The Future of the Gig Economy
The “gig economy” has become an ever-expanding meme, clocking over 500,000 citations on Google. It’s also become an interesting barometer of sentiment. Some people, especially techies, love the concept and can’t wait until the gig economy frees everyone from working as employees for large, bureaucratic organizations. Others, especially “progressives,” worry that this is the latest form of labor exploitation that will surely consume all of us, driving us into the pits of poverty.
To better understand the independent workforce and what motivates the people who participate in it, the McKinsey Global Institute surveyed some 8,000 respondents across Europe and the United States.Up to 162 million people in the United States and Europe—that’s between 20 and 30% of the working population—engage in some form of independent work.
What are the key types of gig work today?
If you look around at what passes for gig work today, it tends to fall into one of two categories: routine tasks and creative problem solving. I haven’t seen any reliable studies on this, but my impression is that the vast portion of gig work today falls into that first category – routine tasks.
Routine tasks. Perhaps the poster children of the gig economy today are the drivers who work on a freelance basis for various mobility fleet operators in large cities. But earlier participants in the gig economy were people working on a growing number of online platforms to do everything from routine software coding and translation services to bookkeeping services and clerical services.
Creative problem solving. Crowdsourcing has become a growing trend within corporate America. Do you have a really challenging question that needs to be addressed? Crowdsourcing is an approach that encourages managers to go beyond the boundaries of the enterprise to ensure that they come up with the best answer possible. Companies can pose a problem or question on crowdsourcing platforms and offer a reward of some kind to the person who comes up with the best answer. The power of these platforms is the ability to tap into a broader and more diverse range of expertise, regardless of where it is located.
The second characteristic of gig work today is that it tends to be done by individual contractors who bid for the work independently and perform the tasks as individuals.
The gig economy is likely to evolve significantly in the decades ahead, shaped by three key forces: automation, changing customer needs and the mounting pressure to accelerate learning.
Automation. The first category of gig work identified above – routine tasks – is currently the dominant segment of the gig economy but it’s the most vulnerable to automation.Routine tasks? Machines are likely to be able to do those much more cost effectively and reliably than humans can. Even such complex but routine tasks as driving a car in cities or driving a truck across an entire country are likely to be automated as autonomous vehicles become more versatile and affordable.
Changing customer needs. There’s a new category of work that’s likely to emerge in response to changing customer needs. It starts in the consumer space where customers are evolving away from acceptance of highly standardized, mass market products and services and instead increasingly seeking, and even expecting, highly tailored products and services that meet their unique needs.
A new report from the human resources consulting firm Randstad indicates that non-traditional workers, which include independent contractors, on-demand workers, remote workers as well as other arrangements, already make up between 20 and 30 per cent of the Canadian workplace. This number is expected to grow as the gig economy becomes a more accepted employment model across Canada.
In short, the emergence and evolution of the gig economy is simply one more manifestation of the power of pull. The early initiatives in this arena have focused on harnessing the first level of pull – accessing skills when and where needed. But the real opportunity latent in the emerging gig economy is the opportunity to tap into the third and highest level of pull – achieving more of our potential by creating environments that can pull that out of each of us, especially when we work together.
As always, let us know your take on this discussion in the comments below.