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4 Predictions for the Future of the Sharing Economy

Business.com / Last Modified: June 28, 2018
Image credit: Montri Nipitvittaya/Shutterstock

More people are choosing flexibility and control of their own schedules over the security of a stable income and benefits. This has led to the rise of the sharing economy, but the system has yet to be perfected. Here are some developments I think we'll soon see.

Freelancing is booming. In 2017, there were over 57 million freelancers in the U.S., which is a 30 percent increase from 2016. This number is made up of full-time freelancers as well as those who do a combination of traditional jobs and freelance work. If freelancing continues to grow in this way, it's estimated that by 2027, half the country's workforce will be freelancers. Automation has started to make many traditional jobs obsolete. Freelancers' frequent reskilling makes them well equipped for the future, because their abilities are constantly growing and changing as needed.

Freelancing does, however, come with its own set of challenges. One main problem facing freelancers is a loss of the stable income that a traditional employer provides. Freelancers have to navigate finding their own clients and creating a brand that showcases their skills and makes them attractive to potential clients. The other problem is employment benefits. Typically, an employer provides paid time off, sick leave and other benefits. Freelancers are not provided with these benefits, as they are their own boss. Thus, when they are sick or go on vacation, that is money lost.  

Is this making freelancing less attractive? No. According to a recent study, 70 percent of freelancers say they would rather earn more money and purchase their own benefits than receive them from an employer or another third party. Additionally, freelancing offers flexibility of schedule that a typical 9-to-5 job just doesn't allow.  

As many in the workforce choose either to work solely for themselves or to supplement their primary employment with freelance work, and those numbers continue to rise, we are bound to see huge strides in this arena. Here are some developments I predict we will see in the near future.

Prediction #1: Blockchain will take the sharing economy to the next level.

The sharing economy (also known as the freelance economy or on-demand economy) has played a part in the trend of companies hiring independent contractors and freelancers, as opposed to obtaining a complete full-time staff. The sharing economy was powered by the rise and rapid development of technology. However, this economy has its flaws. Freelancers don't have income predictability or benefits. Many of them also rely on freelancing platforms and marketplaces to find clients. Platforms like these are a great way to find work, but they also charge heavily for this service. That's where blockchain comes in.

Blockchain is a decentralized network of providers and users, meaning that there are no go-betweens with their associated (and often incredibly high) service fees. Thus, freelancers can work directly with their clients. Blockchain has innumerable uses in the current market and is helpful in most value-exchange transactions.

Blockchain is also very useful and beneficial in the sharing economy. Blockchain-type systems create smart contracts, which are self-executing contracts between the client and freelancer. When the task is completed, payment is automatically delivered to the freelancer, saving them the time and hassle of waiting to receive their payment.

Prediction #2: Blockchain will trigger a disruption in the sharing economy.

As mentioned above, what makes blockchain so attractive is its decentralized nature. It is slowly becoming easier for freelancers to cut out the middleman and find clients seeking their skills by themselves, saving them money on intermediary fees.

Blockchain ledgers revolutionize how people currently manage data and systems management. Instead of a single server, blockchain-based systems spread the load, so data cannot be altered without it being noticed. These ledgers protect both the freelancer and their client. Human interference is limited, leading to smoother, more seamless transactions, so both parties are satisfied in the end.

There are parallels between the internet and blockchain. The internet was the catalyst for the sharing economy by allowing freelancers to connect with those requiring their services more easily. Blockchain will simplify this even further by removing intermediaries who attempt to control (and extract money from) the freelancing sphere; this will disrupt the current sharing economy and lead to a whole new system for freelancers.

Prediction #3: It will become common for corporations to hire freelancers instead of full-time employees. 

In the past, the norm was for corporations to hire full-time employees. However, recent trends show that companies both large and small are more frequently looking for freelancers to complete projects.

There are a few possible reasons for this. Many companies have found that one perk of hiring a freelancer over a full-time employee is that it's sometimes less expensive (for example, because they don't have to provide benefits).

Additionally, freelancers often have very specific skills and expertise that may not be as easy to find in a traditional full-time employee. Therefore, the corporation can find a person to fit an exact need. This is useful for small and midsize companies. For example, the company might need a web designer for a single project. It wouldn't really have use for a full-time designer after this, so a freelancer would fill this role perfectly.

Prediction #4: There will be more focus on collaboration over competition.

The traditional model has been that competition is healthy – and it is. However, collaboration is just as useful and could have better outcomes. Freelancers could benefit from other freelancers, even those who operate in entirely different industries.

The same goes for the platforms freelancers utilize. These can definitely coexist as separate entities, but the possibilities become exciting to think about if these platforms allow freelancers to gain insight, help, and support from each other.

 

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