Gig Economy Statistics – Why is it Growing?

The gig economy referred to as “the sharing economy” refers to a business model where consumers share resources rather than purchase them. It’s also called the collaborative economy because it allows people to work together to create products and services.

According to a study conducted by Google Trends, the search volume for the term “gigs’ has increased by 300 per cent since 2011.

How does the gig economy work?

In this economy, individuals can sell their time instead of selling their goods. As a gig worker, you would be able to set your own price and work on projects based on how many hours you’re willing to commit to the job.

Gig economy examples:

Gig economy businesses include Uber, Airbnb, TaskRabbit, and many others. These gig companies allow customers to hire independent contractors (or freelancers) to perform specific tasks.

• FieldEngineer – It’s an online platform for finding local field engineers for on-demand engineering (IT/Networking/Telecom/Help Desk) services.
• Uber – A ride-sharing company based in San Francisco, California, United States.
• TaskRabbit – An online marketplace for small jobs such as running errands, assembling furniture, and cleaning houses.
• HopSkipDrive – A car service platform based in New York City, New York, United States.
• Fiverr – Online marketplace for micro-tasks like graphic design, programming, SEO, virtual assistant, etc.
• Airbnb – Platform to find temporary accommodation such as apartments, rooms, villas, etc.

Some more freelance apps like UpWork, Fiverr, Peopleperhour, Elance, Guru, Workamajors, and Remote. co, etc.

The history of the gig economy

The gig economy can be traced back to the early 1990s when the internet became widely available. At this time, online job boards began popping up which allowed employers to post their open positions. However, these sites only provided a limited selection of jobs.

In 2008, the idea of outsourcing was introduced to the world. Companies started hiring workers outside of their own offices to complete various tasks. For example, they might have employees who worked remotely while sitting at home.

Freelancer word came into use in the year 2012. They had clients who paid them directly.

In 2014, the first peer-to-peer marketplaces appeared. These include sites like Craigslist, eBay, and Etsy. These markets allowed buyers to connect with sellers to buy goods and services.

The concept of sharing economy was born in 2016. Sharing economy platforms allow users to rent out their unused items. Examples include Airbnb, Lyft, and Turo.

In 2017, the gig economy took off. According to one study, the gig economy grew by 50% between 2013 and 2015.

The gig economy reached $2 trillion in 2018. 

Since the year 2019, the gig economy has been experiencing an unprecedented growth rate. As per a report published by Statista, the gig economy is expected to reach $4 trillion by 2023.

What is the future?

According to a survey conducted by Gallup, around half of all U.S. workers plan to work independently soon. About 60 million Americans are currently working as freelancers. 

The gig economy is also expected to expand in emerging economies, especially those in Asia. For instance, China is predicted to have the largest number of freelancers by 2025.

Growth of the gig economy

According to recent research, the gig economy is set to experience exponential growth. It is forecasted to grow at a CAGR (Compound Annual Growth Rate) of 25.7% during the period 2020–2025.

A recent study found that the gig economy is projected to generate $1.5 trillion by 2024.

Growth factors of the gig economy:

There are two growth factors of the gig economy.

Technological advancements have made it easier for small businesses to operate online. As a result, many small businesses have shifted from traditional brick-and-mortar locations to digital platforms.

Demographic shifts have also contributed to growth in the gig economy. Millennials are the largest generation in the workforce today. They tend to prefer flexible work arrangements and they are willing to accept lower pay if it allows them to work from home.

Growth of the gig economy by statistics:

Find the most up-to-date glorious statistics and facts on the global gig economy.

