How the Gig Economy Fits into the Future of Work
Where will you be working in 10 years? Do you see yourself building a career in one company, one industry and maintaining a stable and consistent workplace routine? Or do you expect to be earning your income through regular contract work – taking on temporary jobs to earn money and then moving on to contract with someone else who will pay you to complete a project or a task?
The job market is beginning to look different – some say it may even be changing forever. This is in large part due to what is commonly known as the gig economy. If you’re not even sure what that means, well, you’re not alone. It is a catchy term for a whole lot of things. We turned to Wharton experts to help us better understand this new employment model and how it is redefining the future of work.
First, a definition. A gig is a short or long-term job that lasts until the task or project is complete; it is not permanent employment. “There is a whole new economy out there that people call ‘the gig economy,’ notes Gad Allon, a Wharton professor of operations, information and decisions who has published research on The Impact of Behavioral and Economic Drivers on Gig Economy Workers. “There are more and more opportunities now through new platforms for people to engage in freelancer work at every type of scale. They can do it once a day, once a week. They can do it almost as a full-time job, continuously shifting between, let’s say, working for a few hours for Uber, then switching to TaskRabbit, then doing maybe a few hours for GrubHub or Postmates. That economy is going to grow to around $2.7 trillion by 2025.” Walking your neighbor’s dog, shoveling the snow off driveways, even babysitting. These, too, are considered gig economy jobs. Wharton management professor Peter Cappelli adds selling stuff on eBay. That “counts as gig work, too,” he says.
How it has been. Traditional employment is constant – you interview for a job with a company, get hired, and show up as often as expected to do your specified work. “Many firms believe it’s better to offer us employment rather than contract with us on each and ever task,” says Allon. “Employment is a long-term contract. They offer us benefits [like health care and vacation time], they offer us long-term employment, and we do our job for them.”
A new model. Plenty of companies still offer this long-term employment contract to workers. However, in the past decade or so new businesses like Uber, Lyft and Airbnb have entered the market and started growing with investments from venture capitalists and the stock market. They offer consumers the opportunity to buy or rent assets owned by someone else. For instance, with Uber, we can pay a driver to use his or her own car to get us to the airport in time for our flight. We pay for that one-time service, and the Uber driver earns money from our transaction – not from a long-term relationship with his employer. That driver might drive for Lyft one hour and Uber the next. These digital platforms let us earn money by the task, not a full-time employment commitment. And the companies don’t have to pay employees benefits like health insurance or even take on the costs of owning a fleet of taxis, because they are only contracting temporarily with workers.
The future of work. Allon and others who study workforce trends have gone so far as to say that the gig economy is what work will look like in the future. “The model of the future will resemble more of a gig-economy engagement,” says Allon, who is also director of the Jerome Fisher Program in Management and Technology at the University of Pennsylvania. “I tell my kids that we’re getting into a world of niches where you cannot assume anymore that you will be employed by a firm for years just because they sign an agreement with you. As we go toward a world where more and more things can be monitored, contracted and measured, we’re going to go more to a place where people say, ‘Why do I need an employee full-time? Maybe I just need them from 5 p.m. to 6 p.m. to do this task. I need to find someone who can do that specific task at that time.’”
Getting prepared. Gig economy workers will not all be Uber drivers and food deliverers, suggests Allon, who points to the start-up company Catalant Technologies as an example of a much more flexible model where companies are matched with business consulting talent. Increasing project-based work will require a wide variety of skills in all different industries and specialties. High school students should be thinking about how they develop their job skills, so that they are prepared for this shifting employment model. “The next generation needs to understand that the world is changing. Automation is coming,” notes Allon. “You have to continuously ask yourself what you are doing that can’t be automated or that someone else can’t do better than you. Think about what you really like, and also what you are really good at. Next year when someone asks you about it, you should know more than anyone else. There will be no place for someone who just knows something, because knowing something can be found on Google. You need to know something that nobody else knows. Find that place where you want to go deeper, and take it further. If you manage to be differentiated, you will find a high demand for your skills.”
A different perspective. The gig economy is the future of work? Not everyone is convinced. It’s hard to make predictions about the future, says Matthew Bidwell, a Wharton management professor: “The future is likely to be somewhat different to how it is now, but there is no clear trend at the moment that I think tells us how work will play out in the future.” Bidwell was recently quoted in the New York Times article “Maybe We’re Not All Going to Be Gig Economy Workers After All” (see related links accompanying this article). Bidwell has been watching the gig economy closely, as well as a new California law requiring companies to treat their workers like employees, not independent contractors, which is expected to have a financial impact on companies like Uber. “I don’t think that the gig economy is the future of work,” adds Bidwell. “It is a vibrant niche in the economy and will likely continue to be one…but I believe it will not grow to dominate the economy. Most companies need some stability in their workforce. There is value to having the same people show up every day, who know each other, know the company and how to do the work. Many employees also value the stability of a regular, full-time job.”
