It would have been hard to imagine an environment in which majority of the workforce are freelancers just a few decades ago. Not only is this a reality now but the rise of the gig economy seems to be only just beginning.

The rise of the gig economy has been so significant that McKinsey says there are currently about 68 million freelancers in the US. It is projected that 43 per cent of Americans will be gig workers by 2020.

While these are very significant statistics, perhaps the most interesting of them is the fact that the freelance economy is growing about three times faster than the overall US workforce.

What is the gig economy?

The gig economy is a culture in which people have control over their work schedule and work hours due to working as freelancers or independent contractors.

As a startup founder, entrepreneur, or business owner, it is critical to understand how the gig economy works. If you haven’t already, you’ll have no choice but to be a part of it in the not-so-distant future.

According to AJ Brustein, the co-founder and COO at Wonolo, people take part in the gig economy in four key ways:

1. Through a traditional freelance writing career: these are people engaged in freelance writing jobs, freelance programming/designing/development jobs, freelance photography, or other types of freelance jobs — online or offline.

2. Through gig marketplaces: these include services like Uber, Lyft, TaskRabbit, and Airbnb.

3. Through self-employment: these include small business owners, tradesmen, and others who are running a services business by choice.

4. Through other areas not properly captured by the first three: these include full time and part-time side hustles like blogging, affiliate marketing, dropshipping, and other online businesses.

In fact, the interest in gig work has so risen that a growing number of people are opting for it as a preferred means of work. The chart below from the U.S. Census Bureau shows the growth of gig workers (also known as “nonemployers”) in the taxi industry over a 10 year period. After a steady growth averaging 5.2 per cent per year between 1997 and 2013, the number of gig workers more than tripled in the three years that followed — and it hasn’t slowed:

The gig economy trends that matter

So what are the gig economy trends that matter? Whether you are a gig worker, a freelancer, or an employer of labour, you want to pay key attention to the following gig economy trends as we head into 2020:

1. Technology and automation will further drive the expansion of the gig economy

Now more than ever, more people are deciding to be gig workers, freelancers, and contractors by choice. People are choosing to be self-employed because they no longer believe in the concept of job security.

With the rise of artificial intelligence (AI), machine learning, and automation, you can expect more and more people to favour working in the gig economy.

Research shows that thanks to automation and technology, a whopping 54 per cent of workers are not confident about the existence of their job two decades from now. As a result, you can expect these people to attempt to make an effort to be more in control of their jobs and work opportunities, further driving the growth of the gig economy.

2. More people will join the gig economy in order to earn a part-time income

While many people generally assume that gig workers are people working fully independently with no job whatsoever, data shows that this isn’t necessarily the case.

According to the Gig Economy Index, about 40 per cent of workers generate 40 per cent of their income by partaking in the gig economy. In other words, many people have to resort to freelancing or some other gigs work in order to meet their financial goals.

So, just as the gig economy is naturally expanding, you can expect a rise in the number of full-time employees partaking in the gig economy.

3. The rise of flexible traditional jobs

Many gig workers aren’t embracing the gig economy by force. They are embracing it by choice. This is due to the allure of the autonomy, flexibility, and respect they derive from being gig workers.

Also Read: The rise of gig economy and how it affects fintech

As major organizations and startups struggle to retain talent, the traditional job as we know it will experience a gradual evolution; many organizations will design their traditional job opportunities to look more like gig work. Organizations will offer more job flexibility and autonomy in order to retain talent. In fact, organizations like Google are already changing their work environment such that they now have more gig workers than full-time employees.

4. More protection for gig workers

As we come to terms with the reality that the gig economy is here to stay, you can expect a rise in protection programs designed for gig workers. This includes a rise in insurance and medical coverage for gig workers.

5. The rise of gig economy markets and websites

Uber, Lyft, Airbnb, and others show that the demand for gig economy markets is significant — and this demand will only increase as the gig economy expands.

Upwork, a gig economy website for freelancers, boasts over 15 million users. Toptal also boasts over USD$100 million in annual revenue serving a niche market that connects businesses with top talents that include designers, software engineers, and business consultants. 

As big as these gig economy startups appear to be, the need for gig economy markets has barely been met; data from Payoneer shows that more than 70 per cent of freelancers find jobs through gig economy websites and online markets. You can expect a rise in gig economy market websites and startups.

6. The gig economy is set to double in just five years

The gig economy is forecasted to more than double not in terms of actual gig workers but in terms of the gross volume of transactions taking place in the gig economy. This is possible thanks to a compound annual growth rate (CAGR) of 17.4 per cent.

According to research by Medici, while the gig economy was worth USD $204 billion in 2018 it is expected to grow to USD $455.2 billion by 2023. This is significant and worth paying attention to. This opens up significant earning opportunities for freelancers and gig workers but also presents startups and businesses with unique opportunities to differentiate themselves and earn.

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