Digital Economy and a New Paradigm of the Labor Market

 
PIIS013122270003687-6-1
DOI
Publication type Article
Status Published
Authors
Affiliation: Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO)
Address: Moscow, Russian Federation
Journal nameMirovaia ekonomika i mezhdunarodnye otnosheniia
EditionVolume 62 Issue 12
Pages35-45
Abstract

The article attempts to understand the phenomenon of digitalization of the economy from the viewpoint of its social consequences. The author educes interrelations between a technological progress and processes occurring in the social and labor sphere in their inseparable unity, assesses their impact on the quality of working life and the prospects for development of the social sphere under new conditions. Analyzing the development logic of digital economy, which found its physical expression in digital platforms, the author gives distinctive examples of transformation specific for separate sectors of economy in various world regions. This generates a new economic reality, creating new areas: the economy on demand, gig-economy, network economy, sharing economy, joint consumption economy. The author notes that the digital economy has emerged as a way of interaction between economic agents with regard to economic growth. Limited possibilities for further extensive development of markets determine the fact that nowadays only those innovations are recognized which lead to cost savings. The digital economy technologies provide a manufacturer who produces goods “on demand” with opportunities for a significant reduction in costs. Under conditions that allow the extensive use of foreign resources in terms of outsourcing, these goods are not targeted at the mass consumer. From the social point of view, the main “side effect” of the massive use of digital platforms is a reduction in the demand for labor from a hightech economy. As a result, labor markets of almost all countries are under serious pressure due to underutilization of human capital, owing not only to the rise of unemployment, but also to the widespread of underemployment. The author concludes: the digital economy is not merely the use of new technologies that enhance the efficiency of previous business processes, but rather an entirety of system changes. They form qualitatively new principles for organization of a separate business, the economy, and society as a whole, transforming social relations through a change of the social and labor sphere.

Keywordsdigital economy, platform employment, gig-economy, sharing economy, labor market, employment, unmanned technologies, labor relations.
Received11.01.2019
Publication date14.01.2019
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