The gig economy the economic backbone of the future by brodmin.com
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The Gig Economy The Economic Backbone of the Future by brodmin.com
The gig economy represents a free market system in which organizations and independent workers engage in short-term work arrangements.
The gig economy the economic backbone of the future by brodmin.com
Gig Economy – The Economic Backbone of the Future?
The gig economy represents a free market system in which organizations and independent
workers engage in short-term work arrangements.
That is the general definition of this topic.
But how much do we know about the gig economy and why is it becoming so
increasingly popular in the past few years?
We have conducted a study to examine all aspects of the gig economy to shed new light on
this topic and give guidance to all professionals looking to explore freelancing.
This study examines two main areas of discussion in gig economy.
Part of the study focuses on the gig economy itself in terms of size and growth, both in
selected few countries and globally.
The second part explores the gig economy workforce and investigates areas such as
workforce size, remuneration, growth rate, financial liberty, anxiety and working
Summary of key finding of the gig economy
Gig Economy Size
It is estimated that the Global Gig Economy will be worth 347 billion dollars in 2021.
On a global scale, design and tech freelance jobs are the most popular with 59% of gig
workers doing them, but oversaturation of talent in these fields is bringing down the pay.
In the US, 44% of gig workers considered freelancing to be their primary source of
income, with 60% of workers engaging in freelancing activities at least weekly.
Gig Economy Growth
Global Gig Economy is expected to grow from $204 billion in 2018 to $455 billion in
2023, a Compound Annual Growth Rate (CAGR) of 17.4%.
Number of freelance workers is steadily increasing in the Western World. For example,
number of US freelancers is estimated to grow from 57 to 86 million by 2027 and the UK’s
gig economy workforce more than doubled from 2016-2019 as it accounts for 4.7 million
Gig Workers’ Financials
The worldwide average hourly rate charged by freelancers is $21.
In the US, the number of high-earning freelancers (reported income of over $100,000)
keeps growing year over year and it currently stands at 3.1 million people (20% of the
Majority of US full-time freelancers are not prepared for an unexpected financial trouble
with 80% of them reporting an unexpected expense of $1,000 would be difficult to pay.
Gig Workers’ Satisfaction
Overall, gig economy workers are more satisfied with what they are doing: 79% of full-
time independents said they were happier working on their own than at a traditional job
(in the US).
Gig workers are more anxious about their finances: 45% of full-time gig workers have a
high Economic Anxiety Index score compared to 24% of traditional full-time employees.
Freelancers are generally concerned about their working conditions: 54% of gig workers
have no access to employer-based benefits (in the US, data from 2017).
The Global Gig Economy 2021
According to our research and the data provided by Mastercard, it is expected that the
global gig economy will be worth almost 350 billion US dollars this year.
Vast majority of the gig economy grow value comes from transportation-based services
(such as Uber) and asset-sharing platforms (such as Airbnb).
If we examine the global gig economy state from 2018 (when the latest data is available),
we can see a clear image of division of capital in the gig economy:
TRNS ( Transportation-Based Services) $117.8 (57.8%)
ASSET (Asset-Sharing Services) $68.1 (30.3%)
HGHM (Handmade Goods,Household & Misc Services $16.7 (8.2%)
PRFS (Professional Services) $7.7 (3.8%)
Transportation-based services and asset-sharing platform are valued at nearly 90% of the
entire gig economy.
This is not surprising given the global, rapid expansion of services from these categories
that could be provided on a freelance basis, fueled by the incredible success of companies
that offer them, such as Uber and Airbnb.
When we look at the number of workers currently contributing to the gig economy, it is no
surprise that the economy overall is worth so much. For example, 57.3 million people
freelance in the US that number is the UK is at 4.7 million people.
The stark difference in numbers between these two countries can probably be explained
by more than just the total population difference; according to Mastercard, 44% of Global
Gig Gross Volume in generated by United States residents.
Global Gig Economy is worth almost $350 billion dollars in 2021.
Design and Tech Leading the Way
According to a report on global freelancer income published by Payoneer, we can see that
workers in the field of Web & Graphic Design are most prominent with 30%, followed by
workers in Programming at 19% and workers in IT at 10%.
Primary field of freelancing:
We can see that Programming and Web & Graphic Design fields hold almost half of the
However, it is interesting to analyze the main hourly rate of these fields, in order to get a
better understanding on the impact workforce has.
Main hourly rate by primary field:
Here we can see that the rate distribution does not have such a high variance from the
main as opposed to the data in the previous graph, where two fields dominated the
Another key point to observe is that the most widespread jobs mentioned before are not
as lucrative as once perceived.
Programming and Web Design are traditionally high-paying jobs, but we can see that the
mean rate for these fields is $25 and $19 USD respectively; not nearly as high as in
This occurrence can be the result of workforce saturation in these respective fields.
As we have seen from the first graph, these two fields make up almost half of the
workforce market, which can naturally lead to an increase in supply and reduction of
Programming and Web & Graphic Design are the most popular jobs, encompassing 49%
of the workforce.
