Global Policy
The Digital Economy: Opportunities and
Challenges
National Pension and Assistance Fund for Accountants and Fiscal Experts
Digital economy: structure and implications
The digital economy represents a key feature of contempo-
rary times, affecting the features of economies and offering
new opportunities beyond national borders without relocat-
ing. It comprises ‘online platforms, and activities that owe
their existence to such platforms’ (IMF, 2018, p. 7). This fast-
growing phenomenon – expanding the space where
demand and the supply of labour can meet – creates new
professional figures and allows a number of new services to
be available to consumers (e.g. Uber, Deliveroo, etc.).1 That
said, the weakening of the contractual power of workers
and income volatility are arguably the most significant nega-
tive spillover effects (see ILO, 2018) that the digital economy
can foster. It is in this context that the so-called gig econ-
omy, which encompasses a broad category of ‘workers [. . .]
hired on the spot’ (Friedman, 2014, p. 172), might prolifer-
ate.2 In order to minimise adverse effects and maximise
opportunities connected with the expansion of the digital
economy, what policy tools should be adopted?
Opportunities and challenges
Crowd-work (i.e. outsourcing of work ‘through an open call
to a geographically dispersed crowd’) presents a key feature
of the digital economy (see ILO, 2019). Work, in several
cases, can, in fact, be carried out anywhere an internet con-
nection is present. The digitalisation of the economy argu-
ably allows workers to select their employer and
consequently offer their skills to the best buyer. This ‘skill
arbitrage’ could therefore develop alongside to the so-called
‘labour arbitrage’, which instead identifies a capital-driven
process, whereby employers will hire on the basis of differ-
entials in labour costs (Graham et al., 2017, p.142).
The Commentary is also based on the work conducted by
the Ministry of Labour in Italy from 2014 to 2018 and in par-
ticular on the Italian contribution to the 100th anniversary
of ILO at the G7 meeting of ministers of labour.
Global Policy (2019) doi: 10.1111/1758-5899.12745
Valentina Amuso
Practitioner Commentary
University College London (UCL)
Giuliano Poletti
Former Italian Minister of Labour
Donato Montibello
The digital economy, through the development of long-
distance forms of labour, could also reduce gender biases
(Drahokoupil and Jepsen, 2017; Graham et al., 2017) and
other forms of discrimination regarding, for instance, the
LGBTQ community. This is because workers could reach dis-
tant markets where such forms of discrimination appear to
be less entrenched in society (Graham et al., 2017) and,
therefore, less likely to affect the hiring process. Also, the
digital economy might offer new fora to facilitate integra-
tion within countries, which in addition to government-
based initiatives, can foster and facilitate social protection3
For instance, the online company ‘Orten.io’ attempts to cre-
ate a platform were people from minorities and different
backgrounds can access training and engage with tech com-
panies in Sweden.
The globalisation of production has led to the formation
of complex and dynamic ‘cross-border production networks’
(Gereffi et al., 2005, p. 80). By reducing costs and providing
firms with services at cheaper prices (OECD, 2016), the digi-
talisation of the economy might affect the structure of the
global value chain (GVC). For instance, although the level of
participation of small and medium enterprises (SMEs) in the
GVC remains limited, the digitalisation of the economy
might allow companies to further rely on technology to
advertise products, develop a direct access to buyers by cut-
ting out the middle man, facilitate coordination mechanisms
between buyers and sellers, and increase sales and use arti-
ficial intelligence and the Internet of Things (IOT)4 to pro-
mote and sustain efficiency and, therefore, competitiveness
(World Trade Organisation, 2019).
The development of the digital economy not only gener-
ates benefits but also triggers a number of polarising pro-
cesses. Such effects cannot be entirely attributed to the
digitalisation of the economy and the development of the
gig economy within it. Nevertheless, one could not deny
that technological progress and the consequent delocalisa-
tion of labour generate a series of consequences both on
the national and international level. The progressive digitali-
sation of the economy can produce at least three forms of
© 2019 University of Durham and John Wiley & Sons, Ltd.
 Valentina Amuso et al.
2
polarisation: (1) between age groups; (2) skilled and
unskilled labour; and (3) between and within territories.
Some of these forms of polarisation apply to a different
extent to crowd-work services. If one considers age groups,
empirical research suggests that individuals involved in the
gig economy are relatively young (i.e. under 35 years) (see
ILO, 2018) and more able to adapt to the changes intro-
duced by the digital economy. Polarisation also occurs in
relation to different skills. Literature on the digital economy
shows that as far as the AMT is concerned, the usual hourly
wage is $2 (Hara et al., 2018; Prassl and Risak, 2016; see
Mandl, 2016). Other online platforms, unlike the AMT,
require high-level skills and could allow for the accumula-
tion of a significantly higher income. Udemy, for instance, is
as a platform dedicated to encouraging and supporting
online learning. It provides 100,000 courses, developed by
content creators, and has over 24 million student accounts.
