Beyond Two Words: Gig Economy

There is more to the Gig Economy. In mature markets throughout the world, the word “work” is being redefined by digital platforms that represent the company, not the office building or the corporate campus. Part-time work opportunities are now abundant. The digital economy is our new reality. The need for physical engagement is no longer a barrier to income possibilities. Engagement does not require the traditional classification of employee nor a resume. New skills can often be learned easily and quickly. Underutilized assets and underutilized time can be converted into income possibilities. The new labels are just as likely to be: Independent Contractor, Independent Entrepreneur, Solopreneur, or microentrepreneur. The new independent worker is not limited to a fixed set of hours to do the work. They work when they desire and now choose what type of work they engage. Welcome to what we are beginning to describe as a NEW ECONOMY.  

This article is written to share perspectives from both the perspective of writer, student, researcher, entrepreneur, and observer (the observer perspective) in conjunction with the academic perspective. This article provides proof that the gig economy is more than two words. The gig economy is transforming the way we work and the opportunities available to the crowd, not a select few. The gig economy is not about the sharing economy, which is also redefining the way we use assets, government owned and privately owned, within communities, cities, and free societies throughout the world. The gig economy and new economy is about being in control of when and how we work. 

The Observer Perspective

The industrialized work model of the past 100+ years has been focused on the formal corporate structure which follows traditional forms of organizational hierarchy where work is defined by definitive definitions relative to job responsibility including when and how the work is to be done. Traditional definitions now yield to or include the need for flexibility and freedom in how the work can be done. Unlike the rigidity of the industrialized model which depends on structure and the employer/employee relationship, the new definition of work that is emerging embraces new principles, new values, more flexibility than ever before, a transition from physical requirements to digital acumen unleashing a “new world” of possibilities for workers desirous of working, to a great degree, on their own terms.

A few voice commands or requests made to Siri or Alexa and the information we seek is provided instantly. We think differently, we retrieve our information differently, we store our information differently, technology makes us smarter, we shop differently, and yes…we work, in many cases, very differently. Today we can activate income possibilities without having to be present physically. We can work digitally, and we can work when we desire. As an affiliate of a platform, we can work at 10 am in the morning or for a few hours during lunch break while working a traditional job, at 10pm at night for a few hours, or between regular family responsibilities, and we can convert this underutilized time into income potential that far exceeds what may happen if we simply wait for the next raise, or wait for the next job possibility, or worry about what we might do if replaced or displaced on a current job, or how we will make life work in retirement years when the retirement fund did not work out as envisioned. This is why the gig economy is about much more than the two words. The gig economy makes income possibilities available to all who need flexibility and freedom as to how and when they work. The gig economy puts the controls of work into the hands of the worker. A mom or dad can work their gig while also caring for their family. The gig economy transforms the way we work, has become gender neutral to a great degree, and age, past experience or inexperience, is not always a factor. Here is what we learned during formal research we conducted over several years in our attempt to better understand the future of work. The primary research we conducted, led by Professor Peterson, convinced us that the gig economy was about much more than two words. Our overview is summarized in the following insights we share:

1. The gig economy has experienced phenomenal growth and broad appeal. Over 70 million Americans are estimated to be involved having a positive 1.4 Trillion-dollar impact on the economy. The Compound Annual Growth Rate (CAGR) of the gig economy is expected to be around 16% through 2034. Approximately 36% of the current workforce are involved in gig work (U.S. Bureau of Labor Statistics).

Based upon our study, there could be a thousand or more varieties of gig opportunities. The gig economy is huge, and the ramifications are extraordinary. The word “work” is being redefined. This redefining of work is one of the biggest transformations in mature economies in every part of the world. The following highlights from the research we conducted speaks volumes about the impact the gig economy is making on society overall:

• 51% are men and 49% are women.
• 97% are satisfied.
• 72% are working to pay household bills, save and invest more.
• 82% are desirous of being their own boss to some degree.
• 73% want a home-based business.
• 52% are very positive.
• 80% have specific goals.
• 74% prefer gig work to a full-time job.
• 78% are looking to develop new skills.
• Expectations vs amount earned were almost identical.

