Online talent platforms economic impacts in the United States, the United Kingdom, Germany, Japan, China, India, and Brazil

Online talent platforms are increasingly connecting people to the right work opportunities. By 2025 they could add $2.7 trillion to global GDP, and begin to ameliorate many of the persistent problems in the world’s labor markets, write James Manyika, Susan Lund, Kelsey Robinson, John Valentino, and Richard Dobbs in a report issued by McKinsey Global Institute.

Labor markets around the world haven’t kept pace with rapid shifts in the global economy, and their inefficiencies have taken a heavy toll. Millions of people cannot find work, even as sectors from technology to healthcare struggle to fill open positions. Many who do work feel overqualified or underutilized. These issues translate into costly wasted potential for the global economy. More important, they represent hundreds of millions of people coping with unemployment, underemployment, stagnant wages, and discouragement.

Online talent platforms can ease a number of labor-market dysfunctions by more effectively connecting individuals with work opportunities. Such platforms include websites, like and LinkedIn, that aggregate individual résumés with job postings from traditional employers, as well as the rapidly growing digital marketplaces of the new “gig economy,” such as Uber and Upwork. While hundreds of millions of people around the world already use these services, their capabilities and potential are still evolving. Yet even if they touch only a fraction of the global workforce, we believe they can generate significant benefits for economies and for individuals.

In our new McKinsey Global Institute report, A labor market that works: Connecting talent with opportunity in the digital age, we examine the current state of employment and the impact these digital platforms could have:

  • In countries around the world, 30 to 45 percent of the working-age population is unemployed, inactive in the workforce, or working only part time. In Brazil, China, Germany, India, Japan, the United Kingdom, and the United States, this adds up to 850 million people.
  • As online talent platforms grow in scale, they will become faster and more effective clearinghouses that can inject new momentum and transparency into job markets while drawing in new participants. Our supply-side analysis shows that online talent platforms could add $2.7 trillion, or 2.0 percent, to global GDP by 2025, while increasing employment by 72 million full-time-equivalent positions.
  • Up to 540 million people could benefit from online talent platforms by 2025. As many as 230 million could find new jobs more quickly, reducing the duration of unemployment, while 200 million who are inactive or employed part time could gain additional hours through freelance platforms. As many as 60 million people could find work that more closely suits their skills or preferences, while an additional 50 million could shift from informal to formal employment.
  • Countries (such as Greece, Spain, and South Africa) with persistently high unemployment and low participation rates could benefit most. Among advanced economies, the United States stands to realize significant gains because of the relative fluidity of its job market. By contrast, the potential is lower in China and Japan as a result of their low unemployment and other barriers that limit adoption.
  • Online talent platforms increase the transparency of the demand for skills, enabling young people to make better educational choices. As a result, more effective spending on tertiary education could reduce some of the $89 billion misallocation we find in Brazil, China, Germany, India, Japan, the United Kingdom, and the United States.
  • Companies can use online talent platforms not only to identify and recruit candidates but also to motivate them and improve their productivity once they start work. We calculate that the adoption of these platforms could increase the output of companies by up to 9 percent and reduce the cost of recruiting talent and of human resources generally by as much as 7 percent.

Online talent platforms will not create the same kind of impact in every economy. The potential varies greatly depending on each country’s starting point in terms of demographics, labor market characteristics, digital infrastructure, and patterns of consumption. This supplement to the McKinsey Global Institute report A labor market that works: Connecting talent with opportunity in the digital age describes these variables and how they affect our estimates of the economic potential in seven of the world’s largest economies. McKinsey

For any country, GDP can be determined by multiplying the amount of valued-added output per worker (also called labor productivity) by the number of workers actively employed in the economy. Online talent platforms have the potential to influence the number of people employed and hours worked by reducing job search time and enabling people out of the workforce to find meaningful freelance or part-time work. They also increase labor productivity by creating better matches between workers and jobs, and by shifting people from informal to formal employment. (See the separate technical appendix for a more detailed discussion of how digital platforms raise GDP and employment.

Our analysis began with a detailed examination of the seven countries covered in this appendix: the United States, the United Kingdom, Germany, Japan, China, India, and Brazil. These economies account for approximately 60 percent of world GDP and 50 percent of the world’s population; they represent a mix of advanced and emerging economies as well as very different labor markets and demographic conditions. The indicators affecting GDP and employment in each country are described below, along with our projections for how online talent platforms could increase GDP and employment by 2025—all of which are based on conservative assumptions.

Advanced economies are environments that are ripe for online talent platforms to take off. They have more sophisticated and extensive digital infrastructure as well as higher Internet penetration, which creates conditions for greater impact. They also have more educated and productive labor forces overall, so the output that can be captured by raising employment or enabling better matches between workers and jobs is higher. Talent platforms are expanding into emerging economies as well. But these countries are starting with lower levels of education, output per worker, and wages as well as lower Internet usage (although mobile usage in particular is rising rapidly). These factors tend to dampen the potential of online talent platforms to raise GDP and employment. However, for many countries, these factors are more than offset by the larger opportunity for emerging regions to shift people out of informal employment and into formal work.

By 2025, online talent platforms could raise US GDP by 2.3 percent, United Kingdom’s GDP by 2.0 percent and Germany’s GDP by 1.7 percent.

Chosen excerpts by Job Market Monitor. Read the whole story at Country appendix connecting talent with opportunity in the digital age | McKinsey & Company


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