As an early operator in the #GigEconomy, I am gratified by the ways in which it has grown. This year in particular, I have to say there is much about which to be grateful at this time of giving thanks. Here are five things to consider
1, Workers in developing countries are seeing real benefits.
A recent article published by the Oxford Internet Institute showed that gig platforms – or as they refer to them “online labour platforms” are becoming a viable work option for knowledge workers in emerging economies. Whereas historically these workers had worked through outsourcing companies, they can now be hired directly via the platforms. The feedback features of the platforms enable many of the workers to overcome any bias from Western clients that may be attributed to geography. “Once […] you do get those first few projects and you get good feedback, then it doesn’t really matter anymore that you’re from the Philippines.’
- In the US, the freelance market is becoming more robust.
The 5th Annual Freelancing in America report funded by Upwork and The Freelancers Union reported continued growth in the freelance ranks. The study estimates that there are 56.7 million freelancers in the US, or 3.7 million more than there were in 2014. Those who were full-time freelancers increased significantly over the five-year period as have the number of high earners in the cohort. (There was a slight decrease (1%) in numbers from 2017, but again, taking the long view, this difference is remarkable in its marginality. The US is in the tightest labor market n decades, so the fact that more freelancers weren’t wooed back to the ranks of the employed is the real story.) Finally, the data point that many often find unbelievable is that the majority of freelancers, 51%, would not go back to traditional work no matter how much it paid.
- Investment dollars are flowing into the sector,
This was a good year for the gig world. In the on-demand segment, both Uber and Lyft are planning IPOs. In the professional end of the marketplace, Upwork went public in October with half the market cap of staffing industry giant, Manpower, yet only 10% of the revenue. (When I think back to 1988 when I started my firm, M Squared Consulting, I would never have imagined that kind of IPO performance for a peer firm. It does my heart good…) The Israeli platform, Fiverr, is planning an IPO in early 2019 and reputedly looking at a billion-dollar valuation. Other players had successful funding rounds; Wonoloo, which caters to hourly workers, raised $32 million in a series C round last month and Business Talent Group, which is a platform for senior independent consultants, had a major funding round financed by Kelly Services. Stay tuned for more action in 2019.
- Financial services products targeted at independent workers are developing.
Given the sheer numbers of freelancers in the US, companies are developing financial products to meet the needs of this growing cohort. For example, Bunker Insurance provides a platform for custom professional liability insurance for independents, whether they are construction workers or turnaround consultants. Similarly, various financial institutions are looking at creating mortgage products for independent workers, products that would not require W2 income to qualify. ( For more on this see http://marionmcgovern.com/mortgages-and-the-gig-economy/) Stride Health, which has been a leader in offering products to independent workers is becoming more of a resource to talent platforms and their workers. And there are even marketplace disruptors, like Thor who is using block chain to lower operating costs, and recently announced a health insurance product for freelancers. Of course it is not perfect and there are still safety net issues, but the marketplace is making strides to meet the needs of the independent worker community.
- Innovators continue to enter the market.
Many people do not appreciate how diverse the gig economy marketplace is, since so much focus is placed on the ride share world. The truth of the matter is there are so many #CoolGgCompanies creating platforms and opportunities for all sorts of workers. Take, for example, Life Sci Hub, a very cool start up that has a vision to make drug development more effective and efficient. The platform is for experienced scientists, specialists and consultants in the field of drug development and clinical trials. The platform offers community to this specialized group and an essential resource to drug sponsors. I do regular blog posts on #CoolGigCompanies like Life Sci Hub and I never run out of fodder. I am grateful for the entrepreneurs that create cool new solutions.