Where does that leave us? The reality is that the future of work may well be a mixture of the old and the new, but all agree it will be different. Awareness is a great first step. Regardless of the degree to which the gig economy fits into the future of work, it will impact your earning potential – and that opens up opportunities for tomorrow’s workers. “The gig economy can be a great thing for giving people more flexibility and options to make money,” notes Bidwell. “It may make it easier for people to balance different jobs, and invest in some aspects of their careers. For example, it may be easier to go to school or take internships to learn about a field if you can also make money on the side by doing so.”
Related Links
- K@W: What Motivates Workers in the Gig Economy?
- NYT: Maybe We’re Not All Going to Be Gig Economy Workers After All
- Jeromy Fisher Program in Management and Technology
- Forbes: California Threatens $1 Trillion Gig Economy with New Law
Conversation Starters
As is often the case, experts differ on the future of work. Why is it important to have differing perspectives when shaping policy or entire economic models? How does that help us end up in a better place?
Do you work in the gig economy? Do you see yourself taking advantage of this new work model well into the future? Why or why not? Share your story in the comment section of this article.
Do you value long-term stability or flexibility? Debate both workplace models with your group or your class.
America’s founding principles are the basis for its success today. Variance of perspectives allow space for subjective truths and help us eventually settle on the objective truth. This applies to policy and economic model shaping because we learn from the flaws, mistakes and false dictatorial decisions. While government assists most major businesses during this pandemic, we must also take others that are affected in this economic crisis into consideration. When we take a look at China’s economic model and compare the poverty rates with the United States, millions of families live in rural areas and suffer to make a living are ignored by the government and major issues are dismissed. While the difference in perspectives benefit economic models, the real challenge is executing. It is easy to fall into the constant arguing, therefore we must encourage innovative ideas for the greater good.
The economic influence of the gig economy is multifaceted. It offers additional income opportunities for workers and cost-saving benefits for businesses. For workers, especially those who may face barriers to traditional employment, gig work provides a valuable income source. This applies to policy and economic model shaping because we learn from the flaws, mistakes and false dictatorial decisions. While government assists most major businesses during this pandemic, we must also take others that are affected in this economic crisis into consideration. When we take a look at China’s economic model and compare the poverty rates with the United States, millions of families live in rural areas and suffer to make a living are ignored by the government and major issues are dismissed. While the difference in perspectives benefit economic models, the real challenge is executing. It is easy to fall into the constant arguing, therefore we must encourage innovative ideas for the greater good.
Social media has created a gig economy through social media marketing and affiliate marketing for companies.
Social media has changed how we work as a society, including how we communicate with one another. As platforms such as Facebook, Twitter and Instagram have taken off, companies have also taken note of this.
They have started using these sites to promote their interests through social media marketing. That’s because those sites are capable of changing consumer behavior.
Social media sites allow marketers to use a wide range of tactics and strategies to promote and engage the content. Many social media channels allow users to provide detailed geographic, demographic and personal information, allowing marketers to tailor their messages to what is most likely to resonate with users.
Since audiences can be better segmented than more traditional marketing channels, companies can ensure that they focus their resources on the audience they want to target through social media marketing.
Social media marketing campaigns have the advantage of appealing to a broad audience at once. For example, a campaign may appeal to current and prospective customers, employees, bloggers, the media, the general public, and other stakeholders, such as third-party reviewers or trade groups.
Therefore, people should take advantage of their online presence and create for themselves a job.
This comment brings up an excellent point. As social media has risen, it has become easier and easier to advertise yourself for gigs. This ease of advertisement has had numerous effects, but there is one effect that seems quite strange. Artist commissions.
On sites such as Twitter and Instagram, artists have been posting their art, which gives them fans. Bigger fanbases means more advertisement, and more advertisement means more chance of them obtaining commissions. By doing this, they have been able to manipulate the platform of social media in order to obtain gigs, just as the original commenter had suggested. Because of this, art is no longer just a hobby, but a legitimate method of earning money. I myself know quite a few people who have been able to have a nice house or buy something that they wanted because of their selling commissions on the internet. Ultimately, I believe this to be for the better, as now people can make a living because of their hobbies.
While it is inevitable that change is the only constant, this change has been accelerated by unprecedented contagion. Covid-19 has left an impact, even permanent, in all facets of the economy, and today, security has become a prized possession for all. The hard-hit employees are increasingly looking for security in their jobs, which has directly affected the proliferating gig economy. However, others have taken up the opportunity of the golden age of social media to benefit themselves by making a strong online presence. Moreover, as the world is starting to embrace this new way of working, many blue-collar and white-collar employees have taken up gig work for additional or even primary income. The third section comprises individuals forced to take up gig jobs to reap the benefits of flexibility. This difference in the approach is enabled by the different situations faced by different individuals and his or her capability in respective fields.
