Editorial
Thinking Forward and the Gig Economy By Jonathan Ortmans
H
arvard economist Lawrence Katz and Princeton’s Alan B. Krueger found that the number of Americans with alternative work arrangements rose 9.4 million from February 2005 to November 2015. That was greater than the rise in overall employment, meaning there was a small net decline (0.3%) in the number of workers with conventional jobs from 2005 to 2015. I presumed that it was the Ubertype, disruptive companies driving this 50% jump in the so-called on-demand gig-economy. The available data – although a small sample size – suggested otherwise. The Katz-Krueger report “The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015” defines workers engaged in “alternative work arrangements” as those whose main economic activity are as on-call workers, temporary help agency workers, contract workers, and independent contractors or freelancers. Among these, the fastest growing group is contracted workers. This helped provide an answer. Workers who provide services through online intermediaries, such as Uber or TaskRabbit, actually only accounted for 0.5% of the labor force in 2015, according to the report. The online gig workforce is thus relatively small compared to other forms of alternative work arrangements. However the online gig workforce is growing very rapidly. For example, the Intuit 2020 Report argues that more than 40% of the workforce will be “alternative workers” by 2020. According to several experts, the gig-economy was intended to
supplement rather than replace workers’ income. However, the striking implication of Katz and Krueger estimates is that, essentially, all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements. This raises worker protection concerns and regulatory challenges. But neither the weak economy nor the sharing economy are the only factors driving the shift from traditional 9-to-5 jobs to independent work. There are many other non-economic factors at play. The World Economic Forum’s “The Future of Jobs” report, for example, identifies and weighs 18 different drivers of change in the workforce, concluding that in combination, “technological, socio-economic, geopolitical and demographic developments and the interactions between them will generate new categories of jobs and occupations while partly or wholly displacing others.” Should we be worried about these forecasts of a growing gig-economy? On the contrary. Technology has already opened new paths for individuals to drive their own destinies that are irreversible, giving us no choice but to think ahead of the trend and leverage it for all it is worth to workers and our economies alike. Here is why.
Facilitating worker retraining and experiential entrepreneurship education Demand for self-driven, skilled specialists is on the rise, posing challenges for worker re-training. Our traditional approach as a society has been expensive publically
funded traditional worker retraining programs that are often out of date before the curriculum is rolled out. The gig-economy breaks that challenge into bite-sized pieces, allowing workers to learn and try this and that, taking a less daunting, step-by-step approach to developing new skills. With the right motivation and vision, independent workers can more safely find their passion and learn needed related skills. They don’t have to wait to finish one job to start on the next. Furthermore, independent work allows people to acquire new skill sets while maintaining a work-life balance. The gig-economy puts learning on the job on steroids and lets workers more easily validate – or dismiss – different types of work, measured against personal priorities whether enjoyment, success or simply doing something that matters to them. Best of all, being their own boss exposes individuals to the essence of entrepreneurship and warms them to the notion of calculated risk-taking, which they may then choose to fully embrace, take as a skill to an established business, or for many avoid at all costs.
Worker fluidity drives ecosystem vibrancy From an ecosystem perspective, fluidity enables talent to recombine in a way that leads to more idea generation and better idea execution. As such, fluidity is a measure of the vibrancy of an entrepreneurship ecosystem.
54 June 2016 Black Business News www.blackbbusinessnews.net 1-323-291-7819