The philosopher Jiddu Krishnamurti said, “One is never afraid of the unknown; one is afraid of the known coming to an end.”
He probably wasn’t referring specifically to the future of the economy when he said it. Nonetheless, his observation is highly relevant to the tangle of conflicting theories about the effects of the growing gig economy on our current model.
The gig economy is changing the shape of the global workforce. Freelancers are the fastest-growing labour group in the European Union and have been since 2000. In the United States, freelancers represent 35 per cent of the working population and could constitute more than half of the country’s workforce by 2027.
The implications of this sea change on the global economic landscape will be decided by the same subtleties of character that inspired Krishnamurti. The emerging data-supported outlook suggests that, not unlike the human condition, the answer is perhaps a paradox: predictable and unfathomable at the same time.
Work in Progress
Although the gig economy is often conflated with the sharing or collaborative economy, the explicit distinction lies in the work itself. Gigs are finite, often temporary tasks. For the most part, this work exists on a part-time basis, although full-time gig workers are on the rise, constituting as much as 13 per cent of the workforce in the US. Gigs vary greatly – from making deliveries to cleaning houses and coding software. Digital communication and communities play an integral role; transaction platforms like Fiverr, UpWork, Uber and Foodora are among a host of online portals connecting workers to their assignments.
The sharing economy, on the other hand, tends to revolve around renting underused assets, usually real estate or transportation, for short periods. Some of the most significant players in the sharing space are Airbnb, Lime, JustPark and Zipcar.
That said, the gig economy and the sharing economy overlap. For example, gigs are frequently offered in support of a sharing activity. California-based transportation rental company Lime shares its battery-powered scooters and bikes in 26 countries around the world. The task of charging Lime’s batteries, however, falls to gig workers, freelancers known as Lime Juicers who locate and recharge the company’s vehicles. Arguably, Uber drivers straddle both definitions utilising their underused vehicles in conjunction with a driving gig.
“Anywhere-anytime connectivity has given birth to the Human Cloud; labour is performed remotely and on demand.”
The definitions are fluid, but technology is the catalyst in both cases. Anywhere-anytime connectivity has given birth to the Human Cloud; labour is performed remotely and on demand. The digital facilitators that drive the gig economy are embraced in particular by Millennials, but data points to their adoption becoming heterogeneous across the demographic spectrum.
As technology evolves and our digital connections become increasingly intimate, there are those in the workforce leaving conventional salaried positions for freelance work. Often, lifestyle is a factor.
In turn, conventional companies are looking to the gig economy‘s methodology to revolutionise their operations. Their employees might thank them: according to a recent poll of United Kingdom workers, flexible hours and flexible working locations contributed to greater job satisfaction and productivity. Hiring freelancers makes complete economic sense for companies, but leveraging the same collaborative technology internally to give workers more freedom also has its benefits.
Gigging and Entrepreneurship
Entrepreneurship is the backbone of family business, and nearly 20 per cent of entrepreneurs around the world work with family members. Not only does the gig economy provide people with the personal tools that entrepreneurship requires as well as a taste of the self-employed lifestyle, but it also serves as an income-generating safety net for those transitioning from regular employment to self-employment. Many freelancers turn to the gig economy when recruiting talent for their small businesses, securing cost-effective, temporary and skilled freelancers from the same pool that they work in.
The gig economy is redefining what it means to be an entrepreneur. Gigging platforms offer workers the same independence and flexibility once strictly associated with entrepreneurship. Also, gig workers are sometimes tasked with the same demands that entrepreneurs might experience while building their businesses from the ground up.
So, does this grey area between entrepreneurship and gig economy workers mean more entrepreneurship and more family companies? Possibly, but not in the way some might expect.