Waves and enablers of the Gig Economy are interesting elements and worth a closer look. They give us the insight on how the gig economy has evolved thus far.
The gig economy is also a different beast from the normal economy. It did not create new economic activities but changed how such activities can be done differently. Remember taxis and food deliveries have always existed. So what led to these changes.
Current commercial practices and processes can only do so much. Pointless being digital for only some part of the journey. It is no longer acceptable to step out every now and then to make a call or complete a form. Speed and convenience became defining factors and the impetus for change.
These changes occurred over time but there are 2 distinct phases or waves.
Waves
Wave 1 is clear as it covers ride hailing and food deliveries in the main Most of us are familiar with it. It revolves around people with some down time or free. They can pick up supplemental income by doing short term work – gigs. It was not meant to be a permanent source of employment. Even those who pioneered the concept did not contemplate permanent employment. Things in recent years have however changed where some have taken it as the main source of income or full-time employment.
Wave 2 is not so obvious and remains below the radar but it is now the fastest growing segment of the gig economy. Like Wave 1, it was also about gigs but unlike it, these gigs were more full time and likely the main or only source of income. I will cover this in more detail further down this post. My guess is you might not be aware of Wave 2.
Waves and enablers went on to define the gig economy so lets get into the meat.
Enablers
Enablers are the struts and beams of the gig economy. They are the essential building blocks. They might not have been planned or designed for it but it was there for the taking. The 4 key enablers are;
- Mindset – the ability to think outside the box, consider disruption, drive demand, not wait for demand, to lead and not to follow
- Internet – the mother of all platforms and the precursor for the gig economy, no internet no gig economy
- Commoditising specialist knowledge – ability to commoditise, package and sell as a service by an ordinary individual
- Creativity – bringing together and making accessible and affordable varied creative talent to support enterprise
Enabler 1 – Mindset
The mindset had to change. How do we do something better? Can we do it differently? How do you create demand rather than wait for demand. Do consumers know what they want. I am heading into Steve Jobs’ psyche here!
If in a class exercise one has to pick the next new business or shape an existing one, it is very unlikely taxis and cabs would float to the top as a prospect. It is an established business and it was the same for decades. The only change was in fares to keep up with rising cost and inflation. The service standards remained the same. It worked. People generally accepted the status quo.
Disrupting the status quo became foremost. Challenging the mindset became the new normal. Uber’s Garret Camp, Travis Kalanick and the early team are arguably the pioneers that led the way. They looked at an existing activity and shaped it dramatically by challenging themselves and the norm. They created the gig paradigm that the World is now benefiting from.
Even regulators and legislators in the US, UK and most countries remain stuck to convention. Why fix something that is working. Initially refusing to change the regulations and licensing framework for the taxi industry when ride hailing started to gather pace. They could not accept change to accommodate the new model. Consumers and the general public thought otherwise and eventually forced their hands. They had to yield. A mindset change if you will.
Not just the innovators
Mindset change also includes bringing together like-minded people on the journey. And like minded people interestingly tend to congregate in similar locations. San Fransisco I am sure is not a surprise why Uber started there. Those who want to change things headed that way. People who are in position to fund these prospects began to gather there too. And it is not the water in California.
Customers and end-users also had to accept a change in mindset. It also includes people like Tony with a secure job and a car. He enjoyed a comfortable life, with no intention to drive for a living. He however had a mindset change. Tony driving on free weekends helped pay down the car loan faster and also brought additional income. Sam paid his tuition fees by doing deliveries in between classes. Unlike the regulators, ordinary people recognised the opportunities faster when the model surfaced. It was considered cool, and feedback was highly complimentary. All you needed was a smartphone and an app. Not too much to ask for.
Enabler 2 – internet, the precursor for the gig economy
The second biggest enabler is the internet and it includes PCs and smartphones. The internet is the mother of all platforms for the gig economy. No internet, no gig economy – that is the long and short of it.
The internet was not conceived for the gig economy. It was planned as a data communication super highway. Device vendors such as Apple, Microsoft, Google, Samsung etc did not have the gig economy in mind nor was it in their strategy. They aimed for office automation, productivity, digital commerce, online entertainment and social media in the main.
It’s not just the physical devices or the infrastructure such as hardware and software. It is how we interact with devices and applications. UI (user interface) and UX (user experience) became the game changers that significantly shaped the gig economy. It played a major part in website designs first but it did a lot more for the gig economy. Overnight UI and UX professionals became a vocation in high demand, not just full stack developers. How intuitive is the application interface when I book a ride or place an order and can I do it in 2 to 3 navigational steps? The steps had to be intuitive. It made a world of difference. Competition within the gig economy now rested on intuitive engagement with devices and apps. It was the last mile for the gig economy especially for the first wave.
Before moving to the 3rd and 4th enablers, it is time to introduce the 2nd wave. The 3rd and 4th enablers helped the first wave but turbo-charged the 2nd wave.
The 2nd wave
The 2nd Wave in the “wave and enabler journey” can be considered as the proverbial fork in the road.
2nd wave in the gig economy as pointed earlier is different, vastly different. For a start unlike the first wave, it did not focus on consumption of services or the end of a transaction. The 2nd wave was more about how services are provided and who provided them and it was in the middle.
