As the world revolves around the digital landscape, Sri Lanka has also become competitive in the digital world, especially with the current momentum of the National Digital Strategy (NDS) 2030.
Notwithstanding differing opinions, the gig economy holds the potential to accommodate and benefit a significant portion of the country’s population, especially with the upcoming implementation of the NDS.
According to the 2019 Annual Report of the Central Bank of Sri Lanka (CBSL), the gig economy broadly refers to an economy where freelancers or independent contractors (gig workers) widely exist in the labour market instead of traditional work arrangements between the employer and employee.
The most common examples of gig activities include ride-sharing and Peer-to-Peer (P2P) accommodation, which can be virtually extended to any service offering P2P and global online freelancing platforms.
The Government’s stance on the gig economy was reflected in a proposal from the 2024 Budget speech to create rules for the gig economy and e-commerce, including international transactions, to address payment systems, tax revenue, and worker welfare.
ICTA initiatives
When The Sunday Morning spoke to Information and Communication Technology Agency (ICTA) Senior Manager Kasun Tharaka about the potential for developing Sri Lanka’s gig economy, he pointed out that the country’s Government sector did not regulate freelancing. Consequently, no specific key data related to digital freelancing or the gig economy is available from the CBSL or any Government bodies. This lack of regulation is also a significant problem.
According to Tharaka, there are two types of segments in the gig economy. One is crowd-work or virtual gigs, where a gig worker performs the task remotely, which is virtual work. Workers with the required skills (crowd workers) are located worldwide and hired to perform the tasks via the internet. The hired individuals are called digital freelancers and examples of such platforms include Fiverr, Upwork, Freelancer, etc.
The second is on-demand, offline work where the gig worker works on-site for the client. Companies organise specific tasks carried out locally via mobile platforms. On-demand workers should live in physical proximity to the purchaser and the work mostly involves low-skilled physical tasks and lower requirements for digital access and capacity. Examples of this include PickMe, Uber, etc.
“The ICTA has been focusing on the country’s digital economy since 2022 and we have also emphasised the development of freelancing in Sri Lanka as one of the key segments in capability building. We primarily encourage youth to join the ICT workforce as digital freelancers,” Tharaka noted.
He observed that as a side effect of inflation, many people were ready to work as freelancers to earn extra income. “The younger generation does not prefer traditional 9-to-5 full-time jobs; instead, they prefer flexible working hours. These are the key factors we have identified to promote freelancing here,” he added.
Job opportunities
“Following the Covid-19 pandemic, companies and individuals are increasingly willing to work with freelancers and seek support from freelancing institutes,” Tharaka said, noting that the next level of freelancing was digital entrepreneurship.
He highlighted that initially, people had worked on freelancing platforms such as Fiverr and similar sites, after which they had moved on to their own startups, creating new job opportunities in Sri Lanka.
Additionally, Tharaka noted that freelancing platforms did not prioritise professional qualifications; instead, they connected clients with skilled individuals. He further noted that this provided an opportunity for Sri Lankans to work as freelancers and earn money, potentially solving the unemployment problem in the country.
Additionally, he pointed out that physical on-demand services such as Uber and PickMe were considered part of the gig economy.
“People do not need extensive technological knowledge to participate; they just need the skills and knowledge to use the platform. This inclusivity allows more people to be part of the economy,” Tharaka pointed out.
“There is also a trend among retired people in the country, which involves them looking for freelancing opportunities. We can utilise their expertise and knowledge to generate income for the country,” he said.
Improving dollar income
“Freelancing also helps to solve the dollar issue in our country and the income potential is very high. Freelancers earn money in dollars from other countries. Over 90% of this income is tax-free, which also helps address our dollar issue,” Tharaka highlighted.
According to Tharaka, in 2022, the ICTA conducted a survey in collaboration with the freelancing community in Sri Lanka, revealing that there were nearly 150,000 freelancers in the country. He revealed that out of the 450 survey participants, around 2% of youth aged 20-35 earned more than $ 10,000 per month and more than 16% earned between $ 5,000-10,000 per month.
