What is the Gig Economy?
The gig economy is a new way of working. It’s about individuals and small businesses taking control of their professional lives. It’s about finding a better fit between people and their work.
There’s no one definition of the gig economy and it’s not just for the self-employed. It encompasses a wide range of work, from full time freelances to jobbing builders and day labourers to corporate temps, independent consultants to seasonal workers. The common thread is that they are all working flexibly, on short-term jobs or contracts, with variable hours, from location independent offices or via mobile devices. The great thing about this way of working is that you can choose when to do it.
This new world is disrupting the traditional approach to employment.
We’re starting to see the emergence of an alternative career path — one where you can choose how much you work, what you do and when you do it.
It’s an exciting time for those who want to embrace this new world — but it also means there are challenges around training, employment rights and how we fund retirement and pensions for people who move in an out of self-employment several times over their career or live multi-generational lives in one household at different times in their lives.
Is it really worth it to be a freelancer?
Not everyone is cut out for being a freelancer. It takes a special type of person to balance multiple jobs while working around other commitments such as family, friends, and health. If you are considering turning your back on full-time employment, make sure that you have enough financial security in place before making the jump into freelancing.
Can freelancing really be your full-time job?
Full-time freelancers are not a new phenomenon. However, the number of people who are choosing to work as freelancers has increased substantially in recent years. These freelancers are getting into the gig economy in order to supplement their income or to make ends meet.
The gig economy is a great option for people who are interested in side hustles. Freelancing is a good way to pursue your passions while making some extra money on the side. However, it is not a good option for everyone.
What are the important drivers of the gig economy?
Technology: The gig economy is widely thought to have been made possible by the development of the internet and other forms of technology. The internet has allowed for easy connection between employers and freelancers, which means that work can be outsourced anywhere in the world.
High levels of unemployment: With more people out of work than ever before, it’s no surprise that more people are turning to freelance gigs.
Consumer preferences: As consumers become increasingly aware about what they’re purchasing — and how it was produced — more workers are deciding that they want to be self-employed rather than working as a cog in a corporate machine. This also means that workers can choose exactly what kind of work they want to do — whether it’s a corporate job, a small business job, or an entirely freelance gig.
Advancing technology: Technology is making the gig economy possible, but it’s also making it easier for workers to freelance from home. Personal computers and high-speed internet connections make it possible for people to stay in touch with clients and employers from anywhere in the world.
Growth of the gig economy: As more and more people turn to freelance gigs for their income, the need for these kinds of services continues to grow. This makes it possible for larger companies to enter into the market — and for smaller companies to compete with them.
What are the economic consequences of the gig economy?
Benefits and drawbacks: The gig economy is great news for buyers, but it’s pretty bad news for sellers. Freelancers lose out on a lot of benefits that full-time employees receive, including healthcare and retirement plans. But they also get more freedom in terms of where they can work and what kind of work they can do. On the other hand, companies benefit from having access to a cheap labor force with low overhead costs. In fact, many companies claim that hiring freelancers has improved their company’s image — and its bottom line!
Increased income inequality: The gig economy has been blamed for widening the income gap between low-skilled workers and tech elites. Workers who are not able to leave their full-time jobs for freelance work must contend with stagnant wages — and high levels of underemployment. On the other hand, employers of gig workers claim that freelancers bring in more money than they cost as part-timers, while also improving their company’s image and increasing employee morale. It’s up to you to decide who’s telling the truth — but either way, the gig economy has certainly changed the dynamics of work.
Does the Gig Economy increase the income gap?
The gig economy has been blamed for widening the income gap between low-skilled workers and the tech elite. Those who are not able to leave their full-time jobs for freelance work must contend with income stagnation and high levels of underemployment. But employers of gig workers have a different story to tell. They claim that freelancers bring in more money than they cost as part-timers, while also improving their company’s image and increasing employee morale. It’s up to you to decide who’s telling the truth — but either way, the gig economy has certainly changed the dynamics of work.
What are the social consequences of the gig economy?
Changes in society: The gig economy is reshaping society in a number of ways. It’s making it easier for people to work from home and for companies to hire cheap labor force regardless of where people live. And as more people turn to freelance gigs for their income, it will also make it easier for large companies to monopolize entire industries. This means that there will be less competition — and fewer opportunities for workers looking to start a small business or sell an extra service online.
Changes in culture: The gig economy is changing how we think about our relationships with our employers and clients. In many ways, it makes working life more like social life — with a sense of community and shared experience among freelancers who are working on projects together. But freelancers also have very little power when it comes to negotiating prices or demanding better working conditions from their clients. If you’re planning on getting into the gig economy yourself, you should be prepared to take care of yourself — because your clients won’t!
Changes in the economy: The gig economy is growing quickly — and it’s expected to keep growing for years to come. But the gig economy has not been without its critics. Many economists have pointed out that the gig economy is making it harder for small businesses to compete with large companies who can afford to outsource work to a massive freelance workforce. This could end up harming consumers in the long run, as well as workers and small business owners who are unable to compete with freelancers.
What’s next for the gig economy?
The gig economy is still in its infancy, but it’s quickly gaining momentum.
As employment rates continue to fall, more and more people will be forced to live off of their freelance gigs.
For companies looking for a cheap labor force, this is great news. And as the gig economy grows, it will become even easier for employers to take advantage of this cheap workforce. Freelancers are typically forced to work on a project-by-project basis — rather than being hired on as full-time employees — which means that workers have very little job security and no protection from employers who refuse to pay. As for workers looking to break into the gig economy, they’d be wise to keep a close eye on their finances and their work. It may seem like a great deal now, but the gig economy is not all it’s cracked up to be.
The gig economy has been hailed as a revolution in the way people work.
But it’s also been criticized on many fronts: from its effect on the unemployment rate to its influence on income inequality. The gig economy has already made a big impact on society, and it will likely continue to do so for years to come. As a consumer, you should be aware of what you’re getting into when you decide to turn to freelancers for your online services and products — and as an employee, you should make sure that you are protected from unscrupulous employers who refuse to pay their freelancers.
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
I am also a frequent writer on Medium, covering topics relating to Education, Startups, Founder Advice and Fundraising. You can follow my posts at http://alexanderlhk.medium.com/