The Contribution of the Gig Economy to the National Economy and Creating Green Jobs and Increasing Productivity in Indonesia

Executive Summary

Indonesia is at a critical juncture in its economic development, marked by a convergence of the digital revolution and an urgent transition towards a sustainable and green economy. This report provides a comprehensive analysis of the role of the gig economy in this transition, going beyond a mere assessment of its economic contribution to a strategic assessment of its potential to drive national productivity, create green jobs, and enhance global competitiveness.

Analysis shows that the gig economy is a significant and growing force in Indonesia, with the workforce estimated to reach millions of people and the digital economy projected to contribute more than $100–130 billion to the national GDP by 2025. However, this rapid growth presents a paradox: while offering flexibility and income opportunities, it also deepens labor informality, creating vulnerabilities in social protection and income stability.

This report argues that if strategically directed, the gig economy could be a powerful catalyst for Indonesia's green transition—particularly by providing flexible labor for a decentralized circular economy and by enabling agile transfer of “green-enabling” skills such as freelance Green Productivity (GP) and ESG consulting.

The main strategic proposal is to formally integrate the Ministry of Manpower's Green Productivity (GP) competency certification into the Ministry of Environment's PROPER program. This would turn GP into a valuable corporate asset, stimulating market demand for green skills and strengthening environmental performance.

Introduction: The Context of Indonesia's Economic Transition

The Gig Economy as a Disruptive Force

The global economy is undergoing a profound transformation, driven by technological innovation and shifting labor dynamics. At the center of this change is the gig economy, a labor market model that leverages digital platforms to facilitate short‑term, task‑based, and flexible work. In Indonesia, this phenomenon has grown rapidly since around 2015, fueled by high internet and smartphone penetration, enabling on‑demand services, e‑commerce, and online freelance work.

Integrating National Ambitions

The emergence of the gig economy coincides with Indonesia's ambitions toward Indonesia Emas 2045 and its climate commitments (ENDC and the NZE 2060 vision). A critical requirement is a sustained increase in national productivity and competitiveness, particularly within ASEAN competition and fluctuating global rankings.

Main Thesis of the Report

With coherent policy, the gig economy can catalyze green jobs, labor and industrial productivity (including AI‑enabled efficiencies), and global competitiveness. Success hinges on addressing social protection and integrating this labor model into productivity and sustainability frameworks.

Research Methodology

Approach and Scope

Literature review and comparative case synthesis across Indonesia, Singapore, United States, Australia, EU, China, Japan, and South Korea: policy documents, government reports, international publications, industry white papers, academic literature, and best practices.

Period and Source Criteria

Publications up to 15 September 2025; primary sources prioritized, with transparent referencing for quantitative claims.

Analysis and Synthesis Process

• Collecting and verifying key quantitative claims.
• Compiling comparative tables across countries: market size, sectors, policies, productivity and green jobs impact, and relevance for Indonesia.
• Embedding the APO Green Productivity (GP) approach and PROPER mechanism into policy recommendations.

Limitations

• Heterogeneous definitions of “gig worker”.
• Limited longitudinal primary data in some jurisdictions.
• Desk‑based research—field surveys/pilots recommended in implementation.

Ethics and Validity

All sources are listed; quantitative claims used only when verifiable. Links provided in the appendix.

The Gig Economy in Indonesia: A Strategic Economic and Social Force

Scale, Scope, and Economic Contribution

Estimates of gig workers vary widely (hundreds of thousands to several millions), reflecting definitional differences and rapid growth. The digital economy—closely linked to gig work—is projected at > $130 billion by 2025, with on‑demand services contributing significantly to GDP (e.g., ~IDR 91.7 trillion in 2023).

Social and Structural Challenges: The Paradox of Opportunity and Uncertainty

While offering flexibility and income opportunities, gig work often deepens informality. Income volatility, limited social protection, and algorithmic management pressures create vulnerability and "digital informality". Only a small portion of informal workers are covered by social protection, raising questions on the alignment with "decent work" criteria for green jobs.

Benefits and Challenges of the Gig Economy in Indonesia

Benefits

• Economic Contribution: large and growing digital economy; sizable GDP effects of on‑demand sectors.
• Low Barriers & Inclusion: access for those without formal qualifications; supports women and persons with disabilities.
• Flexibility: schedule control and potential work–life balance benefits.
• Financial Inclusion: bank/digital wallet access often improves through platform participation.

Challenges

• Unstable livelihoods: below‑living wages after costs; volatile income.
• Informalization: independent‑contractor status limits access to benefits; low social protection coverage.
• Worker protection: algorithmic management, low transparency, limited recourse.
• Inequality: gendered sector segmentation and wage gaps; “race to the bottom” in global online markets.

