Download Free Electronic Document

FormatFile SizeNotes
PDF file 0.3 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

Rapid advances in computing and information technology are having profound effects on how economic activity is organized globally. For many production activities, widespread use of the internet means it is now possible for employers, workers, and customers or clients to be located almost anywhere in the world. In recent years, online outsourcing—whereby certain digital tasks or assignments are carried out for firms by individuals across the globe who are operating basically as independent contractors—has risen rapidly, with the only job requirements being access to a computer and a good internet connection, as well as the requisite skills. Online outsourcing encompasses both virtual freelancing, which consists of skilled tasks, and microwork, which consists of less-skilled, repetitive tasks that can be accomplished online. In this Perspective, the authors review the potential benefits and drawbacks of online outsourcing, with special reference to its potential for youth employment and poverty reduction in Indonesia. They find that although there are several significant constraints on the growth of online outsourcing as well as concerns about the extent it benefits workers, Indonesia's large size and relatively high levels of education and internet connectivity make it fertile ground for a significant expansion of online outsourcing. The right policies will be needed to facilitate this expansion while directing a good share of the benefits to lower-income workers.

Research conducted by

Funding for this study was provided by the generous contributions of the RAND Center for Asia Pacific Policy (CAPP) Advisory Board. The work was conducted within the RAND Center for Asia Pacific Policy, which is part of International Programs at the RAND Corporation.

This report is part of the RAND Corporation perspective series. RAND perspectives present informed perspective on a timely topic that address the challenges facing the public and private sectors. All RAND perspectives undergo rigorous peer review to ensure high standards for research quality and objectivity.

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.