E-commerce Boosts Inclusive Labor Markets

21 marzo 2016 - People are excluded from the labor market in many ways. Cultural barriers prevent certain stakeholder groups such as women, youth or indigenous people from working. Geography and location can also present barriers for people looking for employment as well as for those working to become more productive. But the advent of the internet, specifically e-commerce platforms, are reducing these barriers.

The rise of e-commerce platforms is creating a new group of micro-entrepreneurs, who are able to access global markets in a way that was impossible before. In the process, jobs are being created in firms that simply would not exist without such platforms. These include Amazon, eBay and Alibaba. There is also some evidence that certain groups of people who have been kept away from the labor market are now able to work.

The recent World Development Report 2016 Digital Dividends highlights many instances of how e-commerce is boosting the employment opportunities of those who may have been excluded from the global market place. According to the report, the internet enables many small firms to participate in global trade, thus leading to more inclusion. The country that has perhaps derived the most development impact from this has been China.

The WDR notes that ‘China’s State Information Center estimates that the recent boom in the country’s e-commerce sector has created 10 million jobs in online stores and related services, about 1.3 percent of the country’s employment. New opportunities for entrepreneurship and self-employment are also growing rapidly in the digital economy.’

Earlier this month Brian Bieron, Executive Director of the eBay Inc. Public Policy Lab, gave a presentation in conjunction with World Bank’s Jobs Group, in which he talked about how micro enterprises are now global. His presentation showed that by using e-commerce platforms, businesses no longer need to be big to access global markets. Moreover, having access to global markets allows micro businesses to be much more sustainable than in the past.

“The emergence of platform economics has lowered the cost of doing business across distance, for most of the costs of distance, although not all of them,” he said. Bieron calls this new way of trading a Global Empowerment Network, which complements the already existing global value chains. “Global Empowerment Network is … another model that works for microbusiness. This model gives [micro businesses] access to lots of different countries, not just the one or two [countries] which happens in the global value chain model.”