Victoria Reagan has the unenviable task of looking at the changes taking place in the world and netting it all down into simple description. Here are her thoughts on the Gig Economy.
THE “GIG” ECONOMY
The human is facing a global emergency. Diseases, climate-related disasters, and extreme poverty are taking the lives of thousands of people every single day while millions are directly or indirectly affected. At the same time, public spending on essential services and social welfare has been drastically reduced by the government, making it increasingly difficult for many people to meet their basic needs (food, shelter, and clothing).
This global emergency exists largely because for over several decades governments policies have emasculated the “sharing economy” also known as “global collaborative economy” – this is a system of redistribution of wealth that have been established over many generations.
To address the issue of distribution of wealth in the global economy government policies favoring the global collaborative economy need to be adopted. The global collaborative economy will inevitably become a major part of the global economy. In this article, I will be addressing the current state of the “gig” economy, and the underlying economic, technological, social, and political factors that lead to the rise of the sharing economy and predict the growth of this sector in the coming years.
The global collaborative economy can also be referred to as the “gig” economy, the turning away from major institutions, global self-determination movement and it is also called “Black Market” Economy by some in the OECD.
What is a ‘Gig Economy?’
What do a freelance writer, a graphic designer on fiverr.com, an Airbnb operator, and a Uber operator have in common? They can all classify what they do as “gig work”. With the growth of the “gig” economy growing at a fast pace, more and more people is adopting this category of a global economy. However, there is no particular working definition of what Global collaborative economy actually is.
The best-accepted definition of Global collaborative economy is “the peer-to-peer based activity of obtaining, giving, or sharing access to good and services”. It can also be defined as an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.
Again, this could come from a number of sources. Independent marketing consultant working on fiverr.com, a graphics designer using upwork.com, an artist advertising on Craigslist or a driver using Uber to find passengers all fall into this category.
‘Gig Economy’ explained
In some ways, the “gig” economy is part of a shifting cultural and business environment and it is a reversion to the pre-industrial age when people in a particular community had to share resources to survive. Modern technology allows sharing to occur seamlessly across a global village of consumers and providers, with trust established through reviews that have been given by previous consumers.
The “gig” economy is driven for the most part by progress in technology, resource shortage, and social change. In a gig economy, impermanent, flexible jobs are common and organizations incline toward hiring independent contractors and freelancers instead of full-time employees. A gig economy emasculates the conventional economy of full-time workers who infrequently change positions and rather concentrate on a lifetime career.
Advantages of Gig Economy
The growing prevalence of independent work could have substantial economic benefits, such as increasing the activity of the labor force, providing unemployed with job opportunities, or even boosting the productivity of individuals. Consumers and companies could benefit from the more noteworthy accessibility of services and enhanced coordinating that better satisfies their necessities. Digital platforms can amplify all these benefits through their larger scale, faster matches, seamless coordination, and richer information signals, enabling trust.
Due to the large numbers of people willing to work part-time, the result of a gig economy is less expensive and more efficient services for those eager to utilize them. The individuals who don’t take part in utilizing technology services, for example, the Internet have a tendency to be deserted by the advantages of the gig economy.
The Future of Gig Economy
The trend toward a global collaborative economy has begun. The gig economy is estimated to grow from $14 billion in 2014 to $335 billion by 2025. This estimate is based on the rapid growth of gig platforms such as freelancer.com, fiverr.com, upwork.com, Uber, and Airbnb as indicative.
America is well on its way to establishing a global collaborative economy, and it is estimated that as much as 2/3 of the working populace is already working in some sort of gig capacity. A study by Intuit anticipated that by 2020, 30% of the world working population would be independent contractors.
Types Gig Economy
Gig economy has many different aspects; this allows people to find an appropriate niche for their skills and career. Some niche is more flexible than the other, some niche involves the freelancer growing a client base while the freelancer can work in solitary in others; some niche requires previous skills and a certain educational or training, while other works can be learned on the job.
Although demographically diverse, freelancer largely fit into four categories:
• The free agents: These sets of people actively choose to work independently and they derive their primary income from it;
• The casual earners: These categories of people choose to work independently for supplemental income and these set of people do so by choice;
• The reluctant: These categories of people earn their primary income from independent work but would prefer to have a traditional job.
• The financially strapped: These categories of people do supplemental independent work due to financial constraints.
Factors That Are Contributing to a Gig Economy
There are a number of factors causing the increase in the popularity of the “gig” economy.
Gig economy is rapidly evolving as digital platforms create large-scale, efficient marketplaces that easy direct and even real-time connections between the person that is willing to provide a service and the person who need the service performed. In the twenty-first century, the workforce is increasingly mobile and work can be done in any location. This means that gig workers can select among several jobs and projects posted on the marketplace from peoples all around the world, while employers can select the individual that best fit for his job or project from a larger pool than that available in any given niche.
Gig economy allows businesses to save resources in terms of benefits that will be given to employees, office space and training. It also gives businesses the opportunity to make use of experts for specific projects who might be too high-priced to maintain on staff.
From the perspective of the gig workers, a gig economy can improve work-life balance. The independent workers have the opportunity to select the jobs they are interested in rather than being forced into doing something he or she is not interested in by a boss.
Employers also have a wider range of applicants to choose from, as they are not limited to choosing someone based on the fact that he or she is closer to their location.
Gig economy gives employers that can’t afford to hire full-time employees an opportunity to hire part-time or temporary employees to work at an affordable price.
Employees often believe that they need to take more than one job in order to be able to afford the lifestyle they want.
The decline of pension programs is another factor that motivates people to earn more through freelancing.
The global collaborative economy plays a vital role in the future of work and is one of the reasons employees wanted more flexibility and freedom at home or in the office. The number of people involves in gig economy is expected to grow rapidly over the next few years, especially as current people involved continue to have strong financial success.