Chart Alert: The rise of 'gig' economy in Saudi Arabia

Labor Markets in the Kingdom of Saudi Arabia are undergoing a rapid transformation. Algorithm Research recently conducted a digital roadtrip to the Kingdom. We used AI to analyze billions of searches made by residents in the country and found new consumption and investment patterns emerging in the largest nation in the Gulf Cooperation Council (GCC).


This chart alert highlights the changing nature of the Saudi Arabian labor market as it moves from traditional employment towards a gig economy. This may be still at a nascent stage. COVID-19 related movement restrictions and a higher VAT rate (15% versus 5% in the rest of the GCC) likely catalyzed the growth of the 'gig' economy as workers looked for avenues to diversify income streams.

Source: Google, Algorithm Research.


Firstly, a Google search for 'jobs' itself have been on a downward trend since 2015. This is likely because the use of internet has vastly expanded from merely looking up jobs to everything from recipes to flight and hotel deals and lately to discovering more on the coronavirus. When we dug deeper to investigate what the Saudi residents were looking up about 'jobs' we discovered that the rising online searches were for keywords like 'jobs near me', 'upwork jobs' and 'unusual jobs'. All of these indicate a growing interest in freelancer jobs or side hustles to supplement incomes for current jobs. Now, 'rising' keywords are those that have become popular recently and 'top' keywords are those that have historically been searched extensively enough to top the charts. Given that 'upwork jobs' and 'unusual jobs' are rising keywords searched by residents, it is evident that COVID has hastened the previously nascent 'gig economy' in the Kingdom.



What does the rise of a 'gig' economy mean for Saudi Arabia?

Traditionally, the Kingdom's largest entities have been State or State-owned entities providing traditional employment opportunities. This has led to a spiraling wage bill for the State that may not be sustainable specially in the context of softer oil prices. The gig workers are usually experts in their domain and as they are non-permanent workers in an organization, they help keep overheads low while increasing efficiency. This is a welcome change as the Kingdom looks at diversifying its economy away from oil and is encouraging more private companies (and startups) to take advantage of its drive for economic diversification. The gig economy helps workers monetize their hobbies and supplement their incomes.

As with most things, the 'gig' economy has its flip sides too. It is believed that popularity of contractual and temporary work will likely erode the traditional economic relationships between workers and businesses over the medium term.



For a detailed report on Saudi Arabia, visit here.

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