The Gig Economy as a Driver of Green Jobs and the Circular Economy

Definition of Green Jobs in the Indonesian Context

• New & Emerging: e.g., solar/wind technicians.
• Renewed Jobs: conventional roles adopting sustainable practices.
• Green Support Jobs: enabling roles (ESG Analysts, Green Finance, GP Specialists).

The gig economy contributes most to greening and green empowerment via flexible, project‑based labor.

Mapping the Role of the Gig Economy in Green Job Creation

Circular Economy: From Waste to Value

Startups leverage gig models to formalize informal waste supply chains, connecting households/businesses with local collectors via apps, creating transparent, end‑to‑end systems and enabling reverse logistics.

Professional Services Supporting the Green Economy

Freelance sustainability/ESG consultants and GP specialists provide project‑based expertise to firms, especially MSMEs—bridging human‑capital gaps for the green transition.

Table 1: Mapping the Role of the Gig Economy to Green Jobs and the Circular Economy Sector

Digital Transformation and AI: The Productivity Engine

DX underpins platform work, reducing transaction costs and enabling efficient matching. AI both automates routine tasks and augments high‑skill roles, improving throughput and accuracy. The gig economy, as a natively digital model, is positioned to be an early AI adopter aligned with APO’s productivity agenda.

Global Case Study: Productivity and Labor Impacts

Across ASEAN, APEC, the US/EU, and North‑East Asia, outcomes vary by structure and regulation. Singapore emphasizes skills and certification; Australia and the EU push for protections; China and Korea highlight algorithmic and welfare risks; Japan uses gig work to mitigate demographic pressures.

The Role of the Asian Productivity Organization (APO)

APO promotes productivity for socio‑economic development across 21 members, including Indonesia—advancing digital transformation and Green Productivity (GP) through methodologies, tools, and capacity building.

Strategic Synergy: Linking the Gig Economy, Green Productivity, and PROPER

The Gig Economy as a Catalyst

To transform gig activity into sustainable productivity gains and green jobs, policies must link platform work to GP practices, portable social protection, skills certification, and environmental performance incentives via PROPER.

Policy Recommendations

• Adopt a national roadmap for Platforms & Green Productivity (Kemenaker, KLHK, Bappenas; with APO technical support).
• Pilot portable benefits for gig workers (start with transport & delivery).
• Promote low‑carbon last‑mile logistics (EV subsidies; green procurement).
• Integrate GP‑certified freelancers and platform‑led green projects into PROPER “beyond compliance”.
• Implement national micro‑skills certification aligned to APO/WSQ; link to financing access.
• Require algorithm transparency and formal complaint mechanisms.

Green Productivity (GP) Framework

GP is a holistic APO strategy to improve productivity and environmental performance (economic, environmental, and social). The “Success in Six Steps” PDCA‑based methodology: Getting Started; Planning; Developing/Evaluating/Prioritizing GP Options; Implementing; Monitoring & Evaluation; Ensuring Sustainability. Tools include eco‑mapping and 3R. In Indonesia, the Ministry of Manpower (PCAP) is APO‑accredited to certify GP Specialists.

PROPER Framework: From Compliance to Excellence

PROPER rates environmental performance (Black/Red/Blue/Green/Gold) across compliance and beyond‑compliance dimensions (EMS, resource efficiency, emissions, eco‑innovation, community development). Green/Gold confer reputation, efficiency, and financing advantages.

Proposed Integration: Freelance GP Experts and PROPER

Integrate certified GP professionals as a prioritized criterion in PROPER’s "Beyond Compliance" assessment. This adds a leading indicator of capability, complementing lagging indicators (e.g., CO₂ tonnage reduced). It creates a positive cycle: demand signals → demand creation → skills supply → performance improvement.

Table 2: PROPER–GP Synergy Matrix

Conclusion and Integrated Action Roadmap

Conclusion

The gig economy is a strategic asset that can catalyze productivity, green job creation, and competitiveness. Policy alignment—especially integration of GP certification into PROPER—creates powerful market signals that elevate capabilities and outcomes.

Integrated Action Roadmap

Policy and Governance

Establish a National Task Force on Green Jobs and the Gig Economy (coordinating ministries; mandate to harmonize regulations and budgets).

Human Resource Development

• Accelerate Green SKKNI development and integration for key green professions; modular and flexible micro‑credentials.
• Integrate Green SKKNI into SMK/BLK curricula; fiscal incentives (super deductions) for apprenticeship/training aligned with Green SKKNI.
• Expand LSP Produktivitas reach and lower certification costs to include non‑metro cities and individual gig workers/MSMEs.

Investment and Incentives

• Green public procurement: prioritize firms employing certified green professionals (including freelancers).
• “Green Gig Fund”: microloans/subsidies for green assets (EV two‑wheelers, recycling equipment, green services kits).
• Formal PROPER integration of certified green professionals.

Appendix A: Country Comparison on the Gig Economy, Productivity, and Green Jobs

References