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News digest 14/10/16: Up to 30% of the workforce are part of ‘gig’ economy

14 October 2016 by Henry Ker

Up to 30% of the workforce are part of ‘gig’ economy - read more

The latest governance stories in the news

Up to 30% of the workforce are part of ‘gig’ economy

Up to 162 million people in Europe and the United States − or 20 to 30% of the working-age population – are engaging in some form of independent work, nicknamed the ‘gig’ economy, according to new research.

The report, by the McKinsey Global Institute, surveyed 8,000 respondents across Europe and the United States about their income in the past 12 months.

It found approximately 70−75% percent of independent earners are independent as a matter of preference. However, the remainder, classified as ‘reluctants’ (those who would prefer a traditional job) and the ‘financially strapped’ (have to ‘gig’ due to necessity and would prefer not to), still represents a worryingly high proportion. McKinsey suggests that by scaling up the results, ‘50 million Americans and Europeans are independent out of necessity, and more than 20 million of them rely on independent work as their primary source of income’.

Despite acknowledging the serious concerns about those adopting this working lifestyle out of necessity, the report highlighted potential benefits from this growing trend, saying ‘The growing prevalence of independent work could have tangible economic benefits, such as raising labor-force participation, providing opportunities for the unemployed, or even boosting productivity.’

Rapidly growing platforms such as Uber and Deliveroo have been credited with making independent working more accessible, however the report suggest only around 6% of independent workers use platforms like these.

 

Samsung to take £4.4 billion hit to profits

The total cost of removing the Galaxy Note 7 smartphone off the market will be £4.4 billion, according to its maker, Samsung.

The Note 7 has been scrapped after widespread reports of the phone catching fire. The fault is attributed to a problem with the phone’s battery. Samsung had already issued a recall of about 2.5 million Note 7s last month, over complaints about overheating and exploding batteries, however the replacement phones have experienced the same issues and Samsung has decided to end production for good.

Samsung has since stated that it will ‘focus on enhancing product safety for consumers by making significant changes in its quality assurance processes.’

 

Sky shareholders rebel over James Murdoch reappointment

Over half (50.9%) of Sky’s independent shareholders opposed the reappointment of James Murdoch as chairman at yesterday’s annual general meeting.

Mr Murdoch was re-elected by an overall vote of 71.5%, however that includes a 39% share controlled by 21st Century Fox, where Murdoch is chief executive.

The board’s decision to reappoint James as chairman ‘was unanimous and recognised that he is a highly experienced executive with extensive knowledge of the international media industry and has been a strong contributor to Sky since he joined the board in 2003’, according to the broadcaster; however, Sky has acknowledged the ‘significant vote’ against the resolution and promised to ‘engage with those shareholders who voted against the resolution’.

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