For those not familiar with the term, the Gig Economy means accessing products and services on demand. The word comes from “gig” as we know it from the music industry especially, and all kinds of things can be part of the Gig Economy – from cars to workers. The Gig Economy is on the rise mostly due to digital developments, and is sometimes referred to as the Sharing Economy – but there is a difference:

• The Gig Economy: self-employment working across several “gigs” or projects
• The Sharing Economy: sharing something you possess with someone else

One of my early stage investments, WeClean, is an example of a Gig Economy company, but it is not a Sharing Economy company. WeClean is a marketplace for accessing cleaning services on demand. It allows cleaners to find new clients and allows people to find workers that can clean their homes. Since it does not entail swapping of products one side owns, it does not match the description of a Sharing Economy company.

According to The Intuit 2020 report, 40% of Americans will be working as independent workers (freelancers, contractors and temporary employees) by 2020. Forbes has made a list of the 5 reasons why there will be more independent workers, and it reads as follows:

1. It’s the Internet (and more specifically online marketplaces for services): Businesses use the web to find talent and services, and prospects find new gigs and projects via different online services.
2. Technology empowers people to work from anywhere: Especially the smartphone has made people become more flexible to work from wherever they´d like – without the commute.
3. Follow the money: Most people earn more when working independently than in a traditional corporate job.
4. We want control: People want control over their lives as their lives have become longer and more fluid. People don´t follow the traditional pattern any longer, and easily go back and forth between studying, working at companies, working independently, go back to university, then back to working for a company, and so on.
5. Brand building isn’t just for the big guys: It has become easier for people to promote themselves without the support from a huge marketing budget.

Although the Gig Economy opens up opportunities and allows people to lead a flexible life by working when they want to, it does also raise discussions around the protection of workers. Many people point towards the industrial society in the 1800s, and how unions grew due to the fact that workers where not protected. Hillary Clinton has said during her presidential campaign that “This on-demand, or so-called gig economy is creating exciting economies and unleashing innovation. But it is also raising hard questions about workplace protections and what a good job will look like in the future.”

There will probably grow new sorts of labor protection schemes around the new Gig Economy. A couple of months ago, I saw a representative from The Norwegian Confederation of Trade Unions (LO) speak against the Gig Economy all together, and it almost seemed as if LO sees this new worker trend as a threat towards their “business model”. Taking on a protectional attitude in these times of change, is not viable. If they do not see it as their role to find ways to protect workers in the Gig Economy, someone else will.

At the moment, most “Gig Workers” must turn to private arrangements and stock up on private insurances and other services to protect themselves as a worker. For me (I consider myself a “Gig Worker”), this really works fine, as I do not expect public organizations to take care of me on this matter. However, I do expect these organizations to work with society as it changes, and not against it.

Why should you care about the Gig Economy?

As the Gig Economy represents such a fundamental shift in how companies and workers interact, it will affect you in one way or another during your professional life. Although the numbers mentioned here are related to the US, we will see a growing number of independent workers everywhere.

Here are a couple of examples of roles and pointers on how they will be impacted by the Gig Economy – whether you look at it from a working or investing point of view:

• Becoming a Gig Worker yourself: What to do if you see that your skill-set probably lives better outside the realms of a corporation? Then you should be very aware of what your professional strengths are, keep an interest in the markets you serve to ensure your skill-set matches the market needs, and take charge of your own learning and development throughout your career. By having an open mind and embracing new elements that affect your job, career and income potential, you will find that the change towards becoming a Gig Worker may not be as scary as it might otherwise have been. The difference is that by staying on top of your own personal change, it feels like you are in the driver seat and not just coming along for a ride you don´t know where is going.
• Handling Gig Workers from a corporate perspective: If you stay working at a large corporation, odds are a bigger and bigger part of the company´s workforce will consist of external resources. Finding out how to manage this group of workers in a good way, demands new skill-sets and managerial ways. Harvard Business Review has written a book called “Agile Talent – How to Source & Manage Outside Experts” which allows you to dig deeper into how to manage external resources from a performance perspective.
• Handling investments in the Gig Economy: Investing in a Gig Economy is not easy. Whereas wealth management in earlier days meant you could chose a few, larger investments and watch them closely, the odds are that moving forward, wealth managers will need to make more frequent and smaller investments. Their portfolio will probably become more diversified, and they need to figure out how to follow a broad range of investments in a doable manner.
• Investor relations in the Gig Economy: The Gig Economy means companies become leaner and meaner. It also means that more people are taking charge of their own investments. This means that companies should expect to see more unskilled investors making smaller investments, which means that companies must handle a communication flow towards a larger pool of investors with less people. These new investors will have their own expectations on how companies handle their communication flow, so companies will need to handle their investor relations more efficiently and towards a broader and more diverse group of investors.

Whatever your professional role or the stage you are in your professional life, you will somehow become impacted by this growing working and economic trend. This infographic gives a good overview of the Gig Economy and this report by the Centre for European Policy Studies  sheds some light on what they call the “Collaborative Economy” in EU.