What is the gig economy?
The term "gig" was added to the literature by the jazz musicians of the 1920s, and it can be called any musical live performance gig. According to dictionary, gig economy is described as a labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.
The word defines a short term job. After learning the gig economy definition, let’s dive deep to understand better what the gig economy means.
It is a free market system where temporary jobs are available, and companies hire workers with short-term contracts. A gig economy challenges the traditional economy of full-time workers who rarely change careers.
Freelancers, independent contractors, project-based workers can be considered as gig employees. If you have income-earning activities outside the long-term employer-employee relationships, you are considered as a gig employee. If you think about 36% of US workers involved in the gig economy, you might want to know more about this new term.
To better understand the term, we must understand the following terms and their benefits in the ecosystem.
The freelance economy is precisely the same as the gig economy. It can be described as a labor market consisting of a growing number of short-term contracts. The freelance economy provides flexibility both to employees and employers.
The sharing economy is an economic model that provides shared access to goods and services often facilitated by a community-based online platform. In today’s economic market, the sharing economy can be described as a socio-economic system built on the idea sharing of resources and products. Sharing economy in the future will grow exponentially as digital products gain huge popularity. Bernard Marr said in the Forbes article, ‘In the future, we may own much less and share much more. And if we do, it will all be down to big data.’
Agile workplaces are designed for a more flexible work model. These places enable employees to work where they choose by giving them all of the technology they need.
The independent workforce offers excellent benefits to businesses with their wide range of skills without adding them to the company payroll.
Why is the gig economy on the rise?
Increasing unemployment rates due to COVID-19 has a significant impact on the rising popularity of gig economies. However, if we go a little back, one of the main reasons that create unemployment in the global world is automation. Since Kurt Vonnegut Jr. published Player Piano in 1952, a lot changed in technology.
As automation continues snowballing, and AI gets smarter, the fewer jobs will be available in the market for new generations. The good news is that the gig economy will continue providing more benefits for people globally.
One of the primary reasons that create this massive expansion of the gig economy is economical. Most of the time, companies can't afford to hire full-time contract employees. Suppose you look at your social media accounts. In that case, if you scroll down on your LinkedIn feed, you may also notice more and more people are defining themselves as a "freelancer," "self-employed," and "entrepreneur."
The freelancer gig economy is the rising labor market that hires independent professionals with temporary contracts. This way, companies can outsource tasks to already-trained gig workers easily.
Examples of Gig Economy companies
When we talk about gig companies, we tend to think companies like Uber and Lyft in the first place. However, many big companies create jobs for millions of people.
But today, especially after the COVID-19 pandemic, gig work popularity increased enormously. Today, if you want to be a freelancer gig economy worker, you can find a job according to your skills and interests. There are even gigs for doctors now!
For example, if you are interested in freelancing jobs, you can work independently as a web developer, software coder, designer, or an accountant.
According to the Forbes article, in the United States, gig economy employers work out to a vast number of approximately 57 million people. Of course, many of these 57 million people are freelance workers working in the freelance gig economy. From Uber drivers to freelance developers, there are millions of gig economy workers.
There are many great examples for the gig economy companies such as freelancer marketplaces like Upwork and Fiverr or sharing economy companies like Uber and Airbnb.
Here are the top ten freelancer gig economy companies:
If you are interested in gig economy companies, you can find the full list on Wikipedia.
Freelancers role in the Gig Economy in 2021
Freelancers have an essential role in the gig economy since the most valuable gig economy companies are working on creating a freelancing job market. Especially after the COVID-19 pandemic and its impacts on remote working will change how we see freelancing in the future. While many employees try to earn income from digital works remotely, the gig economy will grow exponentially. Let’s have a look at the gig economy trends in 2021.
According to the Payoneer research, back in March, close to 32% of freelancers reported that demand had significantly decreased due to the global economy’s overall slowdown.
However, regarding the long-term future of freelancing, 53% of respondents expected demand would increase from levels seen even before the pandemic. Freelancers were very optimistic about the market bouncing back post-pandemic.
Freelance Economy Growth
Freelance economy growth depends on many things like the global economy and investments. However, when it comes to change, freelance economy growth is inevitable. Here are the exciting facts and freelance economy statistics:
The sixth annual “Freelancing in America” study finds that more people than ever see freelancing as a long-term career path. For the first time in 2019, freelancing income totals almost $1 trillion — or nearly 5% of GDP — more than significant industries like construction in the US.
According to the research published on Upwork, Freelancing income exceeds the GDP of some significant industries. At nearly $1 trillion (approaching 5% of U.S. GDP), freelance income contributes more to the economy than industries construction and transportation and is on par with the information sector.
Freelancers doing skilled services earn a median rate of $28 an hour, making more per hour than 70 percent of workers in the overall U.S. economy. In addition to this, freelancing is becoming more of a long-term career choice. Those who freelance full time increased from 17% in 2014 to 28% in 2019.