The expected profit, which is dependent on the popularity
of the course, could be significant.
Polarisation may manifest between territories within the
same country or between countries. One might argue that
some territories are better able to reap the benefits of the
digital economy given their degree of technological
advancement and the type of infrastructure present. Territo-
ries and countries with an adequate level of ICT infrastruc-
ture and broadband networks will be better positioned to
benefit from the digital economy (i.e. access to job opportu-
nities located elsewhere, social services, digital platforms,
etc.). For instance, a wider diffusion of mobile phones and
internet connections could allow farmers in developing
countries to sell their products at competitive prices (OECD,
2016) and advertise their work and products more efficiently.
In addition to polarisation, one of the main concerns
regarding the progressive extension of the gig economy
concerns the weakening bargaining power of workers, the
emergence of atypical contractual forms, and the necessity
to adapt to existing regulations to grant workers adequate
social protection (Prassl and Risak, 2016; see also Eurofund,
2019). This poses questions for collective bargaining and
cooperation at the international level with regard to activi-
ties for which sufficient data are missing and the structure
of which remains only partially explored.
Policy indications
The responses to the pace of innovation and the consequent
opportunities and challenges it brings require a multilevel
intervention that starts locally and becomes progressively
global. First, initiatives should be undertaken to strengthen
the learning process to allow a wider range of the popula-
tion to benefit from the digital economy by acquiring new
digital skills and familiarity with new technologies. As argued
by Funes et al. (2018, p.1) ‘four out of ten European employ-
ers are struggling to recruit employees with the skills needed
to grow and innovate across all sectors’. According to the
European Commission 44 per cent of EU citizens aged
between 16 and 74 do not possess basic digital skills (Euro-
pean Commission, 2017). According to the Barclays Digital
© 2019 University of Durham and John Wiley & Sons, Ltd.
Development Index (2016), less than 40 per cent of UK work-
ers are offered digital training. Offering courses to update
internet literacy and life-long learning programmes might
help workers to become familiar with constantly changing
technology, inform them of ever-changing opportunities and
increase both efficiency and competitiveness.
The need to ensure digital literacy remains necessary to
fully grasp the possible opportunities associated with the
development of the digital economy. A number of initiatives
could favour the development of such skills. Courses pro-
vided on the basis of individual need could allow for the
development of ‘soft skills’ and of ‘intangible skills’. To fur-
ther enhance the acquisition of digital skills, the funding of
a growing number of digital economy centres for doctoral
training, already present in some capacity in the UK, could
facilitate the acquisition of technological knowledge. Con-
versations should be welcomed within the OECD Directorate
for Education and Skills to further develop plans to ensure
the acquisition of digital knowledge.
Sustainable development of the digital economy also
requires deeper knowledge on the functioning of work plat-
forms and their structural characteristics (see IMF, 2018). The
data on these issues are fragmented and based primarily on
ad hoc investigations. Empirical studies conducted thus far
remain limited or incomplete and/or concentrated primarily
on a country basis (see, for example, Katz and Krueger, 2016
for the United States). The more recent Online Labour Index
tracks ‘all the projects/tasks posted on the five largest Eng-
lish-language online labour platforms, representing at least
70% of the market by traffic’ (Oxford Internet Institute, 2019,
see also K€assi and Lehdonvirta, 2018) and remains helpful to
unlock the complexity of the digital economy. However, fur-
ther data converging non-English speaking platforms could
also offer additional insights.
Overall, the data and empirical research available are not
sufficient to grasp the complexities of gig economy (IMF,
2018), successfully reform regulations, and adopt the neces-
sary policy tools (e.g. update national laws, develop ade-
quate monitoring activities, etc.) to face new and existing
challenges. Interventions should be preceded by studies
clarifying the extent of the digital economy and the gig
economy and their main features. National and international
surveys could help to cover the existing gaps in data. Data
collection appears essential to develop a better understand-
ing of how such platforms are structured and therefore
develop relevant legal tools to address some of the con-
cerns related to working conditions.
