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August 25, 2019

Pakistan ranks 4th in global gig economy

Business

August 25, 2019

KARACHI: Pakistan ranked fourth among the top 10 countries in the world in terms of growth in earnings by freelancers, according to the digital money transfer service Payoneer’s Global Gig Economy Index.

Freelancers in the country saw a 47 percent growth in earnings during the second quarter of 2019 compared with the corresponding period a year earlier, the US-based Payoneer said in its latest report.

“Pakistani youth fuel gig economy explosion,” the global payment platform said.

The US was on top with 78 percent revenue growth in the Global Gig Economy Index, followed by UK (59pc), Brazil (48pc), Ukraine (36pc), Philippines (35pc), India (29pc), Bangladesh (27pc), Russia (20pc) and Serbia (19pc). The index is powered by data from a sample of more than 300,000 freelancers, service providers and outsourcing professionals in the Payoneer network

Number of freelancers in Pakistan kept on increasing since Q2 2018. They increased 42 percent year-on-year in Q2 2019 as opposed to 28 percent growth in Q1, 17 percent in Q4 2018 and four percent in Q3 2018.

“The 42 percent increase in Pakistani freelancers since Q2 2018 was fuelled by several factors, most notably a very young population, 70 percent of which are under the age of 30,” Payoneer said. “A more technically-oriented education has helped Pakistan’s youth participate in the gig economy.”

Mohsin Muzaffer, head of Pakistani Business Development, Payoneer said government investment in enhancing digital skills has helped create a skilled freelance workforce, while blanket 4G coverage across Pakistan has given freelancers unprecedented access to international jobs.

Mobile phone subscribers have exceeded the 161 million mark in the country, while there are 69 million 3G/4G subscribers with the modern mobile technology having 32.72 percent penetration.

Pakistani freelance community is using a number of digital payment services to get incomes for their works. While global digital payment platform PayPal is not present in the country, its subsidiary Xoom is providing wire transfer services to the freelancers.

Industry experts said the arrival of all popular international payment gateways would help gig economy accelerate further to attract foreign inflows into the country. Encouraged by no-tax policy on income, information technology sector’s exports have been growing for over a decade.

Payoneer said the investment in the younger generation appears to be paying off in Pakistan. Freelancers younger than 35 generated 77 percent of revenues in Q2. Freelancers in the age group of 25 to 34 topped the earnings graph in the April-June quarter, accounting for 57.6 percent of the gross income of the Pakistani gig economy. Freelancers (18 to 24 years) played second fiddled with 19.7 percent, followed by 35 to 44 years old (16.6pc), 45 to 54 (3.7pc), and 55 plus (2.3pc).

Globally, the Gen X (35 to 44 years old) was by far the most profitable age group, contributing 32 percent of earnings despite representing only 23 percent of freelancers.

“We are seeing more and more professionals leaving their jobs to join the gig economy,” Iain McNicoll, vice president, regional head for the Americas, Payoneer said. “Whether it is the flexible hours, the absence of a manager looking over your shoulder or the desire to build up your own business, workers don’t feel the need to be tied to their offices anymore.”

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