1. Nearly 40% of the American workforce now earns at least 40% of their income from gig work.
2. A survey found that 12% of the U.S workforce began freelancing after COVID-19.
3. About 36% of American workers are part of the so-called ” gig economy.” (Gallup)
4. According to a recent survey, 78% of gig workers say they’re happier than those who work traditional jobs, while 68% say they’re healthier.
5. The percentage of independent freelancers who choose to freelance by choice increased from 55% to 67%. Gig economy workers who said they chose to be self-employed fell to 59% in 2020.
6. According to the Bureau of Labor Statistics, more than 70% of freelancers use online marketplaces and gig economy websites to find work.
7. The gig economy is growing three times as fast as the overall US workforce. By 2027, over half of the US workforce is expected to be working in the gig economy. People aged 18-34 are most likely to work in the Gig Economy. The global gig economy generated $204 billion in gross revenue last year. Gen-Z most likely works as freelancers in the gig economy.
8. The number of freelance workers has increased by 24% from 2008 to 2015.
9. The mean freelance hourly wage ranges from $10 to 28 worldwide – Payoneer.
10. Americans spent $1.07 billion on freelancing before the COVID-19 pandemic. 33% of freelancers say they’ve had their work hours cut due to the coronavirus.
11. The MBO State Of Independence Report points out that the revenue earned by both full and part-time independent workers last year equals about 5.7%of US GDP.
12. More and more freelance workers are increasingly comfortable working independently, with approximately 56% saying they feel more financially secure.
13. In 2020 alone, millennials fueled the expansion of freelance work, and they’re responsible for one-third of all freelance workers.
14. Freelance workers are predominantly male (56%), college-educated (66%), with a median income of $100K+, and living in urban areas (50%).
15. According to a 2020 study, 71% of freelancers in the U.S. reported participating in freelance work for them to have flexibility in their schedules. A further 66% said that they freelance so that they can be their own boss.
16. According to the 2020 Freelancer Salary Survey, 34% of freelancers use Facebook to promote their services, followed by LinkedIn with 29%.
17. Three in ten freelancers have applied for funding and most found the funding useful for their business.
18. By the end of 2022, roughly 25-30% of the U.S. workforce will be contingent, and more than 80% of large companies will significantly increase their use of a flexi­ble workforce.
19. By 2025, millennials will represent 75% of the global workforce. According to the World Bank, millennials make up 25% of the global workforce. With Baby Boomers retiring, millennials will continue to rise in number.
20. By 2027, it is estimated that 86.5 million people in the United States will be freelancers, making up 50.9% of the total U. S. workforce.

Impact of COVID-19 on Gig Economy Growth

The gig economy is a relatively new phenomenon in the US. It has been growing at an average rate of about 20% per year over the last decade, and it is expected to continue growing as more people become comfortable with this type of work arrangement.

In 2019, the number of freelancers grew by nearly 2 million, while the number of employees declined by almost 1 million. In 2020, the number of freelancers grew by another 3.8 million, but the number of employees decreased by 5.3 million.

In 2019, the percentage of freelancers was higher among younger generations: 35% of those under 30 were freelancers compared to 26% of those ages 30–39, 22% of those 40–49, and 15% of those 50+.

FAQs

1. Is gig work good for the economy?

A new report from the National Employment Law Project (NELP) argues that gig-economy workers are not only contributing to a decline in traditional employment but also have significant economic benefits. The study found that these workers are more likely to hold multiple jobs, take time off when they need it, and contribute to local economies through spending.

2. How many people are working in the gig economy?

There are currently around 6.4 million Americans who are self-employed. Of them, 4.6 million are freelancers and 2.8 million are independent contractors.

3. Why is the gig economy growing so quickly?

Growth in the gig economy is largely due to technology. As companies like Uber and Lyft have gained popularity, they have created a platform where anyone can set up their own business. They provide access to capital, customer acquisition tools, and payment processing services.

4. Will the gig economy continue to grow?

The gig economy is a relatively new concept, and it’s not clear how much of an impact it will have on the labour market. But one certain thing is that the gig economy has already had some significant impacts in terms of job creation and growth. Workforce changes show that the growth of the gig economy expands further into different sectors of the economy.

Conclusion

With these trends continuing, we can expect the gig economy to continue to grow. We’ll see even greater numbers of young workers entering the market and older workers staying longer in the workforce.