Technology is now bridging the gap between demand and supply and the core of all this transformation are tech platforms that are bridging this gap.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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Technology is now bridging the gap between demand and supply and the core of all this transformation are tech platforms that are bridging this gap.

We are living in an unprecedented technological age. Just a few years ago, simple things like getting a ride back home or sending money to your family seemed like big jobs. Now, they hardly take a few seconds. Technology is now bridging the gap between demand and supply and the core of all this transformation are tech platforms that are bridging this gap. Think of any major tech invention that has made your life easier, it would inevitably be a platform. You book your ride back home using a can aggregator platform, you get groceries through a quick commerce platform, and you send money home through a digital payment platform. The reason why platforms are so impactful is that, at their core, they solve the problem of asymmetries between demand and supply. Even though a lot of industries have become more balanced, there are still a lot of differences in information and opportunities in some industries writes Pravin Agarwala, Co-Founder and Group CEO, BetterPlace.

 

Asymmetries Abound

If one were to look closer into the Indian economy, one would find asymmetries abound. Take the example of employment. India has the world’s second-largest employable population, despite this, enterprises always face a shortage of frontline workers. On the other hand, India is home to over 35,000 formal enterprises, but only 8% of the entire workforce works in the formal sector. Moreover, even within the employed population, there are major asymmetries in terms of the distribution of benefits. Most of the time, white-collar workers have better benefits and more money than blue-collar or grey-collar workers. The deeper we go, the more asymmetries we will find, and these asymmetries leave a lot of untapped opportunities unexplored.

However, there is a shimmer of hope. With more than 70% of the frontline workforce being digital natives, digital adoption among the frontline cohort has rapidly increased in the last few years. A significant number of this cohort are using their smartphones to shop online, make digital payments, and in some cases, find jobs. These have created shards of data that could be used to solve the asymmetries. In other words, these shards of data are ripe enough to be leveraged to build a platform economy.

The Power of Platform

The power of platforms to break down information asymmetries has been well-documented throughout history. The first ever platform that proved immensely impactful for a country’s economy was the Amsterdam Stock Exchange, which was founded in 1606. Before the creation of the stock exchange, commodities in Amsterdam were being traded between two people, at set prices without any competing offers being made to the producer. This resulted in wealth lying in the hands of the few without it flowing freely into the economy. With the creation of the exchange, competitive prices were introduced, markets were opened, and wealth was evenly distributed. The result is a well-functioning economy geared towards stability and growth.

A similar platform for frontline workers is the need of the hour in India today. With 1 in 5 Indians being involved in India’s blue-collar workforce, formalizing this cohort would have a significant impact on the economy. A platform economy will help formalize this cohort through discovery, distribution of benefits, and upliftment.

Through the platform economy, workers would be able to find the right job, and the employer would be able to find the right person for the job at the same time. A platform economy would also open up the market to competitive salaries, which would benefit not only employees by allowing them to choose the highest-paying jobs, but also businesses because they would now be aware of the market rate of employment and would be able to keep up with it to avoid high rates of attrition.

While this discovery will lead to more people coming into the fold of the formal economy, the platform economy, as the next step, would enable employers to distribute benefits like insurance and credit to their frontline workers. This would further formalize the cohort and bring them closer to parity with white-collar workers.

Finally, the platform economy would also enable the frontline workers to go a step further towards upliftment. Timely access to credit and access to insurance will uplift their financial well-being, making them less prone to crisis. Platforms can provide them access to upskilling courses so that they can grow vertically to keep up with the times. Additionally, the platform could provide them with gig opportunities to work during their downtime to earn more money.

By breaking down the asymmetries, one wall at a time, and bringing the frontline workers at par with white-collar workers, we would have unlocked a new era of economic growth for India, which is not only focused on growth but also stability and sustainability.

 

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members