The involvement of professional organisations such as
the International Association of Outsourcing Professionals
(IAOP) together with trade unions, governments and inter-
national organizations such as the ILO should be welcome
in order to develop monitoring activities, codes of conduct
and offer advice on non-typical aspects of working condi-
tions. A stronger public-private partnership at the national
and international level should ensure the development of
sufficient monitoring activities. Developing cooperation
between the social partners within national and other bor-
ders remains essential in order to monitor the development
Global Policy (2019)
 The Digital Economy
of the digital economy and the gig economy within it,
which by its very nature tends to be less linked to specific
territorial boundaries and progressively entails the emer-
gence of atypical contractual figures. Periodic round tables
between countries on the digital economy could allow for
the development of world-wide recommendations and
common strategies to monitor the development of the digi-
tal economy and address issues such as workers and data
protection.
The European Commission (2019, p. 43) has suggested
the creation of a Digital Single Window (i.e. digital interface),
via which ‘automated reports from platform companies
would allow collecting earnings data in a standardised digi-
tal format to reduce the cost of compliance’. Although this
approach has been implemented by some EU countries,
more coordination to avoid the doubling of such procedures
across countries should be achieved (European Commission,
2019). Also, more cooperation between international organi-
sations (e.g. UN, ILO, OECD, G20) and the establishment of
joint task forces and working groups on the digital economy
should be welcome. The G20, for instance, has established a
digital economy repository in order to share good practices.
Such initiatives could be extended to involve a higher num-
ber of countries, industries, and territorial entities in order to
develop a broader and more tailored approach to the digital
economy.
Conclusions
New technological developments bring a number of bene-
fits but also concerns. Given the potential of these new
forms of employment, the first necessary action would be to
gather sufficient information to develop adequate policy
recommendations. Coordinated national and cross-national
surveys could help to fill some of the existing gaps. The sec-
ond step would be to develop a stronger public-private
partnership between the government, the OECD, ILO, and
existing professional associations to increase the monitoring
of working conditions in digital platforms. Since work is usu-
ally outsourced, a broader form of coordination between
multiple entities becomes indispensable to gather the nec-
essary information and develop adequate proposals to pro-
tect workers. The establishment of ad hoc bodies and
monitoring activities should inform such policy recommen-
dations aiming at ensuring adequate pay and the protection
of basic labour rights. Finally, despite the increasing speed
of digital innovation, governments should invest in educa-
tion and life programmes to fully reap the benefits of the
digital economy.
Notes
1. Digital platforms are platforms for crowd-work providing companies
with ‘way[s] of outsourcing tasks to a large pool of workers’ (Cantar-
ella and Strozzi, 2018; Prassl and Risak, 2016, p. 622). Examples are
the Amazon Mechanical Turk (AMT) and Figure Eight. AMT can be
defined as a market for crowdsourcing, where individuals are
prompted to perform tasks that cannot be performed by computers.
Global Policy (2019)
3
AMT makes ‘human intelligence’ available. Figure Eight regards the
development of Artificial Intelligence (AI) thanks the influx of infor-
mation from individuals. The activities carried out consist of the col-
lection of data, its identification, and the labelling of images.
However, the potential and concrete effects on the labour market
remain noticeable (see Aloisi, 2015; D’Cruz, 2017; Drahokoupil and
Piasna, 2017; Scholz, 2017).
2. The term ‘gig’ refers to the process of hiring musicians and/or per-
formers for a single event (Friedman, 2014) and it later extended to
refer to the short-term on-the-spot nature of the employment.
3. The European Commission (2019, p.42), in order to address the chal-
lenges tied to less standardised forms of labour and ensure better
social protection, has suggested the creation of an ‘under-employ-
ment insurance’ that ‘addresses fluctuating and episodic income’.
4. The IOT can be defined as ‘an open and comprehensive network of
intelligent objects that have the capacity to auto-organize, share
information, data and resources, reacting and acting in face of situa-
tions and changes in the environment’ (Madakam et al., 2015, p.
165).
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Author Information
Valentina Amuso is a Teaching Fellow in Political Economy and Com-
parative Politics at UCL and she previously taught IPE at Durham
University. Dr. Amuso completed her PhD at Durham University, UK. She
was a visiting scholar at UC Berkeley in 2017. Her research focuses on
global trade governance, trade negotiations, and Economic Diplomacy.
Giuliano Poletti is a former Italian Minister of Labour and Welfare from
2014 to 2018. He served as minister in Matteo Renzi’s government and
Paolo Gentiloni’s government. He was also head of the Italian coopera-
tive association Legacoop and president of Alleanza Cooperative Italiane
(i.e. Alliance of Italian cooperatives).
Donato Montibello was advisor to the Minister of Labour Giuliano
Poletti. He is currently a board member of cassa nazionale di previdenza
ed assistenza a favore dei ragionieri e periti commerciali (i.e. Board
member – National Pension and Assistance Fund for Accountants and
Fiscal Experts).
Global Policy (2019)