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4 Reasons to Invest in the Gig Economy

By business.com editorial staff,
business.com writer
| Updated
Mar 26, 2020
Image Credit: WAYHOME studio / Shutterstock
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Gig economy players are disrupting economies, communities and, most importantly, history.

  • The gig economy is disrupting the way in which we work, who we work with and where we work from.
  • The gig economy is defined as a free market system in which temporary positions are common and organizations typically contract with individual workers to complete short-term engagements.
  • Some examples of gig workers are photographers, robotics engineers, ethical hackers and freelancers.

The First Industrial Revolution introduced the steam engine. The second harnessed the power of coal, and the third was brought about by the internet.

Today, we live in the Fourth Industrial Revolution, one powered by the gig economy, which is disrupting how we work, who we work with and where work from.

Defining the gig economy

If you've ever rented your apartment through Airbnb, freelanced as a web developer or driven in an Uber, you're part of the "gig economy." According to WhatIs.com, "gig" is a slang term used to describe a job that is only taken on for a short period of time.

The definition of a gig economy is an environment in which temporary positions are common, and organizations contract with independent workers for short-term engagements.

The gig economy is a free market system in which temporary positions are typical and organizations contract with individual workers to complete short-term engagements.

One of the reasons for the rise of the gig economy is the fact that we have increased access to an array of new technologies that are making it possible for people to work virtually anywhere. Additionally, digitization, or the use of various types of software to make workplaces more efficient, has caused various jobs to become obsolete.

Gig workers

These are some examples of who the gig workers are, according to Millo:

  • Freelancing: One of the top types of gig workers is freelancers. This includes writers, graphic designers, web designers and social media managers.

  • Ethical hackers: Another example of gig workers are ethical hackers. Ethical hackers bypass firewalls and crack encryptions to gain access to sensitive information and help companies close security loopholes before hackers find them.

  • Robotics engineer: Robotics engineers are those who create concepts, designs and models of the mechanical elements in a robot mechanism.

  • Photographers: Although this is by no means a new job, photographers are self-employed now more than ever before. They work with several companies and websites to provide them with pictures of all kinds.

Pros and cons of the gig economy

According to Western Governors University, there are various pros and cons of the gig economy.

Pros

  • More flexibility for workers
  • Greater independence for workers
  • A wide variety of jobs are available
  • Many gig workers work fewer hours for more money
  • Less costly for businesses
  • Diverse pools of potential workers
  • Ability to scale more quickly

Cons

  • No benefits
  • Quarterly taxes and personal expenses
  • Isolation
  • Increased levels of stress
  • Workers are less reliable and loyal to businesses
  • Tight regulations on the status of contractors

The gig economy shows no sign of stopping, so companies that want to keep up might want to consider utilizing gig workers, if they haven't already.

Here are four reasons to get on board with this trend.

1. The Information Age has birthed an entirely mobile generation.

Work can now be done with a computer and an internet connection. Financial bloggers can write from their laptops, sales consultants can stay in touch with the home office while traveling the world, and YouTubers can share makeup tutorials from any location.

2. Millennials and Gen Z are more interested in flexibility and balance.

Many millennials prioritize flexibility and a good work-life balance. According to a study by Wrike, 44% of millennials were more likely to somewhat or strongly agree that they could do their jobs just as effectively from as they could from the workplace.

3. The gig economy makes more financial sense for companies for almost all short-term projects.

Contract workers can help firms save money compared to the costly benefits a company pays to traditional full-time employees. When a project is complete, companies can spare the cash they would have otherwise spent by retaining a full-time employee.

4. The modern gig economy is built to enable equality and access on a global level.

Global internet access and gig economy platforms have turned the once impossible into a reality. Think about this: Developers, coders and authors in countries like Indonesia and the Phillippines now have the ability to tap into Western developer salaries, nearly five to 10 times their local salaries, through the gig economy.

Today, the gig economy, through platforms like Upwork, Uber and even private gig economy services like Design Pickle, afford startups and modern businesses the nimbleness to quickly execute on necessary tasks within a company, without an in-house team. 

These same businesses can quickly upsize and downsize their company to effectively use capital without the baggage of broken feelings, disgruntled employees and equity allocation. These gig economy players are not just disrupting economies and communities, they are disrupting history.

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