7 Things You Should Know About Freelancers

If you’re not a freelancer, chances are you have a friend or family member who is. It’s also likely you know many people who have hired freelancers — perhaps you have yourself. One thing’s clear: Work is changing and a major trend shaping our future is the rise of the independent workforce.

I recently had the privilege of exploring this global phenomenon in a talk at the Web Summit in Lisbon. Attendees included some of the most exciting, cutting-edge tech entrepreneurs and professionals in the world.

As we watch the future of work continue to take shape, here are seven things to know about freelancers and the much larger role they play than you may realize.

1. There are 162 million independent workers (probably a lot more than you thought)

According to a report released last year by McKinsey Global Institute (MGI), between 20 to 30 percent of the working-age populations of the United States and the European Union do independent or freelance work. That means there are at least 162 million freelancers in the U.S. and E.U. — and the numbers are growing fast [see #2].

2. A freelance majority is predicted in the U.S. by 2027

More than 57 million Americans freelanced this year according to Freelancing in America: 2017. If the current workforce growth rates found in the study remain steady, that means the majority of the U.S. workforce will freelance within 10 years. The youngest workforce generation is leading the way towards this future, with almost half of Millennials freelancing already.

3. Don’t call this the gig economy

When asked what they want this growing way of working to be called, freelancers say not to call it the “gig economy.” They want you to call it the “freelance economy.”

Two-thirds of freelancers started freelancing more by choice rather than by necessity and they are generally much happier with their work than traditional employees. What’s more, 50 percent of freelancers say there is no amount of money that you could pay to convince them to work as an employee. If businesses want to work with this highly skilled workforce, they are going to need to meet them where they are, on their terms.

4. Freelancing is all about freedom

Let’s forget about the numbers for a second and look at a story (a true one):

There’s a young woman named Joana who lives in Lisbon. She used to be a full-time architect at a firm there. Soon after having her first child, she was laid off and decided to become a freelancer. Today, she finds freelance opportunities through Upwork and has clients all around the world.

She’s still an architect, designing homes for clients all over the world. But, more fundamentally, she is now crafting her professional life around her personal life as opposed to what traditional employees do, filling the few gaps that are left by professional life with some bits and pieces of a personal life.

This is what freelancing is about — freedom. Here’s what freelancing looks like in freelancers’ own words:

5. Tech is reducing job market friction, opening up more opportunity

Consider this: Half of all U.S. GDP in 2015 was created in just 23 metro areas.

Geographically speaking, that’s highly concentrated wealth creation, and it’s not much better globally. Worldwide, only 600 cities create 60 percent of global GDP according to one estimate from MGI.

If you don’t live in one of those cities, opportunities could be passing you by.

Traditionally, freelancers have found projects through friends and family — networks that tend to be local and often removed from the opportunities available to those in the bigger cities. Conversely, clients based in these metropolises wouldn’t typically find these freelancers.

That’s where freelancing websites like Upwork come in, freeing people from previous constraints and increasingly connecting them to the right work opportunities.

About 15 percent of freelance workers are using digital talent matching platforms today according to MGI.

The firm notes that “The rapid growth of these platforms suggests we have only begun to see their impact.”

6. Freelancers are better prepared for the future

While digital platforms are helping to connect highly skilled people with opportunities all over the world, the skills needed for jobs are changing faster and faster.

As a result, we need to shift to a mindset of lifelong learning. We all need to retrain ourselves every couple of years, and that’s true whether you’re a traditional employee or a freelancer.

That said, our research shows that freelancers are better preparing themselves for the future: 55 percent of full-time freelancers say they’re updating their skills as jobs evolve, compared to only 30 percent of full-time employees. This means that freelancers will play a key role in innovation as they increasingly possess more of the cutting-edge skills businesses need to create new technologies.

7. Digital platforms could add $2.7 trillion to global GDP by 2025

Opening up more flexibility in the job market is helping bridge gaps and could create trillions more in earnings opportunities.

Matching the right person to the right job is a major source of inefficiency in labor markets, but digital platforms can “have a transformative impact by efficiently matching a larger pool of workers with consumers of their services,” according to McKinsey Global Institute.

MGI’s research shows that by 2025, online platforms could add $2.7 trillion to global GDP and “ameliorate many of the persistent problems in the world’s labor markets.”

What this all means to businesses…

Hiring freelancers offers an escape from zero-sum talent wars. Companies are fighting intensely over the same pool of local professionals, such as engineers or designers, who happen to live within easy commuting distance of their offices, but they don’t have to.

It’s time to stop fighting yesterday’s war. Instead, meet people where they are, and hire them there — and help give a boost to local economies and small towns that haven’t seen the same prosperity as their big city counterparts. The best professionals will only expect more flexibility in the future and companies that provide that will have a unique advantage in accessing the talent they need.

Additional resources:

• You can watch my Web Summit talk here.
• To learn more about the future of work and the rise of freelancing, check out this list of books.

This post originally appeared on LinkedIn.