The Rise of the Entrepreneur — The Gig Economy
Traditionally, an entrepreneur has been defined as “a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk”.
Rather than working as an employee, an entrepreneur runs a business and assumes all the risk and reward of a given business venture, idea, or goods or services offered for sale. An entrepreneur is commonly seen as a business leader and innovator of new ideas and business processes.
An entrepreneur is typically in control of a commercial undertaking, directing the factors of production–the human, financial and material resources–that are required to exploit a business opportunity. They act as the manager and oversee the launch and growth of an enterprise.
The Rise of the Independent Worker
According to the American Action Forum, Gig workers are mostly independent contractors and freelancers. Smartphone apps and online marketplaces have led to a sharp increase in nontraditional work and even a new class of jobs.
A related concept in product markets is the sharing economy; services and goods that employ under-utilized assets via online marketplaces or decentralized networks for both monetary and non-monetary benefits. For example, if you have extra time, you can contribute to Wikipedia or Linux. If you have an idle computer, you can download the Folding@home program and help advance medical research and cancer drug design.[ii] Some sharing economy business models adopt the alternative worker arrangements of the gig economy. Uber, Lyft, and Airbnb are just a few examples of how companies are merging the temporary work arrangements of the gig economy with the sharing aspects of an online marketplace.[iii]
The Gig Economy
Today with the advent and growth of the gig economy many of us are entrepreneurs.
The gig economy has enabled millions of people to work on their terms, set their own hours and rates of pay. The benefits of the gig economy are immense. According to a new report from Spera, a provider of tools and resources for freelancers and entrepreneurs. It contains the following rather surprising statistics about what it refers to as the “freedom economy.”
25% of the U.S. is now officially part of the freelance gig economy, a recent report indicates.
More and more people of all ages and ethnicity will declare their independence from the 9-to-5 daily corporate grind for the freedom, autonomy and self-determination that the freelance, gig economy lifestyle brings in the future.
According to a recent poll from TIME with the assistance of strategic communications and global public relations firm Burson-Marsteller and the Aspen Institute Future of Work Initiative, 44% of U.S. adults have participated in such transactions, playing the roles of lenders and borrowers, drivers and riders, hosts and guests. The number this represents, more than 90 million people, or 25% of the population of the United States.
The vast majority of these 45 million people working in the gig economy describe their experiences as positive, according to the poll. About one-third, make more than 40% of their income in this economy, describe it as their primary source of income.
Gig/Freedom/Freelance Economy Statistics
Independent contractors constitute a significant portion of gig workers, and grew by 2.1 million workers from 2010 to 2014, accounting for 28.8 percent of all jobs added during the recovery.
One in three Americans is a freelancer, making the sector a critical part of the labor market.
- Nearly 54 million Americans participated in some form of independent work in 2015. That’s more than 33 % of the entire U.S. workforce and is an increase of 700,000 workers over the previous year.
- Some researchers project that half of the working U.S. population will move into the gig economy within the next five years.
- About 1 in 12 U.S. households — more than 10 million people — rely on independent work for more than half of their income.
The U.S. isn’t the only place where the gig economy is thriving; the same phenomena is occurring across the globe.
- Half of the United Kingdom’s working population will be self-employed in the next five years, estimates say.
- The European Union saw a 45% increase in the number of independent workers from 2012 to 2013.
- Independent workers comprise the fastest growing group in the European Union labor market.
- India’s independent workforce, the second largest in the world at 15 million, fills about 40 percent of the world’s freelance jobs.
Economic Impact of Independent Workforce
Not only is the size of the independent workforce growing, but so is its contribution to the economy.
According to the report, in 2014, online freelance marketplaces like Upwork, OneSpace and Freelancer helped independent workers generate more than $1.1 trillion in total revenue in the United States alone.
Millennials in the Gig Economy
Although the gig economy spans all age groups, Millennials make up the largest portion.
- More than one-third of Millennials are independent workers.
- In 2015, Millennials became the largest demographic age group in the workforce.
- 32% of Millennials believe they will be working “mainly flexible hours” in the future.
The Driving Force of the Gig Economy — Technology
Technology has made it easier than ever before for anyone to enter the gig economy.
Mobile devices have freed people from their desks; social media now connects people across borders, and online freelance marketplaces make finding employment easier.
- 87% of Millennials say their smartphone never leaves their side, night or day.
- Nearly half (45%) use personal smartphones for work (vs. 18 percent for older generations).
- Some 41% are likely to download applications to use for work purposes in the next 12 months and use their own money to pay for them.
- 80% use social media as a method to finding work.
As appealing as the “freedom economy” or ‘gig economy’ sounds, it is not without its pitfalls and challenges that must be faced
These include marketing, cash flow, business management and healthcare costs.
- 63% of those interviewed in the Sherpa report say marketing is the most important expense to grow their business.
- 57% report experiencing cash flow issues at times during the year.
- 64% use some form of project management software.
- 70% use software to track finances.
- 40% prefer to get paid via direct deposit versus paper checks
What gigs are available and how is the income?
- I’ve talked with people making $200 a day working as a freelance courier for Postmates, a San Francisco–based startup specializing in on-demand deliveries from restaurants and stores in major cities.
- Ride-app company Uber, for instance, has become the fastest-growing startup in history and without hiring a single driver; its role is simply providing software that allows willing parties to connect.
- Platforms such as Upwork, Fivver, Freelancers and similar offer opportunities for tech, writers, marketers, telemarketers, website developers, graphic artists, videographers, and many more. Build your profile and start bidding on gig!
So, if you are tired of the 9 to 5 ball and chain, want your independence, the world is now your oyster. Buckle up, and enjoy the ride to building your own business.
Download the Spera report, to learn more.
Download the American Action Forum report, to learn more.
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