What is the market size of the current Gig economy? What is the estimated worth in 5 years?
Hello! Thanks for your question about the market size of the current gig economy and its estimated worth in 5 years. The short version is that there is currently no information available regarding the value of the gig economy's global market size. However, I did learn that the global gig economy could reach $2.7 trillion annually by 2025. Below you will find a deep dive of my findings.
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After extensive searching, I could not find any information on the current market size of the global gig economy. However, I was able to find estimates of the UK and the US gig market sizes in 2014. I also found the industry's estimated market size for 2025. You will notice large differences in the estimates of some of the statistics presented in this response. These figures are based on the findings by the McKinsey Global Institute (MGI). The reasons for these large differences are as follows:
1. The number of ways in which the term "independent worker" is being defined. As a result, many governments tend to undercount the number of independent workers in their countries.
2. Labour market policies are based on the traditional 9-to-5 jobs and do not take into account the number of taxpayers who earn money doing freelance work.
3. The MGI report takes all of the above factors into consideration in order to come up with a range of statistics based on their findings and the findings of the respective governments.
Please note that the terms "freelancer" and "independent worker" will be used interchangeably throughout this response.
UNPACKING THE GLOBAL GIG ECONOMY
The so-called "freedom economy" is growing fast around the world. According to the World Bank's 2015 online outsourcing (OO) report, global OO alone was expected to generate $4.8 billion in 2016. It is estimated that 50.7% of the world's freelancers come from North America, 29.3% from Europe, 11.4% from Asia, 4% from South America, 3.3% from Australia, and 1.4% from Africa. An estimated 49.7% of freelancer's work on a full-time basis, 36.6% on a part-time basis, and 13.6% on a part-time to transition to full-time basis. Below are the statistics for three of the world's largest gig economy markets.
1. The Gig Economy in the US
In 2014, freelancers contribute an estimated $715 billion to the US economy. In 2015, an estimated 54 to 68 million American's participated in some form of independent work. That is more than 33% of the entire US workforce. This is no surprise as more than 10 million American's rely on independent work to substitute their income.
2. The Gig Economy in the EU
An estimated 20% to 30% of the total EU workforce is made up of independent workers. To give you a better picture of the EU's gig economy below is the estimated number of independent workers in four EU countries:
- France, 9-21 million;
- Germany, 7-13 million;
- Sweden, 1-2 million; and
- Spain, 7-12 million.
3. The Gig Economy in the UK
There are an estimated 6-14 million independent workers in the UK who contribute an estimated £21 billion to the UK's economy.
HOURLY RATES FOR THE MOST POPULAR FREELANCE GIGS
Previously freelancing was viewed as creative work done by editors, graphic designers, and web designers, this also included IT-related positions such as programmers and project managers. This has not been the case in recent years, the gig economy now encompasses all types of roles.
Freelancers with more than five years of experience generally get paid anything between $59.15 - $84.55 and those with less that five years work experience get paid $44.87 - $49.96. Below are the hourly rates for the most popular freelance jobs:
- Software, $73;
- Photographer, $69;
- Project Management, $58;
- Video Production, $52;
- Programmer, $49;
- Graphic Designer, $49;
- 3D Illustration, $48;
- Web designer, $46
- Writer, $44;
- Illustrator, $42; and
- The average hourly rate, $59.63.
FUTURE TRENDS IN GIG ECONOMY
According to the McKinsey Global Institute, the gig economy could amount to $2.7 trillion annually by 2025. Researchers predict that in the next five years more than half of the US and the UK's workforce will move into the gig economy. It is no wonder why 32% of Millennials believe that they will mostly be working flexible hours in the future.
To wrap it up, there is currently no information available regarding the value of the gig economy's global market size. However, I did learn that the global gig economy could reach $2.7 trillion annually by 2025.
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