Gig entrepreneurship is the rising norm of doing business in free-market economies where entrepreneurs hire independent contractors/freelancers paid per job or per project basis instead of hiring full-time employees.
The system is old (100+ yrs), but especially as of 2020, there has been a big shift from traditional work to “gig” work (*). About 10% of Americans were “gig workers” in 1995. At the present, about 40% of the employees are “gig workers” in the US and this number is expected to be more than 50% by 2027. Just 2 years ago, the US economy benefited over 1.3 trillion dollars from these workers.
“Gig Entrepreneurship” is tightly connected to technology and it allows the gig employees to be “digital nomads.” It also allows them to work for different businesses at the same time and become more specialized so they can charge higher rates. They can work remotely and they have the freedom to have several part-time positions.
In this expanding trend, entrepreneurial companies prefer gig workers due to their flexibility, cost-effectiveness and efficiency. Entrepreneurs themselves work independently as freelancers or team up with other freelancers to produce higher value instead of founding startups. Major examples of some gig businesses which have become “unicorn entrepreneurs (**)”, are Uber, Lyft, Fiverr, Airbnb and Grubhub. Gig Entrepreneurship provides new opportunities especially during these Covid times for jobless people who are seeking part-time opportunities.
Lack of fixed income is the major disadvantage with these jobs since gig employees are not considered conventional full-time employees of the company with legal rights. This is a big issue as presently witnessed in the US courts for the Uber drivers.
With all its pluses and minuses, I am sure that we will see more and more Gig Entrepreneurship by freelancers who have different but synergistic skills forming teams so they can tackle higher-level and higher value-added projects.
(*) Jazz musicians conceptualized the term “gig” in reference to live performances in 1915. With the rise of temporary employment agencies following the Great Depression a job market came with it;
(**) An innovation-driven entrepreneurial startup which has a value of over $1 billion.