5. The spread of digital platforms has raised concerns about the changing nature of employment status, ushering in a more flexible workforce and eroding traditional employer-employee relationships. Blurring lines between formal and casual employment, characterized by independent or temporary work arrangements (such as on-call workers, contract workers, or freelancers) could be problematic. Workers face the risk of insecure working environments. Beyond occupations in transportation such as drivers or delivery, these platforms are affecting other occupations ranging from arts and design, media, and communication to other services. The growth of digital platforms has expanded the share of workers performing on-demand tasks—the so-called gig economy. With its allure of flexibility and compensation (Hall and Krueger 2018), the gig economy has grown exponentially and helped workers buffer against income and expense shocks (Farrell and Greig 2016). The incidence of alternative work arrangements has been rising in the United States, with the share of all workers growing from 10.7 p ercent in 2005 to as high as 15.8 p ercent in late 2015 (Katz and Krueger 2019). 6. Enlyft is a private digital platform providing a database on B2B technology based on machine learning. 7. The BPS is an initiative led by the World Bank Group to collect and harmonize firm-level data to understand the impact of COVID-19 on the private sector in developing countries. ApedoAmah et al. (2020) summarize the first round of data collection. The severity of the effect of the COVID-19 shock on businesses has been well documented across countries and data sources. See Adams-Prassl et al. (2020); Bartik et al. (2020); Dai, Hu, and Zhang (2020); Fairlie (2020a, 2020b); and Humphries, Neilson, and Ulyssea (2020). 8. The average drop in sales in the first four weeks following the peak of the shock is between 60 percent and 75 percent. In the next four months, the drop in sales narrowed to 47 percent in week 8, 47 percent in week 12, and 43 percent after week 16. Although nearly 90 percent of businesses were open 10 weeks after the peak of the outbreak, the negative impact on sales still loomed large. 9. This section is based on Avalos et al. (forthcoming), a background paper for this volume. 10. This section is based on Comin et al. (2022), a background paper for this volume. 11. One standard deviation in pre-pandemic technology sophistication is associated with an increase of 10 percentage points in the likelihood of starting or increasing the use of digital technologies. Firms whose technology sophistication index is one standard deviation (0.62 percentage points) higher than the average (1.78) tend to rely on specialized software to perform business administration or production planning and sourcing; online chat or internet to interact with customers; debit/credit card and online payment; and computers for quality control. Firms whose technology index of 2.78 is 1 percentage point higher than the average tend to be very close to the frontier in performing tasks such as business administration and planning (for example, use ERP systems) and use basic to more sophisticated digital technologies in all other GBFs.
References Adams-Prassl, A., T. Boneva, M. Golin, and C. Rauh. 2020. “Inequality in the Impact of the Coronavirus Shock: Evidence from Real Time Surveys.” Journal of Public Economics 189 (September): 104245. Adhvaryu, A., N. Kala, and A. Nyshadham. 2020. “The Light and the Heat: Productivity Co-benefits of Energy-Saving Technology.” Review of Economics and Statistics 102 (4): 779–92. Anderson, M., and J. Magruder. 2012. “Learning from the Crowd: Regression Discontinuity Estimates of the Effects of an Online Review Database.” Economic Journal 122 (563): 957–89. Apedo-Amah, M. C., B. Avdiu, M. Cruz, X. Cirera, E. Davies, A. Grover, L. Iacovone, U. Kilinc, D. Medvedev, F. O. Maduko, S. Poupakis, J. Torres, and T. T. Tran. 2020. “Unmasking the Impact of COVID-19 on Business: Firm-Level Evidence from around the World.” Policy Research Working Paper 9434, World Bank, Washington, DC.
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