5 Ways That Freelancers Are Transforming The Economy

5 WAYS THAT FREELANCERS ARE TRANSFORMING THE ECONOMY $4 %$4 The gig economy, which has become synonymous with holiday rentals and taxi apps, has seen entrepreneurship, peer-to-peer working and going it solo become a dinner table topic. But what shape will this new on-demand economy take? And what problems will need fixing for a smooth transition? SAYİNG GOODBYE TO THE 9-5 ACCORDING TO A RECENT INTUIT SURVEY: 6% OF UK WORKERS 31 ONLY 13% OF BRITISH people can see themselves working in a traditional employment situation in 2025. are now using the gig economy to supplement their income. 5 MILLION UK WORKERS 1 IN 5 UK EMPLOYEES (400,000) generate up to £1,500 of weekly income from this. are already in employment as a result of the on-demand economy. But rather than simply reviving the old economy, freelancing is building a new one in its stead - and dragging policymakers along for the ride. Nor is this a blip, as ONS figures have shown that freelancing has grown steadily since the 1990s, long before the economic downturn in 2008. And that's helped with recovery – 40% of new jobs in the last four years have been in self-employment. FREELANCING ECONOMY THE FUTURE OF WORK 1 CAREERS WILL THE MIDDLE MARKET COULD OUTFLANK {-} BECOME MANY SHORT-TERM GIGS BIG CORPORATIONS Because they'll be able to source and MONTH Like the name suggests, the gig hire candidates on a flexible, economy will cause a cultural and economic shift towards portfolio project-by-project basis, savvy companies and entrepreneurs could gain purchase on big corporations in order to compete directly. careers - familiar to anyone who's worked in journalism or the media. Workers could soon begin to see themselves as part of a global network of professionals, rather than holding affinities with actual companies. This means that workers will work on short-term assignments, possibly on a one-off basis, for anywhere from one hour to two years - operating Like an agency, albeit as individuals. 4 A NEW GENERATION OF ENTREPRENEURS THEY'LL DRIVE UP WAGES SKI LLS WILL APPEAR Because they're no longer As they move from project to project, workers will inevitably have to develop dependent on employer-determined salaries, and can set their own rates entrepreneurial skills along the way - planning their time, marketing themselves, and building new skills to per project, workers will Likely see their incomes increase. expand their portfolio. Since companies will be looking at portfolio careers, they'll be more willing to pay extra for experience and required skills (which is already happening on e-lancing markets like UpWork). Workers will need to be totally self-sufficient if they want the perks of freelancing, i.e. lucrative pay and flexibility. AN OVERHAUL OF THE TAX CREDITS SYSTEM TAX CREDIT The Government will likely need to reduce the administrative red tape currently smothering freelancers. This will necessitate an overhaul of the tax credits system, since job growth is still at the lower end of the income distribution. There'll also need to be some insulating measures to mitigate weaker job security and unpredictable incomes in the gig economy. Right now THE GIG ECONOMY is in its infancy, but as it matures and spreads outwards the economy will become increasingly unrecognisable. SOURCES Gardiner, L. (2015). Does the gig economy revolutionise the world of work, or is it a storm in a teacup? economist.com Keely, G. (2015). Rules governing worker protection in the gig economy look set to change in 2016. theguardian.com Mason, P (2015). Postcapitalism: A Guide to our Future. London: Allen Lane. Office for National Statistics. (2014). Self-employed workers in the UK – 2014. ons.gov.uk Parliament. (2015). The self-employment boom: Key issues for the 2015 Parliament. parliament.uk Prosser, D. (2015). Meet the Britons getting rich from the sharing economy. forbes.com PwC. (2014). The future of work - a journey to 2022. pwc.co.uk Schram, B. (2015). Face of the sharing economy: Young male Londoners lead the way with gig firms like Etsy and Uber. ibtimes.co.uk Schram, B. (2015). Sharing economy: 87% of Brits see 'gig economy' taking over from 9-5 working days in 10 years. ibtimes.co.uk Hatfield, I. (2015). Is being self-employed becoming the new normal? newstatesman.com On Stride O OO This image is licensed under the Creative Commons Attribution-Share Alike 4.0 International License - www.creativecommons.org/licenses/by-sa/4.0 BY SA FINANCIAL %24 15