By Anirudh Jaitly
Gig economy: India’s Micro, Small, and Medium Enterprises (MSME) sector plays a crucial role in the nation’s economic growth and overall socio-economic development. According to government data, with over 63 million enterprises, this sector contributes around 30 per cent to the GDP and serves as the backbone of national economic structure, providing employment to over 113 million people. Therefore, to bolster their growth and empower MSMEs, the ecosystem needs to address various factors such as financial support, business expansion, operational efficiency, talent acquisition/management, and adaptability. The gig economy, which has experienced substantial growth in India in recent years, emerges as a promising solution to enhance these aspects.
Let’s take the case of a small Delhi-based business dealing in Water Purifiers. The company’s growth had reached a standstill due to low budgets to hire talent for business development. By onboarding a couple of sales promoters on a contractual basis, the company was able to achieve 3x growth within just 2 months. With the gig economy, the MSME has the opportunity to variable fixed costs of hiring and retaining talent, making business growth more achieved and aligned with its budget.
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Cost-Effective Business Expansion
The gig economy presents a major advantage for MSMEs in terms of cost-effectiveness. By adopting a gig-based approach, these enterprises can significantly reduce overhead costs. Instead of maintaining a permanent workforce, they gain access to a flexible labour pool on an on-demand basis. This allows them to utilize specialized skills as needed, leading to faster, more efficient, and more effective project completion. Additionally, the flexibility enables them to scale their operations based on market demand or seasonality without incurring extra fixed costs associated with a permanent workforce. Optimizing talent utilization increases productivity, ensuring MSMEs thrive in a competitive market.
Enabling Scalability and Agility
The gig economy offers MSMEs the advantage of scalability and agility, enabling them to stay ahead in the ever-changing marketplace. By leveraging the gig economy, Micro, Small, and Medium Enterprises can quickly fulfil work requirements with a PAN India presence without the need to invest time and resources in hiring and training workers in multiple locations. This grants them the ability to explore new markets and venture into new horizons. The quick adaptability to market dynamics and efficient management of operations gives MSMEs a competitive edge, allowing them to seize lucrative opportunities and effectively tackle challenges whenever they arise.
Access to Technological Tools and Real-Time Data
While MSMEs recognize the advantages of utilizing the gig economy, they often encounter challenges in effectively employing technological tools to manage their workforce and measure output. Due to their limited budgets and focus on core competencies, investing a substantial amount in technology can be problematic. Here’s where tech-enabled gig platforms come to the rescue, bridging this gap with their robust solutions. By leveraging on-demand enterprise gig platforms, MSMEs can easily access the necessary technological expertise. These platforms provide essential technological tools and furnish real-time data and insights into ongoing work. Integration of technology enhances management, accountability, and transparency, maximizing MSMEs’ productivity and efficiency.
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Building an inclusive ecosystem that supports and fosters growth for MSMEs is paramount for India’s overall economic development. MSMEs can optimize their resources, adapt to market demands, and expand their operations effectively by embracing the gig economy. Additionally, tech-enabled gig platforms offer the necessary technological tools and insights to manage the workforce and measure output efficiently. MSMEs can leverage these prospects and further increase their productivity, boost growth, and contribute to the country’s economic progress.
Anirudh Jaitly is the Chief Strategy Officer of Awign. Views expressed are the author’s own.