US Freelancers Most Engaged in the Gig Economy
If we consider the figure mentioned earlier regarding the level of contribution United
States has on the gig economy, it is no surprise to find out that its’ freelancers are most
engaged and most dependent on the gig economy.
Study done by Edison Research shows that for 44% of gig workers, their work in the gig
economy is the primary source of income.
When we look into the deeper division of population and their engagement in the gig
economy, we can see that women tend to rely less on freelancing as their primary source
of income, with 40% of female participants declaring in the study that gig work is their
primary source of income.
It is also interesting to see that more than half (53%) of the younger population (ages 18-
34) has work in the gig economy as their primary source of income.
This confirms that younger people tend to do freelance work more due to the recent
explosion in the digital gig economy and the ability to work completely online.
How often to you engage in freelancing [freelancers]
US freelancers are also very active participants in the economy.
A study done by Upwork shows freelance worker activity in the graph above.
We can see that 31% of gig workers engages in freelancing daily, while 29% of them
engage at least weekly.
We can also see that percentage of workers who are active declines as the activity period
gets longer, with 84% of the population doing freelance work at least once per month.
Given this level of activity, it is no surprise that the United States can contribute such
large of a share to the global gig economy.
44% of US freelancers do gig work as their primary source of income, and 60% of US
freelancers does gig work at least once per week.
Global Gig Economy Grows Each Year
Projected gross volume of the gig economy (Billions USD)
The gig economy is expected to grow to $455B by
year end 2023 in gross volume transactions.
Report done by Mastercard where the global gig economy has been examined shows a
significant growth in terms of gross volume generated from customers.
We can see that the output of the global gig economy has been $204 billion USD in
2018 and is expected to be at $455 billion USD by 2023.
This translates into a Compound Annual Growth Rate of a staggering 17.4%.
In other words, in terms of economic output the global gig economy more than doubles
every 5 years!
Some of the main driving growth factors on the future increasing supply of freelancers are
increasing digitalization rates, cultural shift toward embracing flexible work and the rising
cost of living along with a shrinking middle class.
On the demand side, growth in business and consumer needs for gig work is driven by the
“boom” of on-demand services, significant levels of VC funding in companies that deliver
freelance work capabilities and outsourcing of short-term tasks by businesses due to
Global Gig Economy grown at 17.4% each year and more than doubles every five years.
Number of Freelancers Steadily Rising in the West
The total amount of gig workers in the world grows every day and is predicted to keep
growing even higher in the future.
When we talk about the past growth, we look at studies done by the MBO Partners,
Upwork and University of Hertfordshire.
For example, the study from the University of Hertfordshire found that the amount of gig
works in the UK (defined as adults who had worked for an online platform at least once
per week) has grown from 2.3 million to 4.7 million between 2016 and 2019.
This is a significant rise in only 3 short years.
Furthermore, current US gig workforce of 57 million is expected to grow to 86 million
by 2027; this translates into a 50% in 7 years, which is an astronomical figure
considering the already enormous US gig workforce.
Number of occasional independence in the United States
Finally, as we look at the growth of occasional gig workers in the US, we can see yet
another confirmation of gig economy’s workforce growth.
The number of occasional independents in the US (those who do gig work less than 15
hours per week), has grown by 42% in a 3-year period and it was holding at 15 million
workers in 2019.
UK gig workforce doubled in the 3 years by 2019 and US gig workforce will grow by
another 50% by 2027.
Worldwide Average Freelancer Hourly Rate is $21
Freelancers around the world earn $21 per hour on average, as per Payoneer.
Let’s examine these number in more detail, taking into account distribution among age
Main hourly rate by primary field
We can see that the younger generations are paid less than the world average, with
income steadily rising as the age groups progress.
Age groups of 18-24 and 25-34 are earning $16 and $19 per hour respectively, which is
lower than the worldwide average.
We can also see that these age groups account for 69% of the total gig worker population.
This tells us that there is disproportionate division of capital in the gig economy since
majority of the population is earning less than average, which is due to age and work
Furthermore, in US (according to Upwork), the median freelancer rate is $20/hour,
compared to an $18.80/hour median for the entire US workforce.
Furthermore, median income for freelancers in skilled services is $28/hour.
This shows that freelancers in the US are on average earning more than general
population which can probably give some reasoning as to why there is such a strong US
gig workforce and such a massive contribution of the US to the global gig economy.
Related reading: Late freelance payments
Average rate for freelancers worldwide is $21 per hour.
Number of High-Earning Freelancers in the US at 3.1 Million
According to MBO Partners, the average income for a full-time US independent is
$68,000 which is higher than the country’s average median household income of
The number of High-Earning full-time independents in the country is at a staggering 3.1
Just to clarify, to be a high-earning individual you must be making over $100,000
annually, according to the study.
Number of high-earning freelancers in the US has been steadily growing for the past
Between 2011 and 2019, that number climbed from 1.9 million to 3.1 million people,
which is a 64% growth for the period.
It is no surprise that the number of high-earning gig workers is increasing year over year
as the trend of working remotely and offering skilled services independently has become
increasingly popular in the recent years.