The 2nd wave covers new sectors of the economy that saw the advances in the first wave and jumped on it. They did not commandeer the model of ride hailing and food delivery, they actually created their own models. It is so different that one does not associate it with the gig economy. The only tangible links between the 1st and 2nd wave are terms such as “independence” and “flexibility and to some extent “entrepreneurial” and all are indeed attributes of gigs.
More importantly those in the second wave are generally not looking for secure or permanent employment. They are looking for paid engagements and commissions and they are in a position to set terms for engagement and payment. They are also able to to accept or decline an engagement.
So how does it operate and what are the sectors in the 2nd wave?
Tinder like
These operate like Tinder and other dating apps. Called “platforms” they bring together those who need help with those that can provide the help. The help here refers to provision of services. They range from writing, project management, IT development, design work, content delivery to online educational and training classes. The list is endless. Platforms are the new Yellow Pages and the recruitment board.
Examples of “platforms” for the 2nd wave are Upwork, Fiverr and Airtasker. Upwork is the most senior and best recognised. Try signing up to Upwork to get a feel what is on offer and get a feel of the new World.
The mechanics of “platforms” are straightforward. Platform owners such as Upwork allow people to list what they can offer and what they are looking for. Search capability, keywords and filters are available to narrow the list of candidates for prospective buyers. This make the effort fast and convenient. Prospective buyers of services can message shortlisted candidates seeking CVs, clarifications and are able to negotiate terms and timelines.
Platforms also facilitate to reduce fraud, undelivered work and poor performance by displaying candidates’ profiles, reviews and reputational indicators similar to E-bay. Some interesting and important features of platforms are payment protection, escrow services and dispute resolution. This leads to confidence in the platform.
Enabler 3 – Commoditising specialist knowledge
Commoditizing specialist or technical knowledge that requires formal level of training and some sort of certification is the 3rd enabler. It allows the person possessing it to package and sell his skills. An ordinary worker or employee with skillsets that can be certified is able to commoditize his ability for the first time. Something professionals like doctors, lawyers and accountants having been doing.
The single biggest cohort in this space are IT related skill-sets and vocations. Example are web developers, full stack developers, cyber security experts, UI and UX practitioners and application developers. They can service big corporations, small businesses and help someone at home to setup a hobby website. The starting rates are attractive. There are also accountants, tax consultants, landscape designers and architects amongst others that have come onboard.
It will be a matter of time before large companies and not just small businesses tap these platforms to find the right resources especially in order to carry out short term or project work. It is not a surprise that companies in the IT industry are heading to this platforms to recruit and bypassing traditional recruitment agencies when urgency is involved.
Enabler 4 – the creative genre
The last set of enablers is the formation of the creative genre or pool. They can be freelance journalists, writers, copywriters, editors or graphics designers. They can also be digital marketing specialists, proof readers, editors for photo, video and documentary work. Note the level of creativity involved in these vocations.
Creative talents are precocious and often hard to herd like cats. They are generally difficult to find and secure for small businesses in the old world. And not cost-effective to have them in-house. That changed with these platforms.
Say you want to setup a website to sell wedding dresses from your home. It’s a passion that you would like to turn into a business. You head to one of these platforms, source a web developer then pick a wedding dress designer from Norway because you seen their work online and would want to introduce these fresh designs to Australia. You then seek a digital marketer to reach a wider audience. All done from the comfort of your home and possibly in one day. And the resource pool that you are tapping is likely from the same platform but worldwide.
Hope by now you see how waves and enablers have come together.
More to come
The 2nd wave is much bigger, more disruptive and far reaching. It has pulled in vocations across the board. More people are prepared to leave secure employment that are typically 9 to 5. They want to work from their homes or at leased work desks of their choosing. They value independence and flexibility. With requisite skillsets and experience they promote themselves online using more than one platform. They have become entrepreneurs. They are typically young and confident.
The waves and enablers are a start to understand this phenomenon. There are some social and personal attributes that are integral in driving the gig economy. First is society’s move towards independence. The employer-employee relationship does not appeal for a growing number, notably the younger generation. They are qualified and aware of their value. Secondly flexibility in hours has always been a consideration for many. The gig economy delivers it. Thirdly there is the aspiration among some to be entrepreneurs. The gig economy allows easy and affordable entry to entrepreneurship. It cost very little to try this avenue while still in secure employment. And many start testing the waters by doing work in the gig economy after hours or during weekends while in regular employment.
Keep watching
Give it a go as it is now easy. Here is an interesting example. I know of a dentist who rents out expensive designer wear in Melbourne. She does this on social media anonymously showcasing her small collection. Orders and confirmation are done by email. She processes these orders and arranges for courier pick-up when she ends her work day. None in her vocation know about this. I only found out by accident as her partner let slip after he had to meet a courier and had to rush out.
Apparently she likes designer wear and is only looking to cover her purchase cost plus a little side income. With the gig economy you do not have to think big. It’s also a lifestyle where 2 different passions are possible.
In the economic puritan world, a dentist focusing on her career can do very well. After all it’s the discipline that has the highest starting pay among all fresh graduates in Australia. Why turn to something less certain and split the focus. However we are not all built like that, I guess. In her case, she enjoys both and is thinking out of the box and money alone may not be the focus. It’s new world and a different world.
Keep watching this fascinating journey, something I suspect has a way to go. Maybe there will be more waves and enablers to come.