Monday, June 04, 2012

Uptake of systems like Amazon's `Mechanical Turk' in India

I have long been aware of Amazon's `Mechanical Turk', a mechanism through which tasks are farmed out to a large bank of humans. Each human worker has full flexibility on how many hours are worked and when. From the customer's point of view, Amazon supplies an API and access to a very large pool of humans who can perform small tasks. The median wage is $1.4 or Rs.80 per hour. In effect, Amazon has created a large market through which workers can find work, and firms can find workers to perform well defined tasks.

In a recent issue of The Economist, I was surprised to discover (a) that Amazon's Mechanical Turk has 0.5 million workers and (b) that roughly a third are from India. That's roughly 150,000 persons in India who are plugged into Amazon's Mechanical Turk. We don't know how many hours/week are spent in doing labour supply, but it's still a lot.

There are a few other such systems also. Here are links for exploration: oDesk, CrowdFlower, Elance, Amazon's Mechanical Turk.

These mechanisms add up to a whole new world for the functioning of the labour market. For first world customers who would like to connect up to cheap labour in India, our traditional view was that there had to be a man in the middle - a Datamatics or a TCS or an IBM. What these new systems seem to suggest is that for a certain class of tasks, it is possible to disintermediate the Datamatics or TCS or IBM.

For many individuals in India, the flexibility of working from home without rigidity about how many hours are supplied, and when, these systems could be a big win. At present, many households do not have computers and broadband connections, which is an important impediment. But this is also a constraint that is being rapidly eased through 3G, LTE, etc. These developments, put together, could become a whole new chapter in the story of India's connecting up to globalisation.

3 comments:

  1. Currently, this mechanism would prove to be a boon for the working middle-class in India, those who are affected the most by both, high inflation and the current petrol price-hike. If made more popular, I believe people will think twice before paying through their nose to step out for work. Needless to say for working moms and handicapped people, this is a gold mine.

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  2. This is just a new way of outsourcing now known as "Crowdsourcing". But it is too be seen it will help rural India or will be an additional source of income for urban middle class. Also to be seen is how long India will have this cost arbitrage.... India is loosing it to other countries as Phillipines and Sri Lanka.

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  3. This great for the lower middle class but of no help to the vast masses who are just too poor, uneducated and illiterate.

    The same problem is seen with respect to smartphones. The varied languages and the fact that the vast majority are uneducated and mostly illiterate means that they are never going to figure out how to use one. This is a problem faced by mobile phone firms already.

    The IT revolution is simply going to skip the vast majority of Indians.

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