Employment has shifted from being a lifetime contract to a taxicab relationship in three phases; Employment 1.0 (the industrial revolution), Employment 2.0 (the rise of trade unions and employment legislation) and Employment 3.0 (globalization, outsourcing, technology substitution of labour, and the decline of trade unions). But will Employment 4.0 (the rise of the gig economy) really see the terminal decline of firms? Employment 3.0 took advantage of the lowering of these “transaction costs” due to globalization, technology, emerging markets human capital, etc., by outsourcing what was previously core work. It is premature to conclude that Employment 4.0 means the end of big firms—particularly in the new economy where Amazon controls 50% of e-commerce and Google 85% of search—but what is certain is that India has too many jobs of the Employment 4.0 kind and needs to create more jobs of the Employment 3.0 kind. But India needs to move in the opposite direction by doubling wage employment from 25% of the labour force to 50%.

Source: Mint July 16, 2017 18:22 UTC