As of now, according to the MBO Partners’ report, full-time high-earning freelancers are
making up about 20% of its workforce.
High-Earning freelancers in the US make up 20% are at an all-time high of 3.1 million.
Unexpected $1000 Expense Difficult to Pay
In the United States, 80% of freelancers whose primary source of income is from the gig
economy reports they would have difficulty in paying an unexpected $1000 expense.
This is according to the report published by Edison Research where survey participants
employed in various field answered this question.
Would it be difficult to pay an unexpected expense of $1000?
percentage saying “yes”
Here we can see that majority of Americans have fears about unexpected expenses.
However, there is a noticeably clear distinction towards that perception between those
who are primarily employed in the gig economy and those who are not.
Staggering 80% of full-time freelancers have fears about unexpected expenses, compared
to 54% of people employed but not in the gig economy.
Furthermore, US freelancers dip into savings more often.
In the report published by Upwork, 63% of full-time freelancers withdraw funds from
their savings at least once per month, compared to only 20% of full-time non-freelancers.
This shows that although freelancing can be more lucrative in terms of freedom and
greater financial compensation, it can also add to the overall financial instability and
Related reading: Late payments & mental health
Unexpected expense of $1000 is difficult to pay for 80% of US full-time freelancers.
Full-Time Freelancers Satisfied with Jobs
Based on numerous research and publications, there is a general consensus that people
who decide to freelance full-time are quite satisfied with the change as well as with their
new careers and lifestyle.
According to the report by PYMNTS, 75.7% of freelancers would not quit their gig for a
Furthermore, the same report mentions that 60% of gig-dependent workers lack
alternative employment because they don’t want or need one.
Report published by MBO Partners can also provide us with some useful info regarding
job satisfaction among freelancers.
According to their survey, eighty-two percent of full-time independents say they are
happier working on their own, while 69 percent say it is better for their health.
Their confidence about job security is also at an all-time high.
Centage of full-time independent workers reports feeling more secure
As we can see from the graph above, 53% of full-time freelancers reported feeling more
secure working independently in 2019.
That is a 21% jump overall in the course of 9 years and it is the first time every that
majority of full-time freelancers are more secure working independently as opposed to
holding a traditional job.
82% of full-time freelancers are happier working on their own.
Full-Time Freelancers Anxious About Finances
Gig workers are usually more anxious about their finances compared to traditional
Due to the nature of the work, that might not come as a surprise, but it is an important
fact to know about the nature of freelancing.
Edison Research has developed an Economic Anxiety Index tool to measure the financial
anxiety levels of their respondents.
In their report on the gig economy, they have published the survey results of this metric.
Anxiety Index Score
Percentage scoring 50+ on “Anxiety Index”
As we can see above, 45% of respondents primarily employed in the gig economy scored
in the high anxiety bracket (score over 50), compared to only 24% of respondents
employed in traditional jobs.
It is interesting to see that 38% respondents whose income from the gig economy is
secondary also have high anxiety.
This can be due to the fact that parts of the freelance workforce are in the gig economy to
supplement their primary income.
Hence, having high anxiety levels about your financial situation can be quite expected.
45% of full-time freelancers have high anxiety levels.
Freelancers Concerned About Working Conditions
Working conditions of gig workers worldwide have not caught up to the working
conditions of traditional full-time employees yet.
This is not unexpected considering the contractual nature of gig work where financial and
health benefits are usually not part of the agreement.
Study conducted by University of Hertfordshire examined working conditions of
freelancers by conducting 13 descriptive interviews as part of their research information
Interviews revealed a range of physical and psycho-social health hazards. Some of these
were linked to working long hours, including long and unpredictable waiting periods (for
which they were not paid).
To confirm results of the interviews with some data, report published by Prudential offers
an outlook of how different traditional workers and freelancers are in terms of
financial/health insurance, at least in the US.
According to the report, over half (54%) of gig workers do not have access to employer-
Furthermore, gig workers have less than half the access to employer-based coverage than
that of full-time employees in terms of health insurance (40% vs. 82%), life insurance
(20% vs. 59%), dental insurance (25% vs. 66%), and short-term disability (5% vs.
54% of gig workers do not have access to employer-based benefits.
For our study, we have analyzed reports on the gig economy published by several major
international organizations whose expertise on the topic can be confirmed by their
All the reports used have been published in the last 3 years for accuracy purposes.
The publications we used in our own research have been done by the following
organizations: Upwork, University of Hertfordshire, Payoneer, Edison Research,
PYMNTS.com, Mastercard, Prudential and MBO Partners.
Data collection process for all the reports used has been consistent which is the main
reason for our selection of multiple reports to produce the results of our study.
The main data collection method for all reports has been conducting surveys, ranging
from 1,000+ to 20,000+ participants.
The only finding partially not related to survey data is related to working conditions of
freelancers (last finding) because University of Hertfordshire used descriptive interviews
as an additional data collection method in their research.
I hope you found this analysis of the global gig economy interesting and useful.
And now I’d like to hear from you.
What’s your #1 takeaway from this study? Or maybe you have a question.
Feel free to leave a comment below.