Next wave of digital outsourcing of white collar jobs starts 3
The pandemic years set the stage for the next wave of digital outsourcing, which will mostly affect white-collar jobs.
First, remote working became the “new normal.” Second, many white-collar jobs, from office administration to legal help and design, have been digitalized via Zoom and other online collaboration platforms. Third, companies and organisations have accelerated the migration of their archives and operational assets to digital clouds.
The framework for the next wave of digital outsourcing has been set. According to the Economist, it has the potential to generate a half-trillion-dollar economy.
Digital outsourcing will happen in fast-changing circumstances with less input from Ukraine and Russia, important outsourcing and software development economies. Geopolitical tensions with China and ‘de-globalisation’ trends will affect the geography of outsourcing.
India will be the main winner of the new wave of digital outsourcing. Already, outsourcing makes up 5.6% of the Indian economy. However, it won’t be plain sailing for India’s outsourcing industry due to a few problems:
a push for outsourcing in the same region and time zone;
drive in many countries to reduce cross-border data flows, especially in critical and confidential domains;
protectionism and push for employing the local workforce.
In these circumstances, new possibilities for digital outsourcing will open for neighbouring regions to Europe (Balkans and Mediterranean) and the United States (Central and South America).
Main brands are increasingly relying on influencers to be their ambassador.
China, where influencers became more prominent earlier than in Western countries, is estimated that influencers contribute 1.4% of the country’s GDP. The Economist explains how the rapid rise in economic importance of influencers opens many businesses, regulatory and policy issues.
Influencers are becoming a strong competitor for traditional brand ambassadors (actors and sportsmen, etc.).
Influencers have a greater impact on Gen-Z who will become the major consumers in the coming years.
China will regulate influencers’ economic and Internet roles. Other regulators have plans for influencers to indicate their posts in advertisements.
On the risk side, influencers could ‘cheapen’ some brands, such as Louis Vuitton.
For advertising companies, influencers are also more difficult than traditional brand ambassadors to manage and direct
Major brands will need more influencers to help them with their advertising campaigns, despite all possible difficulties.
The second substantive session of the OEWG 2021-2025 was held from 28 March-1 April 2022, in-person in New York (with a webcast through UN WebTV). Using an informal mode, the group discussed substantive issues under its mandate: the existing and potential threats in the ICT sphere and data security; rules, norms, and principles of responsible behaviour of states in cyberspace; how international law applies to the use of ICTs by states; confidence-building measures; and capacity building.
The discussions were overtaken by an organisational issue: the modalities of stakeholder participation. The Ukraine conflict heavily impacted the discussion on threats. Importance of the existing framework of responsible behaviour was re-affirmed, yet discussions about the necessity of developing a new legally binding instrument continued. Main progress was made in the area of confidence building measures, where several proposals got general support (such as the implementation of the national survey of implementation of the UN framework, and the establishment of the points of contacts directory. Programme of Action, as a possible second process running in parallel with the OEWG, gained support of more countries, but it’s format and mandate is not clear yet.
In times of crisis, cryptocurrencies emerge as safe ways to store wealth along with gold or the Swiss Franc. For instance, the volume sold of bitcoins jumped tenfolds in Russia since the start of the war.
The effectiveness of cryptocurrencies in bypassing sanctions is less than it may be thought. Namely, cryptocurrencies lose their anonymity when they must be converted into FIAT currency (euro, USD or CHF). Crypto exchanges have to implement ‘know your customer’ (KYC) principle, the basis for anti-money-laundering regulations.The majority of crypto exchanges are located in the USA and must adhere to US sanctions laws.
The fastest and most efficient way to raise funds is through cryptocurrencies.The Ukrainian government raised over US$100 million using crypto tokens.
Finance ministers from Sweden, Poland, Malta, and Estonia have withheld their support for the compromise proposal on the Pillar Two draft directive introduced in December 2021. Although the proposed directive still lacks unanimous support, the lack of support from only four member states is an improvement over the previous Economic and Financial Affairs Council (ECOFIN) meeting in January 2022.
In between meetings, France, which is currently holding the presidency of the EU Council, offered a compromise proposal on March 12. The compromise text extended the deadline to transpose the rules into domestic law to 31 December 2023. The deadlines for other rules were also extended. Since member states requested that the implementation of both pillars of the plan be directly linked, France suggested including a statement confirming the commitment of all member states to the ongoing process on Pillar Two.
However, speaking during today’s Economic and Financial Affairs Council (ECOFIN) meeting (15 March 2022), the countries cited various concerns related to the timeframe (not enough time), and to the linking of the two Pillars (work and schedule of both Pillars need to be linked).
French finance minister Bruno Le Maire remains optimistic that an agreement is reached by the next ECOFIN meeting on 5 April 2022.
The OECD has released additional technical guidance on the 15% global minimum tax agreed in October 2021 as part of the Two-Pillar solution to address the tax challenges arising from digitalisation of the economy. The model rules on Pillar Two were published in December 2021.
Pillar Two consists of two rules intended for introduction in national domestic tax laws – together known as the Global anti-Base Erosion (GloBE) rules – as well as a treaty-based rule. The technical advice issued today is composed of a commentary to the GloBE rules, which includes clarification of certain terms to ensure consistent interpretation, and examples illustrating the rules.
Comments said that there was a need for predictability, and that any nexus rules covering companies without a a physical presence in a jurisdiction ‘should be clear, measurable, predictable, and applied consistently and neutrally across all industries and business models, and across all jurisdictions’.
Comments also reiterated the need for signatories ‘to adopt and fully implement the new consensus to ensure that all income is properly taxed only once across all applicable jurisdictions’.
According to UN statistics, there are currently over 80 million persons with disabilities living in Africa. In Ghana persons with disabilities are estimated to be 3% of the total population. In 2018, internet penetration in Ghana was estimated to be 30.8%; in 2021 it is reported to have increased to 50% penetration. The global pandemic that introduced restrictions to physical gatherings including workplaces, educational institutions, shopping opportunities, etc. all moved toward the digital space, accelerating this transition. However for the persons with disabilities in Ghana, things either remained the same or grew worse due to lack of digital access, digital literacy, financial empowerment, and other related challenges.
The OECD has released draft model rules for Pillar One of the new global tax rules, specifically the so-called nexus and revenue sourcing for Amount A. The rules are open to public consultation.
The OECD’s tax rules say that very large companies will have to pay taxes on 25% of the profit they make above a 10% threshold of revenue (this is called Amount A), and will need to pay it in those countries where they are the most economically active. Countries will therefore have the right to pocket some of the taxes (on Amount A) based on a complex formula for claiming it, and tied to economic activity and the country’s own GDP (the nexus rule).
Consultations close on 18 February 2022.
The implementation of Pillar Two is ahead of Pillar One; the OECD released the model rules for Pillar Two in December 2021.
