Online Outsourcing: Prospects for Increasing Youth Employment and Reducing Poverty in Indonesia

Rapid advances in computing and information technology are having profound effects on how economic activity is organized globally. For many production activities, widespread use of the internet means it is now possible for employers, workers, and customers or clients to be located almost anywhere in...

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Bibliographic Details
Published in:Policy File 2020
Main Authors: Glick, Peter, Constant, Louay, Edochie, Ifeanyi, Nataraj, Shanthi
Format: Report
Language:English
Subjects:
Children & youth/Families & family life
Developing countries
Information technology
Labor force/Employment
LDCs
Poverty
RAND Corporation
Online Access:Request full text
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Summary:Rapid advances in computing and information technology are having profound effects on how economic activity is organized globally. For many production activities, widespread use of the internet means it is now possible for employers, workers, and customers or clients to be located almost anywhere in the world. In recent years, online outsourcing---whereby certain digital tasks or assignments are carried out for firms by individuals across the globe who are operating basically as independent contractorsrisen rapidly, with the only job requirements being access to a computer and a good internet connection, as well as the requisite skills. Online outsourcing encompasses both virtual freelancing, which consists of skilled tasks, and microwork, which consists of less-skilled, repetitive tasks that can be accomplished online. In this Perspective, the authors review the potential benefits and drawbacks of online outsourcing, with special reference to its potential for youth employment and poverty reduction in Indonesia. They find that although there are several significant constraints on the growth of online outsourcing as well as concerns about the extent it benefits workers, Indonesia's large size and relatively high levels of education and internet connectivity make it fertile ground for a significant expansion of online outsourcing. The right policies will be needed to facilitate this expansion while directing a good share of the benefits to lower-income workers.