the “Gig Is Up Act,” which aims to address the exploitation of gig workers by ensuring they receive appropriate benefits and protection likewise India with a large young workforce, has capitalized on gig work in sectors like ride-sharing, food delivery, and IT outsourcing.

Nepal has the opportunity to implement similar kind of strategies to protect gig workers as well as to encourage growth. Establishing the legal regulations that balance the interests of gig workers and platforms where Nepal can design its framework that ensures fair wages and protections.

Nepal can promote the rise of innumerable opportunities by focusing on various industries like agriculture, tourism, and technology, where providing incentives for tech startups as well as encouraging public-private partnerships to develop tech solutions that support gig work in Nepal as well as driving innovation and economic development in the country.

Having the huge potential to foster this economic sector, Nepal is still lacking due to the absence of proper legal frameworks for gig workers that drive them to traditional jobs where there is the protection of labor rights and benefits like health insurance and pension. Limited infrastructure issues have restricted the rise of the gig economy due to the lack of internet facilities and appropriate gadgets in rural areas. Due to the poorer education system, a significant portion of the workforce requires upskilling in digital literacy and entrepreneurial skills to succeed in the gig economy.

Develop policies that guarantee the gig workers access to social security benefits as well as financial security with incentive offers on tax reduction or subsidies for operating startups in the gig economy. This can be achieved by building a favorable ecosystem by establishing comprehensive laws that recognize gig workers as a distinct category. The expansion of the Internet and digital infrastructure through investment in rural areas is essential. Provisions of microloans relieve the financial burden of affording the necessary digital tools for gig-related work.

Nepal is heading to reduce its heavy dependence on remittances by diversifying the nation’s economy by relying on the gig economy that carries immense transformative potential. Empowering local communities can help individuals to earn a livelihood by creating flexible and inclusive opportunities.

Currently, Nepal is in a good position to establish itself as a global hub for freelancers and remote work with its vibrant environment for tech-enthusiastic youth. Nepali professionals can provide competitive services by leveraging international gig platforms like Upwork and Fiverr.

Nepal has the potential to restructure the nation’s economic landscape by promoting innovation and creating vibrant income opportunities that will empower individuals from all walks of life. With favorable policies, public and private sectors can help a country establish itself as a global hub of freelancers and remote workers. Adopting this economy is not merely a solution to unemployment but a sustainable pathway toward economic diversification, financial independence, and sustainable development for Nepal and its people.