John McDonald | Managing Entrepreneur at NEXT Studios
Sitting at home one evening feeling hungry, you pop out your phone and flip through the specials on DoorDash, looking for something you like. As you scroll, you remember that you’re out of napkins and paper plates, as there’s been a lot of takeout meals delivered to your house recently. You flip over to the local grocery store app and add them to the list for the scheduled delivery tomorrow. After placing your orders, you switch over to YouTube, looking for something entertaining to watch while you wait. Up pops a show from a favorite chef, and you’re inspired enough by what he’s making to add some of the ingredients to your grocery store order, and then to go to Amazon and order yet another specialty cooking utensil you’ll probably only use once.
Sound familiar? If your house is like my house, scenes like this play out every day, more so now than ever due to COVID. What you may not realize, though, is that each of these events represents an interaction with the gig economy — something that was already happening before the pandemic, but now has accelerated into a way of life for millions.
The gig economy is a system whereby organizations hire independent contractors to work for limited periods of time for a specific function. The name comes from an informal term used by musicians to describe being hired for a single performance or limited engagement, and it now perfectly describes all kinds of jobs beyond just playing a guitar. Essentially you as an individual have skills and have time, and these are in demand by other people who would like to pay for that time and skill, but not as a long-term or permanent employee.
The gig economy has been a part of food service for a long time, and the upending of the taxi industry through Uber and Lyft is well documented, but the growth in technology-based platforms has enabled locating, hiring and paying a gig worker infinitely easier that it was just a few short years ago. This has enabled the spread of the gig economy to now include writing, art and design, media and communications, software development, information technology and project management. Most interestingly, a significant portion of some traditional industries are converting to gig workers, including accounting and finance, legal work and education.
According to Gallup, about 36% of US workers are now involved in the gig economy, and if this growth rate continues, more than half the workforce will participate in it by 2027. This growth rate is three times faster than the growth rate of the workforce as a whole, according to Forbes. More importantly, according to McKinsey, 78% of gig workers say they’re happier than those working traditional jobs, 68% say they’re healthier, and 51% would not go back to traditional work for any amount of money. It’s clear that the gig economy is here to stay and isn’t just a COVID-related temporary disruption in how work gets done.
What is the long-term impact? It’s likely that there are several:
1. Every industry will be transformed by the gig economy. The transformation that has already occurred in short-distance ground transportation via Uber and Lyft is coming in every industry. For some, it is well underway: in 4Q 2020, 54% of the products sold on Amazon actually came from third-party independent gig economy sellers, and almost half of its deliveries are now done through gig workers. For others, such as legal and financial services, long-standing regulations are slowing the transition, but are not stopping it: legal assistance requests through gig economy platforms like Docketly jumped significantly as COVID began and have not slowed down
2. You will become part of the gig economy personally. If you’re not already offering your time and talents and resources through some sort of on-demand platform, you may be missing out on a personal business opportunity. Got a pickup truck? Uber launched Uber Connect, where you can hire out yourself as a driver to deliver small packages and materials to businesses or to a factory. Know how to code? Any number of online platforms would hire you now to develop or to test software written by others. Like to teach? Online academies and local school districts are looking for gig workers to fill in their teaching staff.
3. The gig economy represents a renaissance in entrepreneurship. Once thought reserved for the elite few, going into business for yourself is one of the principal ideas upon which our US economy was built. According to the Kauffman Foundation, all new job roles created in in America come from new startup companies — deciding to start a business and then making your first hire: yourself. This accounts for the high marks that gig economy workers give themselves related to fulfillment and sense of purpose, as well as their desire to stay with it and not return to traditional work.
So, how can you leverage the gig economy for your business? Here’s a few ideas:
1. Recognize that you probably already are. From how you source supplies to how you find new workers, you and your coworkers are probably already leveraging online gig economy platforms to get your work done. Identify what those are and look for ways you can expand their usage to save money and increase flexibility.
2. Look for jobs within your organization that could be gig economy jobs. The list today is much longer than it was even a year ago. Look for roles that can, or should be, done mobile or from home. Look for roles that aren’t time-dependent, meaning the work could be done at odd hours or on the weekends. Also, look for roles that can be done largely digitally, without the need for special equipment that might be found only in a single location. All of these roles have the potential to be made more flexible and dynamic through the gig economy.
3. Think about new ways you could leverage the gig economy to help your company grow. If there’s an app or platform that already offers what you do through the gig economy, consider becoming part of it. If not, consider starting up one in partnership with a technology incubator or studio.
There’s no doubt that the gig economy is a growing and important part of how work gets done today. While it was already happening prior to the pandemic, like so many things, it was greatly accelerated by it. The only question for you is if you will be the victim or the victor of this 2021 and beyond megatrend.