The pandemic closed the doors of many offices and schools, isolating several workers and children. Burdened by the responsibilities of both work and home, several 9-5 workers, especially women, had to reluctantly become a part of the gig economy to gain the flexibility to spend more time with family. Thus, in one way or another, the employment dynamics are changing, with the gig economy becoming an inevitable part of this revolution. Even pre-covid, the gig economy offered a cost advantage for several businesses and continues to do so. On the other hand, workers will have to improve their skill-set and delve deep into their area of interest to employ a different approach in their niche. This highlights the increasingly competitive nature of the gig economy, proving to be profitable for businesses but tougher for employees. Agreeing with Bidwell, every company requires a stable corporate culture, which is not possible working with contingent employees. Building on that point, collaboration and engagement are necessary for a dynamic business model. Driving innovation in a competitive global economy becomes more difficult in an influx of different perspectives, insights, and experiences.
On the other hand, especially in developing countries, uber and Zomato employees are underpaid and overworked, underlining the personal benefits of the businesses associated with it. Quoting Radhika Kapoor, a renowned economist, “Technology reduces transaction costs, but the nature of employment does not match the standard employer-employee relationship.” It directly raises the concern for the security of the gig workers in the case of a mishappening and the absence of employee benefits. Taking the example of India, workers sometimes opt for gig jobs for supplementary income, but mostly because they don’t get the opportunity to work in a normal salaried job. Our drive towards the gig economy is influenced by many factors, which is varied in different situations. The upcoming fears about the ways of automation and technology might further shock the global workplace, stimulating people to settle for jobs offering little benefits, less pay, and a mere status of being employed. I agree with the perspective of our future being a blend of the traditional and modern ways of working but nothing is certain to predict. Compromising with certain employee benefits yet opening new opportunities for more flexibility and soft skills, the best of the gig economy is yet to be extracted. Thus, this economy is fitting into the future but is rather becoming a vibrant, creative, and useful emblem of work in the 21st century.
I don’t currently work in the gig economy. I see myself taking advantage of this working model in the future because I will need multiple source of income considering that inflation will continue to rise in the future making a dollar today less valuable tomorrow. Having multiple sources of income will allow me to counteract the lack of value of money in the future due to inflation. It also allows me to sufficiently sustain myself and my family in the future. I value both long-term stability and flexibility because they will allow me provide for myself in years to come.
i don’t currently work in the gig economy. I’m sure that I would take advantage of this working model in the future because it’s better to be assessed by the amount of tasks you complete rather than the time you spend working on that task. Also having multiple sources of income is something important for maintaining wealth.
The gig economy is actually a great advantage for those who have a hard time trying to find a job. Its a good way to earn money as well on the side, if you have a stable job but want to earn something extra a gig job can be a good option. I personally don’t have a gig job but it has wide variety of options that can be choose maybe later on in the future I can use one of these platforms. This is also a good fit for those who have cars, bicycle, motorcycles, and so on. The only disadvantage of a gig job is you don’t have no type of security and it can be dangerous in some occasion. It can a perfect part time for people who like to work part time. Maybe in the future I will try this platform to save up some money beside from my stable job.
The gig economy seems like a step I would probably be taking for any reason. I feel like this gives me a sense of comfort knowing I can do many things to earn profit somehow. There are lots of opportunities with the gig economy. It’s flexibility is what makes it big, I feel like this is very helpful specifically for like college students or students doing internships to learn but also earn at the same time. I currently do not work in the gig economy, but I feel like I see myself taking advantage of this opportunity. Mostly in my stage of reaching my career during being a college student until I reach a stable job. But even if anything occurs I know the gig economy is a path I could temporarily take
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I don’t work in the gig economy, I don’t even have a Job. I probably. Do you want to take advantage of the new work model in the future because employment is a full time commitment and I rather be at one place.
I value long-term stability. I rather work in a stable, consistent workplace, not contract work..
As a student with no job I do not work in the gig economy but I could see myself working and taking advantage of the gig economy as I would like to become an engineer. However I feel like I’d rather have the stability that comes with working outside of gig contracts. I also feel that personal things such as my family ,relationships , and friends would mainly impact my choice. If for instance I have to move from place to place to more conveniently complete gigs then I would not want that. I would say I value not only the financial stability but also the social stability that comes with being at a single workplace.
The gig economy seems like a step I would probably be taking for any reason. I feel like this gives me a sense of comfort knowing I can do many things to earn profit somehow. There are lots of opportunities with the gig economy. It’s flexibility is what makes it big, I feel like this is very helpful specifically for like college students or students doing internships to learn but also earn at the same time. I currently do not work in the gig economy, but I feel like I see myself taking advantage of this opportunity. Mostly in my stage of reaching my career during being a college student until I reach a stable job. But even if anything occurs I know the gig economy is a path I could temporarily take.