Informal Employment, the Social and Solidarity Economy, and digital transformation

The majority of workers around the world (over two billion workers, or 58% of the global labor force) are informally employed.  Vulnerable populations living in developing countries: women, youth, persons with disabilities, and migrants, are the most likely to be in informal employment.  A lack of job security and social protection, combined with precarious working conditions and low, irregular, earnings, exacerbates these vulnerabilities perpetuating cycles of inequality.

The challenges associated with informal employment are not new.  However, as populations grow and economies fail to create formal jobs at the pace that workers enter the labor force, innovative and inclusive approaches are urgently required.

The social and solidarity economy (SSE) is a grassroots movement that empowers communities and addresses the inequalities affecting marginalized groups.  It aims to reduce the vulnerability of informal workers by organizing workers into cooperatives, formalizing some enterprises, and expanding access to community-led social protection schemes.  While the SSE does not replace government-led universal social protection, it can act as a bridge towards a more inclusive society.

Technology and digital transformation are powerful tools that can accelerate the benefits of the social and solidarity economy and the inclusion of vulnerable populations, including persons with disabilities (PWD).

Digital registries can increase the visibility of previously unseen informal workers.  E-commerce platforms and digital cooperatives can expand market access, support certification, and boost profitability.  Enhanced access to digital financial services can enable community investment in profitable ventures, offer insurance against shocks, and support inclusion into contributory social insurance programmes.  Online training programmes can improve the efficiency and profitability of cooperatives and SMEs.  And when apps or platforms are made in an accessible format, they can reduce travelling distances for persons with mobility impairments, or can foster the inclusion of previously excluded persons with audio, visual, or intellectual disabilities.

However, embracing accessible digital transformation within the social and solidarity economy will not automatically translate into formal employment creation or the inclusion of persons with disabilities.  While digital transformation can increase profitability and skills, formalization requires both time and deliberate incentives.  Including previously excluded populations, such as persons with disabilities, also requires additional outreach efforts that build awareness of new digital platforms and understanding of how best to utilize them.  A digitalized social and solidarity economy must therefore be complemented by a supportive policy environment that makes formalization an attractive option and that specifically targets the most vulnerable populations.

Where are we today?

In Arab and Islamic countries, informal employment ranges approximately from 37% of the labor force to 94%. This figure is not available for persons with disabilities, as the general condition of persons with disabilities in some societies is invisibility.

Nonetheless, many successful examples show how digital transformation can support the social and solidarity economy, and encourage greater inclusion and formalization such as:

Adopting Laws on the Social and Solidarity Economy. Can promote the co-existence of public, private and social economy institutions, and foster the economic and social inclusion of disadvantaged populations by encouraging them to associate in cooperatives, mutual organizations or self-help groups. A number of initiatives have been launched to support the implementation of these laws, to strengthen SSE entities, create decent jobs for young people, women and persons with disabilities in disadvantaged areas and support the transition to the formal economy such as JEUN’ESS.

As for digital accessibility, DOST Agency is a one-stop shop that collects all government social services together in one accessible platform. It ensures persons with disabilities can access all government services online, automatically identifies citizens entitlement for social services and payments (thereby eliminating complex requests), and offers opportunities such as capacity building and knowledge training for the unemployed, and specifically for persons with disabilities.

These are examples of many other solutions which can be scaled up and adapted to address the plight of informal workers in the region.