Fact: the global coffee industry brings in $5.5B dollars for developing countries each year.

While it is a $70B international industry, only about $5B of that revenue is actually captured in developing countries.

Fact: Third-party-gaming—eg. Asian virtual workers prepping ‘World of Warcraft’ characters for Western players to purchase and play—was estimated to bring $3B dollars of revenue for developing countries in 2009.

Workers in countries like Vietnam, China and Malaysia were prepping characters for the online role-playing game–decking them out with equipment and virtual currency.

At the same time, other virtual work–from pattern recognition, to commenting, to social networking was on the rise and by now may be a multi-billion dollar industry.  Unfortunately, methodologies for gathering this kind of information has a lot of lag-time.  One thing that we can be sure of: digital labor is blowing up in developing economies in 2011.

So, in other words, third party gaming makes about 60% as huge of an economic impact in developing countries as coffee does–without any of the environmental costs or repressive labor rights issues attached to that money.  When I read these figures in a recent World Bank Study—Knowledge Map of the Virtual Economy—it sort of took my breathe away.

I have always been an advocate of the whole Fair Trade Coffee ethos in a general way, and of Fair Trade Coffee in particular.  And I remain a huge advocate for putting consumer pressure on brands to push them towards fair labor practices.  But when I read these stark figures, it drove home for me the fact that a huge strata of the solutions to Global Poverty will come from totally unpredictable quarters.  Like-third-party gaming and digital-labor in general.

Global Economy

does the digital economy hold the key to a more stable global economy in developing countries?

There are many ways that developing populations are tapping into the most recent, social media related, internet boom.   Industries like Facebook app development, content uploading and link building are thriving in places like Thailand, Malaysia and even Vietnam. As initiatives like One Laptop Per Child continue to advance, and cloud computing technology continues its ascendancy, these trends are only likely to accelerate.  Mobile analytics tell us that online access is becoming more universal, more distributed and less tied to desks and offices.

It takes a lot of person power to keep a social presence alive and growing–outsourcing it is far from an old solution. The amount of work available, however, has become so massive that the digital economy is its own force for many of these (primarily East Asian) countries’ operation.

Things like branding, strategy and marketing need to be done from an offices’ home base but many more “micro tasks” are needed to be done and can be accomplished from anywhere with an Internet connection.

Digital micro-workers are uploading a myriad of content, managing comments, tagging and generally taking care of whatever tedious or low skill tasks that internet heavy hitters need. They may even ghost write or do some editing, but the micro-worker is usually unskilled and only needs to be able to use a mouse. There are even people who’ve been employed by the gaming industry to play online just to create a larger and more constant network for their customers. Some networks even support “players-for-hire,” where a professional gamer is hired to play a customer’s account for a few hours, days or even weeks and level-up their character. In fact, third party gaming brings in around three billion dollars to China and Vietnam.

Clearly, this boom in digital business creates jobs in developing countries—but is it ethical?

Unfortunately, with the cheap labor that normally comes from outsourcing, an unsafe work environment can also be part of the cost cutting equation. Sweatshops, in fact, have become a buzzword in the argument against outsourcing. Luckily, however, with the rise of the digital economy far less physically taxing work can be available for the non-skilled eastern worker. It isn’t that micro-working cannot become challenging, but it is without the physical demands that something like farming or factory working would offer. It is more environmentally friendly work, too. An email takes just as much CO2 to send across town as it does across the world. A boatload of tennis shoes, however, is not the same story.

When the World Bank published the 2011 report, “Knowledge Map of the Virtual Economy” is stated the starting rates for gaming studio workers were varied, coming-in anywhere from $0.60 to $13.40 per hour based on the task. Frankly, $0.60 an hour seems awfully low, but those are by Western standards. Currently, Beijing’s minimum wage is only $1.70 per hour—which is surely higher than most because it’s such an urban area.

Outsourcing large portions of a digital economy does remove jobs from its home country but greatly stimulates the Global Economy. By using the unskilled workers of foreign shores, Internet savvy businesses are growing their influence more cheaply and effectively. Gaming studios and Internet offices can offer a safer work environment than more labor intensive trades and the demand for work is high enough that these foreign hubs can thrive. Overall, the use of unskilled micro-workers seems to benefit not only the economy of developing countries but also helps grow the reach of the Western digital world.

 

Image: jscreationzs / FreeDigitalPhotos.net

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