2. Working a gig is not a fad, nor are gig workers working what we may have described as a part-time job many years ago. Gig workers are well aware that they are controlling their own time and also the manner in which they work. History reflects an America that was more entrepreneurial prior to the industrial revolution which gave birth to factories and more structured work. Gig workers are not looking for structure as much as they are looking for flexibility and freedom in how and when they do the work. The growth and appeal of the gig economy actually reveals a growing interest in entrepreneurship and Independent Entrepreneurship.
3. The profiles of gig workers are amazing. Gig workers stay longer than we expected, and their satisfaction correlates with realistic expectations. Gig work can also be transitional, an opportunity to learn something new, and explore new possibilities without risk. A gig worker can work when they desire, quit if they desire, engage another type of gig, or even work multiple gigs. We were also impressed when looking at the overall educational profiles of the respondents in our survey. 98.6% had completed some level of education between secondary and post-secondary studies and 25% had graduate degrees. Gig workers are not those looking for something to do. They are quite focused on improving the quality of their lives.
4. The implications on business models and public policy are enormous. The choices enable all segments in mature societies throughout the world opportunities to convert underutilized time and/or assets into an income earning possibility. No one, at present, has enough data on exactly what the gig phenomena impact is on current, more traditional business models. Visually, we observe that taxi cabs are mostly extinct in most cities across the country. An improved channel of distribution, a transportation gig model, disrupted and replaced an outdated model.  

Some who are responsible for public policy are currently debating the value of gig work because the gig providing company does not provide benefits nor withhold any portion of applicable taxes to ensure compliance. Independent contractors are independent contractors. The flexibility and freedom they desire is entrepreneurial in spirit and this growing segment will desire benefits, no differently than any other worker however, safety net providers must make safety-net products available at reasonable prices and realize that their somewhat autocratic control of pricing is no longer going to as effective in a marketplace where independent workers and entrepreneurship, in various formats, begin to dominate the way we describe work. Perhaps, this should also be a focus of public policy.

Those responsible for public policy also become concerned about tax compliance, adherence to ethical standards, and respect for the consumer. When independent contractors do not comply with local and federal tax codes, rules and regulations, the type of business model they are involved becomes not only a topic of debate, but also a concern that can reach the highest levels of governance. California is not the only state where the debate could have led to unreasonable requirements of the gig providing companies. The debate has also reached academia as some thought leaders, writers and researchers debate the value of employment vs the use of independent contractors.

America was built upon an entrepreneurial attitude and culture. The industrial revolution created the workplace, jobs, labor unions and the structured workplace. Technology, and its amazing advancements, have provided us with opportunities to do more with less while reducing complexity. Collaboration and collaborative thinking is essential. Our research did reveal that over 60% of gig workers do not use any form of bookkeeping system. Gig providing companies should explore this type of information and realize that it is incumbent upon them to provide the guidance gig workers need to ensure compliance with all codes, regulations, ethical standards, and expectations. The result will be an even more effective channel of distribution, a win-win for the providers, participants and consumers of the products and services made available.

Specifically, the implications are:

Gigs are undeniably popular and appealing as a form of flexible work. The growth is expected to accelerate. The business model which utilizes independent contractors of all types, many of whom describe themselves as Independent Entrepreneurs represent the emergence of a new economy.

A shrinking traditional job base, a growing world of opportunity for independent contractors…traditional jobs have to shrink, they are too costly and too inefficient. Humans that work in what may have been described as a “traditional” form of work will work with and alongside robots and utilize technology in its many new forms.

Recent articles written by Catlin Nchako, Center on Budget and Policy Priorities and Ryan Heath writer for Politico emphasize the points we make.

“With 85 million Americans having trouble paying basic household expenses and fewer jobs today than a year ago, Zahidi and Wanamaker said it’s time for the U.S. government to formulate a grand bargain to help American workers retool for a very new and different economy of workers.