What is the “Gig” Economy and why is it important? It is the idea that people take jobs on a contract or freelance basis and may have several jobs or “gigs” going on at the same time. It’s important because it is the way of the future and here is why.
Take a look at these statistics:
- Millennials will stay at their jobs less than 3 years
- 1 in 3 Millenials freelance
- 42 million of us are on 1099 and that number is expected to be 65 Million in less than five years.
That says the makeup of the working world is changing quickly.
Why is 2016 a big deal?
Internet users surpassed 3 Billion. We are still on a hockey stick growth for this one. It will double again in just five years.
Number of Smartphones will surpass 2 Billion. This is another one that will double quickly. Mobile internet is more common than land lines in most emerging economies due to lack of infrastructure. Everyone is mobile and connected.
Millennials have overtaken Boomers in size. Sources vary, but the US Census Bureau reported Millennials (between ages 18 to 34 in 2015) represent approximately 75.3 million of us while the Baby Boomers (ages 51 to 69) total 74.9 million. This is a generation who grew up technology savvy and are changing what work-life balance means.
42 Million US Workers are 1099 (contract) employees. That represents 34% of the population and is expected to grow to steadily in the years to come with some predicting that as many as 65 Million of us will be working on a contract basis by 2020.
176 Platform Companies worth $4.3 Trillion. Platform companies are those sharing economy apps that match riders to drivers (Uber), buyers to sellers (Amazon), Contractors to Employers (UpWork) across multiple industries all over the world. There are certainly more than 176 of these companies but the statistic comes from some excellent research done by The Center for Global Enterprise, which you can find here.
63% of Platform Companies were founded outside the US. Most are in Asia (82) however North America has over 72 percent of the value compared to 22 percent for Asia. While our Asian counterparts are bigger in numbers, we are creating more revenue.
Also important is the way that contractors connect to employers.
Today there are multiple Employment platforms like Freelancer.com, UpWork, TaskRabbit, Staff.com, Twago and others that connect freelance workers with the companies who need their services, bypassing the traditional recruiting services.
These Platform companies are a big deal.
A research study of global companies led by Peter Evans of the Center for Global Enterprise, identified a criteria to understand the platform economy revealed the following:
- 176 Platform Companies worth $4.3 Trillion
- 63% of Platform Companies were founded outside the US
The above quote by David Plouffe, Senior Vice President of Policy and Strategy, Uber is the optimistic promise of the gig economy. Platforms that match people to work that companies need done, on demand, just in time without the requirements of employment.
Connecting to the rest of the world is going to get easier and easier. In the next 5 years, we will nearly double the number of people online from just under 3 billion to over 5 billion. – Source International Data Corporation (IDC )
The above is one of the five topics covered in the recent Bloomberg BNA webinar co-hosted by John Smith and Terri Gallagher on Thursday July 19, 2016.
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Written by Kathryn Hopkins.
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