Acknowledging the significant national value and economic potential of freelancing, the ICTA initiated the National Freelancer Development Endeavour. This initiative seeks to equip Sri Lankan youth with the necessary skills, mindset, and digital proficiencies to thrive in freelancing, enhancing their socioeconomic standing and alleviating unemployment and poverty. The primary objective is to strengthen the contribution of freelancers to the national digital economy, aiming to reach a target of $ 3 billion by 2024.
Online payment systems
The Sunday Morning also spoke to Ministry of Technology Director – Development and Sri Lanka Computer Emergency Readiness Team (SLCERT) Acting Chairman Janaka Sampath Geekiyanage about the gig economy’s payment transactions, especially in the freelancing network.
“Many freelancers and businesses have been requesting PayPal and other similar services to be accessible in Sri Lanka for a long time. The issue has been raised several times with the CBSL, as it is the institution managing the matter. The CBSL has acknowledged the concern and indicated that it is taking actions to address it,” Geekiyanage said.
“It’s beneficial for a country to develop the gig economy, as the freelancing community in Sri Lanka brings a significant amount of money into the country,” said Geekiyanage, highlighting that although the numbers were sometimes not accurately captured in CBSL reports, they were making a valuable contribution to the economy.
Part of the NDS
“There is a high potential for the development of the gig economy in the country. Many individuals have started as freelancers and progressed to establish and run Information Technology (IT) and Business Process Outsourcing (BPO) companies locally. Therefore, the potential for gig economy development is significant and it is integral to the digital economy strategy,” Geekiyanage said.
One of the strategies of the NDS is ‘infrastructure, connectivity, and access,’ which plans to define rules and create initiatives to expand access to affordable broadband sustainably.
“We are discussing the provision of strong internet services and 4G broadband access islandwide. Some freelancers of the gig economy are located in remote and rural areas in Sri Lanka, so we need to ensure reliable broadband access to these regions,” Geekiyanage noted.
According to him, they also focus on security and financial payments, including strengthening the Government payment system and other economy-related services. He noted that the aim was to provide citizen-centric services more effectively by enhancing connectivity with the Government.
“There is a focus on developing SMEs and the education sector related to the IT industry as well. This is because we need individuals with a focus on the IT industry for the gig economy due to the significant potential in that sector,” he said.
Greater flexibility
Speaking to The Sunday Morning, independent cybersecurity consultant and privacy advocate Asela Waidyalankara highlighted the key features of the gig economy, which were its flexibility and technology-driven nature, offering short-term engagements and a diverse range of opportunities. He added that this attracted a specific demographic of people seeking flexibility and opportunities.
In Sri Lanka, smartphone penetration and digital literacy are on the rise, accelerated by the Covid-19-induced shutdown in 2020 which pushed many people towards digital platforms and internet usage, Waidyalankara highlighted.
He said the upward trajectory of digital literacy and smartphone ownership presented an opportunity for people to utilise the gig economy.
Commenting on the opportunities related to the gig economy in Sri Lanka, he said: “The gig economy provides work opportunities for individuals who may not have them in the traditional economy. For example, someone driving a three-wheeler may not have the educational qualifications for corporate employment but can contribute to the economy through platforms like Uber and PickMe, generating income and employment opportunities.”
Importantly, with more than 50% of the population being women, he highlighted that the gig economy provided equal opportunities for women and served as a great equaliser in terms of economic participation.
According to Waidyalankara, many individuals working exclusively on platforms such as Upwork earn foreign income in the country. This presents a unique opportunity as foreign income, through cross-border transactions, is directly remitted to local accounts without taxation, providing better earning opportunities than traditional employment.
Additionally, he pointed out that individuals often earned higher hourly rates than in traditional employment, irrespective of sector, with a wide range of job opportunities available on platforms like Fiverr and Upwork, including writing, designing, copywriting, and other tasks.